10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)
x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended December 31, 2014

 OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to __________

Commission file number: 000-55394

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

(Exact name of registrant as specified in its charter) 

Maryland	80-0943668
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
405 Park Ave., 14th Floor New York, NY	10022
(Address of principal executive offices)	(Zip Code)
(212) 415-6500
(Registrant's telephone number, including area code)
Securities registered pursuant to section 12(b) of the Act: None
Securities registered pursuant to section 12(g) of the Act: Common stock, $0.01 par value per share (Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant submitted electronically and posted on its corporate Web Site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes ¨ No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨		Accelerated filer ¨
Non-accelerated filer ¨	(Do not check if a smaller reporting company)	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No

There is no established public market for the registrant's shares of common stock. The registrant is currently conducting the ongoing initial public offering of its shares of common stock pursuant to its Registration Statement on Form S-11 (File No. 333-190698), which shares are being sold at $25.00 per share, with discounts available for certain categories of purchasers. The total value of the registrant's common stock held by non-affiliates of the registrant as of June 30, 2014, the last business day of the registrant's most recently completed second fiscal quarter, was $21.1 million based on a per share value of $25.00 (or $23.75 for shares issued under the distribution reinvestment plan).

The number of outstanding shares of the registrant's common stock on March 15, 2015 was 15,095,634 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's definitive proxy statement to be delivered to stockholders in connection with the registrant's 2015 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K. The registrant intends to file its proxy statement within 120 days after its fiscal year end.

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

FORM 10-K

Year Ended December 31, 2014

PART I		Page
Item 1.	Business	1
Item 1A.	Risk Factors	5
Item 1B.	Unresolved Staff Comments	41
Item 2.	Properties	41
Item 3.	Legal Proceedings	42
Item 4.	Mine Safety Disclosure	42
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	43
Item 6.	Selected Financial Data	46
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	48
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	60
Item 8.	Financial Statements and Supplementary Data	60
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	60
Item 9A.	Controls and Procedures	61
Item 9B.	Other Information	61
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	62
Item 11.	Executive Compensation	62
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	62
Item 13.	Certain Relationships and Related Transactions, and Director Independence	62
Item 14.	Principal Accounting Fees and Services	62
PART IV
Item 15.	Exhibits and Financial Statement Schedules	63
Signatures		67

This Annual Report on Form 10-K may contain registered trademarks, including Hampton Inn®, Hampton Hotels®, Homewood Suites®, Embassy Suites® and Hilton Garden Inn®, which are the exclusive property of Hilton Worldwide, Inc.® and its subsidiaries and affiliates, Courtyard® by Marriott, Fairfield Inn®, Fairfield Inn and Suites®, TownePlace Suites®, SpringHill Suites®, and Residence Inn® which are the exclusive property of Marriott International, Inc.® or one of its affiliates, Westin® which is the exclusive property of Starwood Hotels and Resorts Worldwide® or one of its affiliates, Hyatt Place®, which is the exclusive property of Hyatt Hotels Corporation® or one of its affiliates, and Holiday Inn® and Holiday Inn Express®, which are the exclusive property of Intercontinental Hotels Group® or one of its affiliates. For convenience, the applicable trademark or service mark symbol has been omitted but will be deemed to be included wherever the above referenced terms are used.

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Forward-Looking Statements

Certain statements included in this Annual Report on Form 10-K are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of American Realty Capital Hospitality Trust, Inc. (the "Company" "we" "our" or "us") and members of our management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as "may," "will," "seeks," "anticipates," "believes," "estimates," "expects," "plans," "intends," "should" or similar expressions. Actual results may differ materially from those contemplated by such forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law.

The following are some of the risks and uncertainties, although not all risks and uncertainties, that could cause our actual results to differ materially from those presented in our forward-looking statements:

• We have a limited operating history. This inexperience makes our future performance difficult to predict.

• All of our executive officers are also officers, managers and/or holders of a direct or indirect controlling interest in American Realty Capital Hospitality Advisors, LLC (the "Advisor"), Realty Capital Securities, LLC (the "Dealer Manager"), or other entities affiliated with the parent of our Sponsor, AR Capital, LLC ("American Realty Capital"). As a result, our executive officers, our Advisor and its affiliates face conflicts of interest, including significant conflicts created by our Advisor's compensation arrangements with us. These conflicts could result in unanticipated actions.

• Because investment opportunities that are suitable for us may also be suitable for other American Realty Capital advised investment programs, our Advisor and its affiliates face conflicts of interest relating to the purchase of properties and other investments and such conflicts may not be resolved in our favor, meaning that we could invest in less attractive assets, which could reduce the investment return to our stockholders.

• We intend to use substantially all available proceeds of our initial public offering of common stock (our "IPO" or our "Offering") following the completion on February 27, 2015 of our acquisition of a portfolio of 116 hotel assets (the "Grace Portfolio") to reduce our borrowings to our intended limit, which may limit our ability to pay distributions or acquire additional properties for some time. The continued use of substantially all offering proceeds to repay debt will reduce the available cash flow to fund working capital, acquisitions, capital expenditures and other general corporate purposes, which could have a material adverse impact on our business and reduce cash available for distributions to holders of our common stock.

• We focus on acquiring a diversified portfolio of hospitality assets located in the United States and are subject to risks inherent in concentrating investments in the hospitality industry.

• We may purchase real estate assets located in Canada and Mexico, which may subject us to additional risks.

• No public market currently exists, or may ever exist, for shares of our common stock and our shares are, and may continue to be, illiquid.

• Increases in interest rates could increase the amount of our debt payments and limit our ability to pay distributions to our stockholders.

• We may be unable to obtain the financing needed to complete acquisitions.

• We incurred substantial additional indebtedness to consummate the Grace Acquisition, which may have a material adverse effect on our financial condition and results of operations.

• We may not generate cash flows sufficient to pay our distributions to stockholders, and, as such, we may be forced to borrow at higher rates or depend on our Advisor and its affiliates to waive reimbursements of certain expenses and fees to fund our operations.

• We are obligated to pay fees to our Advisor and its affiliates, which may be substantial.

• We may be unable to maintain cash distributions or increase distributions over time.

• Our organizational documents permit us to pay distributions from unlimited amounts of any source. Since our inception, all of our distributions have been paid from offering proceeds. We may continue in the future to pay distributions from sources other than from our cash flows from operations, including the net proceeds from the Offering. There are no established limits on the amounts of net proceeds and borrowings that we may use to fund such distribution payments.

• Distributions paid will reduce the amount of capital we ultimately invest in properties and other permitted investments and may negatively impact the value of our stockholders' investment.

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• We intend to pay distributions from cash flows from operations following the completion of the Grace Acquisition, but our ability to do so depends on our ability to realize the expected benefits of the acquisition of the Grace Portfolio from which a substantial amount of our future cash flows from operations are expected to be generated. Failure to realize the expected benefits of the acquisition of the Grace Portfolio, within the anticipated timeframe or at all, or the incurrence of unexpected costs, could have a material adverse effect on our financial condition and results of operations and our ability to pay distributions from cash flow from operations.

• We are subject to risks associated with any dislocations or liquidity disruptions that may exist or occur in the credit markets of the United States from time to time.

• Our failure to qualify or to continue to qualify to be treated as a real estate investment trust for U.S. federal income tax purposes ("REIT") which would result in higher taxes, may adversely affect operations and would reduce our NAV and cash available for distributions.

All forward-looking statements should also be read in light of the risks identified in Item 1A of this Annual Report on Form 10-K.

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PART I

Item 1. Business.

We were incorporated on July 25, 2013, as a Maryland corporation and intend to elect and qualify to be taxed as a REIT beginning with our taxable year ended December 31, 2014. On January 7, 2014, we commenced our IPO on a "reasonable best efforts" basis of up to 80,000,000 shares of common stock, $0.01 par value per share, at a price of $25.00 per share, subject to certain volume and other discounts, pursuant to a registration statement on Form S-11 (File No. 333-190698), as amended (the "Registration Statement"), filed with the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended (the "Securities Act"). The Registration Statement also covers up to 21,052,631 shares of common stock available pursuant to a distribution reinvestment plan (the "DRIP") under which our common stockholders may elect to have their distributions reinvested in additional shares of our common stock at a price initially equal to $23.75 per share, which is 95% of the offering price in our IPO.

We were formed to primarily acquire a diversified portfolio of income producing real estate properties, focusing predominantly on lodging properties in the midscale limited service, extended stay, select-service, upscale select-service, and upper-upscale full-service segments within the hospitality sector. We will have no limitation as to the brand of franchise or license with which our hotels will be associated. All such properties may be acquired and operated by us alone or jointly with another party. We may also originate or acquire first mortgage loans secured by real estate.

Substantially all of our business is conducted through American Realty Capital Hospitality Operating Partnership, L.P. (our "OP" or "Operating Partnership"). The Company is the sole general partner and holds substantially all of the units of limited partner interests in our OP. We have no direct employees. We have retained our Advisor to manage our affairs on a day-to-day basis. Our Advisor is wholly owned by American Realty Capital Hospitality Special Limited Partner, LLC (the "Special Limited Partner"), a Delaware limited liability company, which is the special limited partner of our OP. We have retained American Realty Capital Hospitality Properties, LLC (the "Property Manager") to serve as our property manager and the Property Manager has retained Crestline Hotels & Resorts, LLC (the "Sub-Property Manager"), an entity under common control with the parent of American Realty Capital IX, LLC (the "Sponsor"), to provide services, including locating investments, negotiating financing and operating certain hotel assets in our portfolio. The Dealer Manager, an entity under common control with the parent of the Sponsor, serves as the dealer manager of the Offering. The Advisor, Special Limited Partner, Property Manager, Sub-Property Manager and Dealer Manager are related parties and receive fees, distributions and other compensation for services related to the Offering and the investment and management of our assets.

Investment Objectives

Our primary business objective is to maximize stockholder value by maintaining long-term growth in cash distributions and generating attractive risk-adjusted returns to our stockholders. To achieve this, we focus on maximizing the internal growth of our portfolio by acquiring properties that we believe have strong cash flow potential and dynamics. We seek to create a portfolio with the potential to generate attractive risk-adjusted returns across varying economic cycles, including by taking advantage of opportunities to acquire hotel properties at what we believe are attractive prices in the current economic environment.

Our core strategy for achieving these objectives is to acquire, own, manage and seek to enhance the value of lodging properties. We will adjust our investment focus from time to time based upon market conditions and our Advisor’s and Sub-Property Manager’s views on relative value as market conditions change.

We believe that the following market factors and attributes of our investment model are particularly important to our ability to meet our investment objective:

• Lodging Properties. We have acquired and intend to continue to acquire primarily lodging properties in the midscale limited service, extended stay, select-service, upscale select-service and upper-upscale full-service segments within the hospitality sector.

• Our Investment Model in the Current Economic Environment. We believe the current macroeconomic environment, improving real estate fundamentals, and current market conditions will continue to create attractive opportunities to acquire hotel properties at prices that represent discounts to replacement cost and provide potential for significant long-term value appreciation. Given the conditions of the current economic environment and the experience and expertise of our Advisor and our Sub-Property Manager, we expect to be well-positioned to capitalize on these opportunities to create an attractive investment portfolio and maximize stockholder returns.

• Our Lodging-Centric and Opportunistic Investment Strategy. Lodging properties can provide investors with an attractive blend of current cash flow and opportunity for capital appreciation. Growth in United States hotel revenue per available room ("RevPAR"), has historically been closely correlated with growth in United States gross domestic product. Lodging properties do not have a fixed lease structure, unlike other property types, and therefore rental rates

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on lodging properties can be determined on virtually a daily basis. Therefore, as the United States economy continues to strengthen, we anticipate RevPAR growth, along with the related growth in property operating income and valuations, to culminate in an overall improvement of lodging industry fundamentals over the course of our investment period.

• The Lodging Sector. The operationally intense nature of lodging assets presents opportunities to employ a variety of strategies to enhance value, including brand and management changes, revenue and expense management, strategic capital expenditures and repositioning. Our asset management approach is designed to capitalize on opportunities during periods of strong growth and also to exploit efficiencies and operating leverage during periods of slower growth.

• Discount to Replacement Cost. We intend to purchase properties valued at a discount to replacement cost using current market rates.

• Targeted Leverage. We will finance our portfolio conservatively at a target leverage level of approximately 50% loan-to-value, which ratio will be determined after the close of our Offering and once we have invested substantially all the proceeds thereof.

• Monthly Distributions. We intend to pay distributions monthly, which we intend to cover by FFO once we have invested substantially all the proceeds of our Offering, as described under Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Funds from Operations and Modified Funds from Operations.”

• Exit Strategy. We expect to sell our assets, sell or merge our company, or list our company within three to six years after the end of our Offering. Our primary offering is expected to continue for two years from the effectiveness of the offering, subject to our right to extend the offering for an additional one-year period. Although we may extend our Offering via a follow-on offering, at this time, we do not expect the offering to continue for more than three years from effectiveness. Should we pursue a follow-on offering, our primary offering will be deemed to terminate upon the close of such follow-on offering. Our board of directors, in consultation with management, may determine that it is in our best interests to begin the process of engaging advisors (including an entity under common control with American Realty Capital) to consider such exit alternatives at such time during our Offering stage as it can reasonably determine that all of the securities being offered in our Offering will be sold within a reasonable period (i.e. three to six months).

Acquisition and Investment Policies

Primary Investment Focus

Our primary investment focus is to create value through prudent capital investments and aggressive asset management. We believe it is currently a unique time to accumulate a high quality portfolio in major and secondary markets at historically attractive prices with discounts to replacement cost in a low interest rate environment. We seek properties that meet the following investment criteria:

• Strong location:

◦ hotel properties located in markets with higher barriers to entry, including those markets in the top 50 metropolitan areas, with a secondary focus on the next 100 markets in close proximity to major market demand generating locations and landmarks;

◦ hotels located in close proximity to multiple demand generating landmarks, including businesses and corporate headquarters, retail centers, airports, medical facilities, tourist attractions and convention centers, with a diverse source of potential guests, including corporate, government and leisure travelers; and

◦ hotels located in markets exhibiting barriers to entry due to strong franchise areas of protection or other factors.

• Market leaders: Hotel properties that are proven leaders in market share, setting the rates in the market and providing superior meeting space, services or amenities.

• Good condition: Hotel properties that are well-maintained, as determined based on our review of third-party property condition reports and other data obtained during our due diligence process.

Investing in Real Property

We plan to acquire and own hotels located throughout the United States. We may also acquire hotels located in

Canada and Mexico. We intend to acquire a diversified portfolio of lodging properties in the midscale limited service, extended stay, select-service, upscale select-service, and upper-upscale full-service segments within the hospitality sector. Full-service hotels generally provide a full complement of guest amenities including restaurants, concierge and room service, porter service or valet parking. Select-service and limited-service hotels typically do not include these amenities. Extended-stay hotels

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generally offer high-quality, residential style lodging with an extensive package of services and amenities for extended-stay business and leisure travelers. We have no limitation as to the brand of franchise or license with which our properties are associated.

Acquisitions

On March 21, 2014, we closed on the acquisition of interests in six hotels through fee simple, leasehold and joint venture interests (the "Barceló Portfolio") for an aggregate purchase price of $110.1 million, exclusive of closing costs. See Item 2 "Properties" for further details and Item 15 "Exhibits and Financial Statement Schedules" for the consolidated/combined financial statements of the hotels in the Barceló Portfolio.

On February 27, 2015, we acquired the Grace Portfolio. The aggregate purchase price of the Grace Portfolio was approximately $1.8 billion, exclusive of closing costs. We funded approximately $230.1 million of the purchase price with cash-on-hand raised in our initial public offering, approximately $903.9 million through the assumption of existing indebtedness collateralized by 96 of the hotels in the Grace Portfolio and approximately $227.0 million by incurring new indebtedness collateralized by the remaining 20 hotels in the Grace Portfolio and one of the hotels in the Barceló Portfolio. The remaining $447.1 million of the purchase price was satisfied by the issuance to affiliates of the sellers of the Grace Portfolio of preferred equity interests in two of our indirect subsidiaries that are indirect owners of the 116 hotels comprising the Grace Portfolio (the "Grace Preferred Equity Interests").

Other Real Estate and Real Estate-Related Loans and Securities

Although not our primary focus, we may, from time to time, make investments in other real estate properties and real estate-related loans and securities. We do not expect these types of assets to exceed 10% of our assets after the proceeds of our Offering have been fully invested, nor represent a substantial portion of our assets at any one time. If we do make such investments, we will primarily focus on investments in first mortgages secured by hotel properties. The other real estate-related debt investments in which we may invest include: mortgages (other than first mortgages secured by hotel properties); mezzanine bridge and other loans; debt and derivative securities related to real estate assets, including mortgage-backed securities; collateralized debt obligations; debt securities issued by real estate companies; and credit default swaps. Our criteria for investing in loans are substantially the same as those involved in our investment in properties; however, we will also evaluate such investments based on the current income opportunities presented.

Investments in Equity Securities

We may make equity investments in other REITs and other real estate companies that operate assets meeting our investment objectives. We may purchase the common or preferred stock of these entities or options to acquire their stock. We will target a public company that owns real estate or real estate-related assets when we believe its stock is trading at a discount to that company’s net asset value. We may eventually seek to acquire or gain a controlling interest in the companies that we target. We do not expect our non-controlling equity investments in other public companies to exceed 5% of the proceeds of our Offering, assuming we sell the maximum offering amount, or to represent a substantial portion of our assets at any one time. In addition, we do not expect our non-controlling equity investments in other public companies combined with our investments in real estate properties outside of our target hospitality investments and other real estate-related investments to exceed 10% of our portfolio.

Acquisition Structure

We intend to acquire real estate and real-estate related assets directly, for example, by acquiring fee interests in real property, or by purchasing interests, including controlling interests, in REITs or other “real estate operating companies,” such as real estate management companies and real estate development companies, that own real property. We also may acquire real estate assets through investments in joint venture entities, including joint venture entities in which we may not own a controlling interest. We anticipate that our assets generally will be held in wholly and majority-owned subsidiaries of the Company, each formed to hold a particular asset. In order for the income from our hotel investments to constitute “rents from real property” for purposes of the gross income tests required for REIT qualification, we must lease each of our hotels to a wholly-owned subsidiary of our taxable REIT subsidiary ("TRS"), or to an unrelated third party.

International Investments

We plan to acquire and own hotels located throughout the United States. We may also acquire hotels located in Canada and Mexico.

Joint Ventures

We may enter into joint ventures, partnerships and other co-ownership arrangements for the purpose of making investments. Some of the potential reasons to enter into a joint venture would be to acquire assets we could not otherwise acquire, to reduce our capital commitment to a particular asset or to benefit from certain expertise that a partner might have.

Financing Strategies and Policies

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We expect that following the completion of our Offering and the investment of substantially all the proceeds thereof our debt financing will be approximately 50% of the total value of our real estate investments and our other assets. Under our charter, the maximum amount of our total indebtedness shall not exceed 300% of our total “net assets” (as defined in our charter) as of the date of any borrowing, which is generally expected to be approximately 75% of the cost of our investments; however, we may exceed that limit if such excess is approved by a majority of our independent directors and disclosed to stockholders in our next quarterly report following that borrowing, along with the justification for exceeding such limit. This charter limitation, however, does not apply to individual real estate assets or investments. In all events, we expect that our secured and unsecured borrowings will be reasonable in relation to the net value of our assets and will be reviewed by our board of directors at least quarterly.

Prior to our entry into an agreement to acquire the Grace Portfolio in May 2014, a majority of our independent directors waived the total portfolio leverage requirement of our charter with respect to the acquisition of the Grace Portfolio should such total portfolio leverage exceed 300% of our total "net assets" upon the acquisition of the Grace Portfolio. Following the acquisition of the Grace Portfolio in February 2015, our total portfolio leverage (which includes the Grace Preferred Equity Interests) significantly exceeded this 300% limit, and we expect it will continue to do so for some time. Accordingly, we intend to use substantially all available offering proceeds following the acquisition of the Grace Portfolio to reduce our borrowings to our intended limit, which is below the 300% maximum limit. Following the acquisition of the Grace Portfolio in February 2015, the principal amount of our outstanding secured financing, which excludes the Grace Preferred Equity Interests, is approximately 60% of the total value of our real estate investments and our other assets.

The form of our indebtedness may be long term or short term, secured or unsecured, fixed or floating rate or in the form of a revolving credit facility, repurchase agreements or warehouse lines of credit. Our Advisor will seek to obtain financing on our behalf on the most favorable terms available.

Except with respect to the borrowing limits contained in our charter, we may reevaluate and change our debt policy in the future without a stockholder vote. Factors that we would consider when reevaluating or changing our debt policy include: then-current economic conditions, the relative cost and availability of debt and equity capital, any investment opportunities, the ability of our properties and other investments to generate sufficient cash flow to cover debt service requirements and other similar factors. Further, we may increase or decrease our ratio of debt to book value in connection with any change of our borrowing policies.

We do not borrow from our Advisor or its affiliates to purchase properties or make other investments unless a majority of our directors, including a majority of our independent directors, not otherwise interested in the transaction approves the transaction as being fair, competitive and commercially reasonable and no less favorable to us than comparable loans between unaffiliated parties.

Tax Status

We intend to elect and qualify to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"), commencing with our taxable year ended December 31, 2014. We intend to operate in such a manner as to continue to qualify for taxation as a REIT under the Code. However, no assurance can be given that we will operate in a manner so as to qualify or remain qualified as a REIT. If we qualify for taxation as a REIT, we generally, with the exception of our taxable REIT subsidiaries, will not be subject to federal corporate income tax to the extent that we distribute all of our REIT taxable income (which does not equal net income as calculated in accordance with accounting principles generally accepted in the United States of America ("GAAP")) to our stockholders and comply with various other requirements applicable to REITs. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income and property, and federal income and excise taxes on our undistributed income and taxable REIT subsidiaries.

Competition

The hotel industry is highly competitive. This competition could reduce occupancy levels and operating income at our properties, which would adversely affect our operations. We face competition from many sources. We face competition from other hotels both in the immediate vicinity and the geographic market where our hotels are located. Over-building of hotels in the markets in which we operate may increase the number of rooms available and may decrease occupancy and room rates. In addition, increases in operating costs due to inflation may not be offset by increased room rates. We also face competition from nationally recognized hotel brands with which we will not be associated, as well as from other hotels associated with nationally recognized hotel brands with which we are associated.

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In addition, we compete with other entities engaged in real estate investment activities to locate suitable properties to acquire and purchasers to buy our properties. These competitors include other REITs, specialty finance companies, savings and loan associations, banks, mortgage bankers, insurance companies, mutual funds, institutional investors, investment banking firms, lenders, governmental bodies and other entities. We also compete with other REITs with asset acquisition objectives similar to ours and others may be organized in the future. Some of these competitors, including larger REITs, have substantially greater marketing and financial resources than we have and generally may be able to accept more risk than we can prudently manage. In addition, these same entities seek financing through similar channels. Therefore, we compete with them for institutional investors in a market where funds for real estate investment may decrease.

Competition from these and other third-party real estate investors may limit the number of suitable investment opportunities available. It also may result in higher prices, lower yields and a narrower spread of yields over our borrowing costs, making it more difficult for us to acquire new investments on attractive terms.

Regulations

Our investments will be subject to various federal, state and local laws, ordinances and regulations, including, among other things, zoning regulations, land use controls, environmental controls relating to air and water quality and noise pollution. We will obtain all permits and approvals that we believe are necessary under current law to operate our investments.

Environmental

As an owner of real estate, we are subject to various environmental laws of federal, state and local governments. Management does not believe that compliance with existing laws has had, or will have, a material adverse effect on our financial condition or results of operations in the future. However, we cannot predict the impact of unforeseen environmental contingencies or new or changed laws or regulations on properties that may be acquired directly or indirectly in the future. In most circumstances, we have hired, and intend to hire, third parties to conduct Phase I environmental reviews of any property that we intend to purchase.

Employees

As of December 31, 2014, we had no direct employees. The employees of the Advisor and other affiliates perform a full range of real estate services for us, including acquisitions, property management, accounting, legal, asset management, wholesale brokerage, transfer agent and investor relations services. We are dependent on these affiliates for services that are essential to us, including the sale of shares of our common stock, asset acquisition decisions, property management and other general administrative responsibilities. In the event that any of these companies were unable to provide these services to us, we would be required to provide such services ourselves or obtain such services from other sources.

Financial Information About Industry Segments

We have determined that we have one reportable segment, with activities related to investing in real estate. Our investments in real estate generate room revenue and other income through the operation of the properties, which comprise 100% of the total consolidated/combined revenues. Management evaluates the operating performance of our investments in real estate on an individual property level, none of which represent a reportable segment.

Available Information

We electronically file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K (including all amendments to those reports) and proxy statements with the SEC. We also filed with the SEC our Registration Statement in connection with our current offering. You may read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, D.C. 20549, or you may obtain information by calling the SEC at 1-800-SEC-0330. The SEC maintains a website at http://www.sec.gov that contains reports, proxy statements and information statements, and other information, which you may obtain free of charge. In addition, copies of our filings with the SEC may be obtained from the website maintained for us and our affiliates at www.archospitalityreit.com. Access to these filings is free of charge. We are not incorporating our website or any information from the website into this Form 10-K.

Item 1A. Risk Factors.

Risks Related to an Investment in American Realty Capital Hospitality Trust, Inc.

We have a limited prior operating history and rely on our Advisor to conduct our operations; our Advisor has limited operating history and limited experience operating a public company.

We have a limited operating history and our stockholders should not rely upon the past performance of other real estate investment programs sponsored by American Realty Capital to predict our future results. We were incorporated on July 25, 2013.

Our Advisor had no operations prior to the commencement of our Offering. Our executive officers have limited experience managing public companies. For these reasons, our stockholders should be especially cautious when drawing conclusions about

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our future performance and they should not assume that it will be similar to the prior performance of other programs sponsored by American Realty Capital. Our limited operating history, our Advisor’s limited prior experience operating a public company and our Sponsor’s limited experience in connection with investments of the type being made by us significantly increase the risk and uncertainty our stockholders face in making an investment in our shares.

Our stockholders should consider our prospects in light of the risks, uncertainties and difficulties frequently encountered by companies that are, like us, in their early stage of development. To be successful in this market, we must, among other things:

• identify and acquire investments that further our investment strategies;

• increase awareness of the American Realty Capital Hospitality Trust, Inc. name within the investment products market;

• expand and maintain our network of licensed securities brokers and other agents;

• attract, integrate, motivate and retain qualified personnel to manage our day-to-day operations;

• respond to competition for our targeted real estate properties and other investments, as well as for potential investors; and

• continue to build and expand our operations structure to support our business.

We cannot guarantee that we will succeed in achieving these goals, and our failure to do so could cause our stockholders to lose all or a portion of their investment.

We have a history of operating losses and there can be no assurance that we will achieve profitability.

Since inception in July 2013 through December 31, 2014, we have incurred net losses (calculated in accordance with GAAP) equal to $14.8 million. The extent of our future operating losses and the timing of the profitability are highly uncertain, and we may never achieve or sustain profitability.

Our stockholders may be more likely to sustain a loss on their investment because our Sponsor does not have as strong an economic incentive to avoid losses as does a sponsor who has made significant equity investments in its company.

The Special Limited Partner, which is wholly owned by our Sponsor and wholly owns our Advisor, has invested only $200,000 in us through the purchase of 8,888 shares of our common stock at $22.50 per share, reflecting the fact that selling commissions and dealer manager fees were not paid on the sale. The Special Limited Partner may not sell this initial investment while our Sponsor remains our Sponsor, but it may transfer such shares to affiliates. Therefore, if we are successful in raising enough proceeds to be able to reimburse our Advisor for our significant organization and offering expenses, our Sponsor will have little exposure to loss in the value of our shares. Without this exposure, our investors may be at a greater risk of loss because our Sponsor may have less to lose from a decrease in the value of our shares as does a sponsor that makes more significant equity investments in its company.

There is no public trading market for our shares and there may never be one. Therefore, it will be difficult for our stockholders to sell their shares.

Our charter does not require our directors to seek stockholder approval to liquidate our assets by a specified date, nor does our charter require our directors to list our shares for trading on a national securities exchange by a specified date. Our shares of common stock are not listed on a national securities exchange, there is no public market for our shares and may never be one. Until our shares are listed, if ever, stockholders may not sell their shares unless the buyer meets the applicable suitability and minimum purchase standards. In addition, our charter prohibits the ownership of more than 9.8% in value of the aggregate of outstanding shares of capital stock or more than 9.8% in value or number of shares, whichever is more restrictive, of any class or series of our stock, unless exempted (prospectively or retroactively) by our board of directors, which may inhibit large investors from purchasing our stockholders' shares. In its sole discretion, our board of directors could amend, suspend or terminate our share repurchase program (our "SRP") upon 30 days’ notice. Further, our SRP includes numerous restrictions that would limit a stockholder’s ability to sell his or her shares. Therefore, it is difficult for our stockholders to sell their shares promptly or at all. If a stockholder is able to sell his or her shares, it would likely be at a substantial discount to the public offering price. It is also likely that our shares would not be accepted as the primary collateral for a loan. Because of the illiquid nature of our shares, investors should purchase our shares only as a long-term investment and be prepared to hold them for an indefinite period of time.

We may change our targeted investments without stockholder consent.

We have invested in a portfolio of lodging properties in the midscale limited service, extended stay, select-service, upscale select-service and upper-upscale full-service segments within the hospitality sector. We intend to allocate no more than 10% of our portfolio to other real estate properties and real estate-related loans and securities, such as mortgage, mezzanine, bridge and other loans; debt and derivative securities related to real estate assets, including mortgage-backed securities; collateralized debt

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obligations; debt securities issued by real estate companies; credit default swaps; and the equity securities of other REITs and real estate companies. We do not expect our non-controlling equity investments in other public companies to exceed 5% of the proceeds of our Offering, assuming we sell the maximum offering amount. We may make adjustments to our portfolio based on real estate market conditions and investment opportunities, and we may change our targeted investments and investment guidelines at any time without the consent of our stockholders, which could result in our making investments that are different from, and possibly riskier than, our current investments. A change in our investments or investment guidelines may increase our exposure to interest rate risk, default risk and real estate market fluctuations, all of which could adversely affect the value of our common stock and our ability to make distributions to our stockholders.

If we internalize our management functions, we may be unable to obtain key personnel, and our ability to achieve our investment objectives could be delayed or hindered, which could adversely affect our ability to pay distributions to our stockholders and the value of their investment.

We may engage in an internalization transaction and become self-managed in the future. If we internalize our management functions, certain key employees may not become our employees, but may instead remain employees of our Advisor or its affiliates. An inability to manage an internalization transaction effectively could thus result in our incurring excess costs and suffering deficiencies in our disclosure controls and procedures or our internal control over financial reporting. Such deficiencies could cause us to incur additional costs and our management's attention could be diverted from most effectively managing our investments, which could result in us being sued and incurring litigation-associated costs in connection with the internalization transaction.

Because we are dependent upon our Advisor, our Property Manager, our Sub-Property Manager and their affiliates to conduct our operations, and we have engaged third-party sub-property managers to manage certain properties, any adverse changes in the financial health of our Advisor, our Property Manager, our Sub-Property Manager or third-party sub-property managers or their affiliates or our relationship with them could hinder our operating performance and the return on our stockholders’ investments.

We are dependent on our Advisor, our Property Manager and our Sub-Property Manager, which are responsible for our day-to-day operations and are primarily responsible for the selection of investments to be recommended to our board of directors. We are also dependent on our Property Manager, our Sub-Property Manager and third-party sub-property managers to manage certain of our real estate assets. Our Advisor and our Property Manager had no prior operating history before they were formed in connection with the Offering. Our Advisor depends upon the fees and other compensation that it receives from us in connection with the purchase, management and sale of assets to conduct its operations.

Any adverse changes in the financial condition of such entities or certain of their affiliates or in our relationship with them could hinder its or their ability to successfully manage our operations and our portfolio of investments.

The loss of or the inability to obtain key real estate professionals at our Advisor, our Sub-Property Manager or our Dealer Manager could delay or hinder implementation of our investment strategies, which could limit our ability to make distributions and decrease the value of our stockholders' investment.

Our success depends to a significant degree upon the contributions of certain executive officers, including Bruce D. Wardinski, Jonathan P. Mehlman and Edward T. Hoganson at our Advisor and Edward M. Weil, Jr., William E. Dwyer III and Louisa H. Quarto at our Dealer Manager, as well as James A. Carroll and Pierre M. Donahue at our Sub-Property Manager. These individuals may not remain associated with us. If any of these persons were to cease their association with us, our operating results could suffer. We do not intend to maintain key person life insurance on any person. Our future success depends, in large part, upon our Advisor and its affiliates' ability to hire and retain highly skilled managerial, operational and marketing professionals. Competition for such professionals is intense, and our Advisor and its affiliates may be unsuccessful in attracting and retaining such skilled individuals. Maintaining relationships with firms that have special expertise in certain services or detailed knowledge regarding real properties in certain geographic regions will be important for us to effectively compete with other investors for properties in such regions. We may be unsuccessful in establishing and retaining such relationships. If we lose or are unable to obtain the services of highly skilled professionals or do not establish or maintain appropriate strategic relationships, our ability to implement our investment strategies could be delayed or hindered, and the value of our stockholders’ investments may decline.

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Disclosures made by American Realty Capital Properties, Inc. an entity previously sponsored by the parent of our Sponsor may adversely affect our ability to raise substantial funds.

On October 29, 2014, American Realty Capital Properties, Inc. (“ARCP”) announced that its audit committee had concluded that the previously issued financial statements and other financial information contained in certain public filings should no longer be relied upon. This conclusion was based on the preliminary findings of an investigation conducted by ARCP’s audit committee which concluded that certain accounting errors were made by ARCP personnel that were not corrected after being discovered, resulting in an overstatement of AFFO and an understatement of ARCP’s net loss for the three and six months ended June 30, 2014. ARCP also announced the resignation of its chief accounting officer and its chief financial officer. ARCP’s former chief financial officer also was chief financial officer, treasurer and secretary of our company, our Advisor and our Property Manager during the period from August 2013 to September 2013. This individual also is one of the non-controlling owners of the parent of our Sponsor, but does not have a role in managing our business or our Sponsor’s business. In December 2014, ARCP announced the resignation of its executive chairman, who was also the chairman of our board of directors until his resignation on December 29, 2014. This individual also is currently a member of the board of managers of our Sub-Property Manager and one of the controlling members of the parent of our Sponsor.

On March 2, 2015, ARCP announced the completion of its audit committee’s investigation and filed amendments to its Form 10-K for the year ended December 31, 2013 and its Form 10-Q for the quarters ended March 31, 2014 and June 30, 2014. According to these filings, these amendments corrected errors in ARCP’s financial statements and in its calculation of AFFO that resulted in overstatements of AFFO for the years ended December 31, 2011, 2012 and 2013 and the quarters ended March 31, 2013 and 2014 and June 30, 2014 and described certain results of its investigations, including matters relating to payments to, and transactions with, affiliates of the parent of our Sponsor and certain equity awards to certain officers and directors. In addition, ARCP disclosed that the audit committee investigation had found material weaknesses in ARCP’s internal control over financial reporting and its disclosure controls and procedures. ARCP also disclosed that the SEC has commenced a formal investigation, that the United States Attorney’s Office for the Southern District of New York contacted counsel for both ARCP’s audit committee and ARCP with respect to the matter and that the Secretary of the Commonwealth of Massachusetts has issued a subpoena for various documents. On March 30, 2015, ARCP filed its Form 10-K for the year ended December 31, 2014.  ARCP’s filings with the SEC are available at the internet site maintained by the SEC, www.sec.gov.

Since the initial announcement in October, a number of participating broker-dealers temporarily suspended their participation in the distribution of our Offering. Although certain of these broker-dealers have reinstated their participation, we cannot predict the length of time the remaining temporary suspensions will continue or whether all participating broker-dealers will reinstate their participation in the distribution of our Offering. As a result, our ability to raise substantial funds may be adversely impacted.

Since our inception, all of our distributions have been paid from offering proceeds. Distributions paid from sources other than our cash flows from operations, particularly from proceeds of our IPO, will result in us having fewer funds available for the acquisition of properties and other real estate-related investments and may dilute our stockholders' interests in us, which may adversely affect our ability to fund future distributions with cash flows from operations and may adversely affect our stockholders' overall return.

Our cash flows used in operations were $9.7 million for the year ended December 31, 2014, and we have had negative cash flows from operations since our inception, in July 2013. During the year ended December 31, 2014, we paid distributions of $3.5 million, all of which was funded from offering proceeds, including offering proceeds which were reinvested in common stock issued pursuant to the DRIP. Since our inception, all of our distributions have been paid from offering proceeds.

We may pay distributions from unlimited amounts of any source, including borrowing funds, using proceeds from our Offering, issuing additional securities or selling assets. We have not established any limit on the amount of proceeds from our Offering that may be used to fund distributions, except in accordance with our organizational documents and Maryland law.

We expect that future distributions will be paid from our cash flow from operations following the acquisition of the Grace Portfolio, but there can be no assurance we will be able to generate sufficient cash flow from operations to do so. We may continue in the future to pay distributions from sources other than from our cash flows from operations, including the net proceeds from this offering.

Using proceeds from our Offering to pay distributions, especially if the distributions are not reinvested through our DRIP, reduces cash available for investment in assets or other purposes and will likely reduce our per share stockholder equity.

We may continue not to generate sufficient cash flows from operations to fully pay distributions, and our ability to use cash flows from operations to pay distributions in the future may also be adversely impacted by our substantial indebtedness. If we have not generated sufficient cash flows from our operations and other sources, such as from borrowings, the sale of additional securities, advances from our Advisor, and our Advisor’s deferral, suspension or waiver of its fees and expense reimbursements, to fund distributions, we may continue to use the proceeds from our Offering, although we currently intend to use substantially

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all of the proceeds from our Offering to reduce our borrowings, which could limit our ability to pay distribution from proceeds from our Offering for some time. Moreover, our board of directors may change our distribution policy, in its sole discretion, at any time. Distributions made from offering proceeds are a return of capital to stockholders, from which we will have already paid offering expenses in connection with our IPO. We have not established any limit on the amount of proceeds from our Offering that may be used to fund distributions, except that, in accordance with our organizational documents and Maryland law, we may not make distributions that would: (1) cause us to be unable to pay our debts as they become due in the usual course of business; (2) cause our total assets to be less than the sum of our total liabilities plus senior liquidation preferences, if any; or (3) jeopardize our ability to qualify as a REIT.

Funding distributions from borrowings could restrict the amount we can borrow for investments, which may, among other things, affect our earnings. Funding distributions with the sale of assets or the proceeds of our Offering may affect our ability to generate additional operating cash flows. Funding distributions from the sale of additional securities could dilute our stockholders' interest in us if we sell shares of our common stock or securities that are convertible or exercisable into shares of our common stock to third-party investors. Payment of distributions from the mentioned sources could restrict our ability to generate sufficient cash flows from operations, affect our earnings or affect the distributions payable to our stockholders upon a liquidity event, any or all of which may have an adverse effect on our stockholders' investment in our common stock.

We may be unable to maintain current cash distributions or increase distributions over time.

We intend to pay distributions from cash flows from operations following the completion of the Grace Acquisition, but our ability to do so depends on our ability to realize the expected benefits of the acquisition of the Grace Portfolio from which a substantial amount of our future cash flows from operations are expected to be generated. Failure to realize the expected benefits of the acquisition of the Grace Portfolio, within the anticipated timeframe or at all, or the incurrence of unexpected costs, could have a material adverse effect on our financial condition and results of operations and our ability to pay distributions from cash flow from operations. See “- Risks Related to the Grace Acquisition - Our earnings and FFO per share may decline as a result of the acquisition of the Grace Portfolio.”

The amount of cash available for distributions is affected by many other factors, such as operating income from our properties and our operating expense levels. Our actual results may differ significantly from the assumptions used by our board of directors in establishing the distribution rate to stockholders. We may not have sufficient cash from operations to make a distribution required to qualify for or maintain our qualification as a REIT. Accordingly, there can be no assurance that we will be able to maintain our current level of distributions or that distributions will increase over time.

Our rights and the rights of our stockholders to recover claims against our officers, directors and our Advisor are limited, which could reduce our stockholders' and our recovery against them if they cause us to incur losses.

Maryland law provides that a director has no liability in that capacity if he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be in the corporation's best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances. In addition, subject to certain limitations set forth therein or under Maryland law, our charter provides that no director or officer will be liable to us or our stockholders for monetary damages and requires us to indemnify our directors, our officers and our Advisor and our Advisor's affiliates and permits us to indemnify our employees and agents. We and our stockholders also may have more limited rights against our directors, officers, employees and agents, and our Advisor and its affiliates, than might otherwise exist under common law, which could reduce our stockholders' and our recovery against them. In addition, we may be obligated to fund the defense costs incurred by our directors, officers, employees and agents, or our Advisor and its affiliates in some cases, which would decrease the cash otherwise available for distribution to our stockholders.

Commencing with the NAV pricing date, the offering price for shares in our primary offering and pursuant to our DRIP, as well as the repurchase price for our shares under our SRP, will vary quarterly and will be based on NAV, which will be based upon subjective estimates, judgments, assumptions and opinions about future events, and also may not accurately reflect the value of our assets and liabilities at a particular time for other reasons.

Commencing with the filing of our second quarterly financial filing with the SEC, pursuant to the Securities Exchange Act of 1934, as amended, following the earlier to occur of (i) our acquisition of at least $2.0 billion in total investment portfolio assets or (ii) January 7, 2016 (the "NAV pricing date"), the offering price for shares in our primary offering (to the extent we are still offering shares in our primary offering) and pursuant to our DRIP, as well as the repurchase price for our shares under our SRP, will vary quarterly and will be based on NAV. Our Advisor, with the assistance of a third party, will calculate NAV quarterly by estimating the market value of our assets and liabilities, many of which may be illiquid.

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In calculating NAV, our Advisor will consider an estimate provided by an independent valuer of the market value of our real estate assets. Our Advisor will review such valuation for consistency with its determinations of value and our valuation guidelines and the reasonableness of the independent valuer’s conclusions. The final determination of value may be made by a valuation committee comprised of our independent directors if our Advisor determines that the appraisals of the independent valuer are materially higher or lower than its valuations. The valuations used by the independent valuer, our Advisor and our board of directors may not be precise because the valuation methodologies used to value a real estate portfolio involve subjective judgments, assumptions and opinions about future events, such as comparable sales, rental and operating expense data, capitalization or discount rate, and projections of future rent and expenses. If different judgments, assumptions or opinions were used, a different estimate would likely result.

Each property will be appraised at least annually and appraisals will be spread out over the course of a year so that approximately 25% of all properties are appraised each quarter. Because each property will be appraised only annually, there may be changes in the course of the year that are not fully reflected in the quarterly NAV. As a result, the published NAV may not fully reflect changes in value that may have occurred since the prior quarterly valuation. Moreover, appraised value of a particular property may be greater or less than its potential realizable value, which would cause our estimated NAV to be greater or less than the potential realizable NAV. Any resulting disparity may benefit the selling or non-selling stockholders or purchasers. Further, valuations do not necessarily represent the price at which we would be able to sell an asset.

In addition, our NAV may suddenly change if the appraised values of our properties materially change or the actual operating results differ from what we originally budgeted for that quarter. For example, if a property experiences an unanticipated structural or environmental event, the value of a property may materially change. Furthermore, if we cannot immediately quantify the financial impact of any extraordinary events, our NAV as published on any given quarter will not reflect such events. As a result, the NAV published after the announcement of a material event may differ significantly from our actual NAV until we are able to quantify the financial impact of such events and our NAV is appropriately adjusted on a going forward basis.

NAV does not represent the fair value of our assets less liabilities under GAAP. NAV is not a representation, warranty or guarantee of: (a) what a stockholder would ultimately realize upon a liquidation of our assets and settlement of our liabilities or upon any other liquidity event, (b) that the shares of our common stock would trade at NAV on a national securities exchange, (c) what any third party in an arm’s-length transaction would offer to purchase all or substantially all of our shares of common stock at NAV, and (d) that NAV would equate to a market price for an open-end real estate fund. We will not retroactively adjust the valuation of such assets, the price of our common stock, the price we paid to repurchase shares of our common stock or NAV-based fees we paid to our Advisor and Dealer Manager.

Stockholders' interest in us may be diluted if the price we pay in respect of shares repurchased under our SRP exceeds the net asset value, at such time as we calculate the NAV of our share.

The prices we may pay for shares repurchased under our SRP may exceed the NAV of such shares at the time of repurchase, which may reduce the NAV of the remaining shares.

Our stockholders' investment may be subject to additional risks if we make international investments.

We may purchase real estate assets located in Canada and Mexico. Any international investments may be affected by factors peculiar to the laws of the jurisdiction in which the property is located. These laws may expose us to risks that are different from and in addition to those commonly found in the United States. Foreign investments could be subject to the following risks:

• governmental laws, rules and policies, including laws relating to the foreign ownership of real property or mortgages and laws relating to the ability of foreign persons or corporations to remove profits earned from activities within the country to the person’s or corporation’s country of origin;

• variations in currency exchange rates or exchange controls or other currency restrictions and fluctuations in exchange ratios related to foreign currency;

• adverse market conditions caused by inflation or other changes in national or local economic conditions;

• changes in relative interest rates;

• changes in the availability, cost and terms of mortgage funds resulting from varying national economic policies;

• changes in real estate and other tax rates, the tax treatment of transaction structures and other changes in operating expenses in a particular country where we have an investment;

• lack of uniform accounting standards (including availability of information in accordance with GAAP);

• changes in land use and zoning laws;

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• more stringent environmental laws or changes in these laws;

• changes in the social stability or other political, economic or diplomatic developments in or affecting a country where we have an investment;

• legal and logistical barriers to enforcing our contractual rights; and

• expropriation, confiscatory taxation and nationalization of our assets located in the markets where we operate.

Any of these risks could have an adverse effect on our business, results of operations and ability to pay distributions to our stockholders.

Neither we nor our Sponsor has any substantial experience investing in properties or other real estate-related assets located outside the United States and we may not have the expertise necessary to maximize the return on our international investments.

Risks Related to the Grace Acquisition

Our earnings and FFO per share may decline as a result of the acquisition of the Grace Portfolio.

Our earnings and FFO per share may decline as a result of, among other things, our failure to achieve the expected benefits of, or the incurrence of unanticipated costs relating to, the acquisition of the Grace Portfolio.

The risks associated with our acquisition of the Grace Portfolio include, without limitation, the following:

• the integration of the Grace Portfolio, which is substantially larger than our portfolio prior to the acquisition of the Grace Portfolio, may be difficult, and we may be unable to successfully integrate operations, maintain consistent standards, controls, policies and procedures;

• the integration of the Grace Portfolio may disrupt our ongoing operations or the ongoing operations of the Grace Portfolio, and our management’s attention may be diverted away from other business concerns;

• the Grace Portfolio may fail to perform as expected and market conditions may result in lower than expected occupancy and room rates;

• we may spend more than budgeted amounts to make necessary improvements or renovations to the Grace Portfolio;

• some of the properties in the Grace Portfolio are located in unfamiliar markets where we face risks associated with an incomplete knowledge or understanding of the local market, a limited number of established business relationships in the area and a relative unfamiliarity with local governmental and permitting procedures; and

• the Grace Portfolio may subject us to liabilities and without any recourse, or with only limited recourse, with respect to unknown liabilities (i.e. if a liability were asserted against us based upon ownership of the Grace Portfolio, we might have to pay substantial sums to settle it, which could adversely affect our cash flow).

We intend to pay distributions from cash flows from operations following the completion of the Grace Acquisition, but our ability to do so depends on our ability to realize the expected benefits of the acquisition of the Grace Portfolio. Failure to realize the expected benefits of the acquisition of the Grace Portfolio, within the anticipated timeframe or at all, or the incurrence of unexpected costs, could have a material adverse effect on our financial condition and results of operations and our ability to pay distributions from cash flow from operations.

As a result of the additional indebtedness incurred and the issuance of the preferred equity interests to acquire the Grace Portfolio, we may experience a potential material adverse effect on our financial condition and results of operations.

On February 27, 2015, we acquired the Grace Portfolio. We funded the purchase price through a combination of $230.1 million in cash on-hand funded with proceeds from the Offering, the assumption of $903.9 million in existing mortgage and mezzanine indebtedness collateralized by 96 of the 116 hotels in the Grace Portfolio, (the "Assumed Grace Indebtedness"), the incurrence of $227.0 million in new mortgage financing secured by the remaining 20 hotels and one of the hotels in the Barceló Portfolio (the "Additional Grace Mortgage Loan" and, together with the Assumed Grace Indebtedness, the "Grace Indebtedness"), and the issuance of the Grace Preferred Equity Interests for $447.1 million.

Our incurrence of the Grace Indebtedness and the issuance of the Grace Preferred Equity Interests could also have adverse consequences on our business, such as:

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• requiring us to use a substantial portion of our cash flow from operations to service the Grace Indebtedness and pay distributions on the Grace Preferred Equity Interests;

• limiting our ability to obtain additional financing to fund our working capital needs, acquisitions, capital expenditures or other debt service requirements or for other purposes;

• increasing the costs of incurring additional debt;

• increasing our exposure to floating interest rates;

• limiting our ability to compete with other companies that are not as highly leveraged, as we may be less capable of responding to adverse economic and industry conditions;

• restricting us from making strategic acquisitions, developing properties or exploiting business opportunities;

• restricting the way in which we conduct our business because of financial and operating covenants in the agreements governing the Grace Indebtedness, including the rights of our lenders to consent before we modify hotel management agreements or franchise agreements and that require us to replace sub-property managers under certain circumstances;

• consent rights the holders of the Grace Preferred Equity Interests will have over major actions by us relating to the Grace Portfolio, including the sale of certain hotels;

• if we are unable to satisfy the redemption, distribution, or other requirements of the Grace Preferred Equity Interests (including if there is a default under the related guarantees provided by our company, our operating partnership and the individual principals of the parent of our Sponsor), holders of the Grace Preferred Equity Interests will have certain rights, including the ability to assume control of the operations of the Grace Portfolio;

• exposing us to potential events of default (if not cured or waived) under covenants contained in our debt instruments that could have a material adverse effect on our business, financial condition and operating results;

• increasing our vulnerability to a downturn in general economic conditions; and

• limiting our ability to react to changing market conditions in our industry.

The impact of any of these potential adverse consequences could have a material adverse effect on our results of operations and financial condition.

We intend to use substantially all available offering proceeds following the acquisition of the Grace Portfolio to reduce our borrowings to our intended limit, which may limit our ability to pay distributions or acquire additional properties for some time.

Prior to our entry into an agreement to acquire the Grace Portfolio in May 2014, a majority of our independent directors waived the total portfolio leverage requirement of our charter with respect to the acquisition of the Grace Portfolio should such total portfolio leverage exceed 300% of our total "net assets" (as defined in our charter) upon the acquisition of the Grace Portfolio. Following the acquisition of the Grace Portfolio in February 2015, our total portfolio leverage (which includes the Grace Preferred Equity Interests) significantly exceeded this 300% limit, and we expect it will continue to do so for some time. Accordingly, we intend to use substantially all available offering proceeds following the acquisition of the Grace Portfolio to reduce our borrowings to our intended limit, which is below the 300% maximum limit. In addition, the principal amount of our outstanding secured financing, which excludes the Grace Preferred Equity Interests, is approximately 60% of the total value of our real estate investments and our other assets.

The $63.1 million principal amount outstanding under the Barceló Promissory Note (defined under “Item 2. Properties”) matures, by its terms, ten business days after the date we raise $70.0 million in common equity in our Offering following the closing of the acquisition of the Grace Portfolio and payment of all acquisition related expenses (including payments to our Advisor and its affiliates), which has not yet occurred. In addition, following the earlier to occur of either (i) the repayment of the Barceló Promissory Note, together with the $3.5 million deferred payment due concurrently, or (ii) the date the gross amount of proceeds from our Offering we receive after the acquisition of the Grace Portfolio and payment of all acquisition related expenses (including payments to our Advisor and its affiliates) exceeds $100.0 million, we are required to use 35% of any equity proceeds from our Offering to redeem the Grace Preferred Equity Interests at par, up to a maximum of $350.0 million in redemptions for any 12-month period. We are required to redeem 50% of the Grace Preferred Equity Interests by

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February 27, 2018 and 100% of the Grace Preferred Equity Interests upon the earlier of (i) 90 days following the stated maturity (including extension options) under the Grace Indebtedness, and (ii) February 27, 2019.

While repayment of the Barceló Promissory Note and required redemptions of the Grace Preferred Equity Interests will contribute to reducing our borrowings to our intended limit, we may continue to use substantially all available offering proceeds to repay debt even after we have reduced our borrowings to their intended limit. In addition, the continued use of substantially all offering proceeds to repay debt will reduce the available cash flow to fund working capital, acquisitions, capital expenditures and other general corporate purposes, which could have a material adverse impact on our business and reduce cash available for distributions to holders of our common stock.

Moreover, there can be no assurance we will be able to raise the substantial funds required to meet these objectives on a timely basis, or at all. Our Offering is being made on a reasonable best efforts basis, whereby the brokers participating in the Offering are only required to use their reasonable best efforts to sell our shares and have no firm commitment or obligation to purchase any of the shares. Moreover, our Offering must maintain registration in every state in which we offer or sell shares. Generally, such registrations are for a period of one year, and there can be no assurance they will be renewed or otherwise extended annually. Thus, we may have to stop selling shares in any state in which our registration is not renewed or otherwise extended annually. During the period from January 7, 2014 (the date we commenced our Offering) through March 15, 2015, we have received $375.1 million in proceeds from our Offering, all of which has been used to pay distributions, reduce borrowings, acquire properties (including the Grace Portfolio) or for general corporate purposes. There can be no assurance as to the length of time we will be limited in our ability to pay distributions or acquire additional properties using proceeds from our Offering.

In addition, if we are unable to continue to raise substantial funds we will not achieve our objective of continuing to reduce our fixed operating expenses as a percentage of gross income, and our financial condition and ability to pay distributions could be adversely affected. To the extent our inability to raise substantial funds could also result in our being unable to make required redemptions or distributions and meet other conditions of the Grace Preferred Equity Interests, the holders of Grace Preferred Equity Interests will have certain rights, including the ability to assume control of the operations of the Grace Portfolio.

If we are unable to find a replacement guarantor for certain obligations related to the Grace Indebtedness, we will remain dependent on the previous guarantors to remain in this capacity and may be required to make payments, for reimbursements or guarantee fees, to them.

The previous guarantors of the Assumed Grace Indebtedness (who are affiliates of the sellers of the Grace Portfolio) remained as guarantors, together with our company and our operating partnership, following the closing of the acquisition of the Grace Portfolio with respect to certain limited recourse obligations and environmental indemnities under the Assumed Grace Indebtedness, and we were required to enter into a supplemental guarantee agreement to ensure that they would remain in this capacity. The supplemental guarantee agreement provides that we, together with our operating partnership and individual principals of the parent of our Sponsor, are jointly and severally liable to reimburse the previous guarantors for any payments they are required to make if their guarantee is called.

The supplemental guarantee agreement also provides that we will be required to pay a guarantee fee of $8.0 million per annum, which will start accruing in August 2016, 18 months following the closing of the acquisition of the Grace Portfolio. If we are unable to find a replacement guarantor before then or otherwise release the previous guarantors, we will be required to pay guarantee fees to the previous guarantors, which could adversely impact our results from operations and our ability to pay distributions. Our results from operations and our ability to pay distributions could also be adversely impacted if the previous guarantors are required to make any payments if their guarantee is called and we are required to reimburse them.

To comply with brand standards under our franchise agreements, we are required to make capital expenditures, which will be substantial, pursuant to property improvement plans, and we are required to make regular deposits to partially reserve for these amounts under the Grace Indebtedness.

In connection with the Grace Acquisition, our franchisors required property improvement plans ("PIPs"), which set forth their renovation requirements for the hotels in the Grace Portfolio.

Pursuant to the terms of the Assumed Grace Indebtedness, we are required to make an aggregate of $73.5 million in periodic PIP reserve deposits during 2015 and 2016 to cover a portion of the estimated costs of the PIPs on the total 96 hotels collateralizing that debt. In addition, pursuant to a guaranty entered into in connection with the Assumed Grace Indebtedness, we are required to guarantee the difference between (i) the cost of the PIPs with respect to those 96 hotels during the 24-month period following the acquisition of the Grace Portfolio, estimated to be $102.0 million, and (ii) the amount actually deposited into the PIP reserve with respect to the Assumed Grace Indebtedness.

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Pursuant to the terms of the Additional Grace Mortgage Loan, we are required to make an aggregate of $20.0 million in periodic PIP reserve deposits during 2015 and 2016 to cover a portion of the estimated costs of the PIPs on the total 21 hotels collateralizing that debt. The Grace Indebtedness also requires us to deposit 4.0% of the gross revenue of the hotels into a separate account for the ongoing replacement or refurbishment of furniture, fixtures and equipment at the hotels.

In connection with any future revisions to our franchise or hotel management agreements or a refinancing of the Grace Indebtedness, our franchisors may require that we make further renovations or enter into additional PIPs. In addition, upon regular inspection of our hotels our franchisors may determine that additional renovations are required to bring the physical condition of our hotels into compliance with the specifications and standards each franchisor or hotel brand has developed.

These capital expenditures will be substantial and could adversely affect our ability to pay distributions or reduce our borrowings or use capital for other corporate purposes. Moreover, if we do not satisfy the PIP renovation requirements, the franchisor may have the right to terminate the applicable agreement and we may be in default under our indebtedness. In addition, if we default on a franchise agreement as a result of our failure to comply with the PIP requirements, in general, we will be required to pay the franchisor liquidated damages, and we may also be in default under the Grace Indebtedness.

If we are found to be in breach of a ground lease or are unable to renew a ground lease, we could be materially and adversely affected.

Eight of the hotels in the Grace Portfolio are on land subject to ground leases. Accordingly, we only own a long-term leasehold or similar interest in those hotels, and we have no economic interest in the land or buildings at the expiration of the ground lease or permit and will not share in the income stream derived from the lease or permit or in any increase in value of the land associated with the underlying property.

If we are found to be in breach of a ground lease, we could lose the right to use the hotel. We could also be in breach of the Grace Indebtedness. In addition, unless we can purchase a fee interest in the underlying land and improvements or extend the terms of these leases before their expiration, as to which no assurance can be given, we will lose our right to operate these properties and our interest in the improvements upon expiration of the leases. Our ability to exercise any extension options relating to our ground leases is subject to the condition that we are not in default under the terms of the ground lease at the time that we exercise such options, and we can provide no assurances that we will be able to exercise any available options at such time. Our ability to exercise any extension option is further subject to conditions contained in Grace Indebtedness. Furthermore, we can provide no assurances that we will be able to renew any ground lease upon its expiration. If we were to lose the right to use a hotel due to a breach or non-renewal of the ground lease, we would be unable to derive income from such hotel and would be required to purchase an interest in another hotel to attempt to replace that income, which could materially and adversely affect us.

Risks Related to Conflicts of Interest

Our Advisor and its affiliates, including some of our executive officers, directors and other key real estate professionals, face conflicts of interest caused by their compensation arrangements with us, which could result in actions that are not in the long-term best interests of our stockholders.

Our Advisor and its affiliates receive fees from us, which could be substantial. These fees could influence our Advisor’s advice to us as well as its judgment with respect to:

• the continuation, renewal or enforcement of our agreements with affiliates of our Sponsor, including the advisory agreement, the property management agreements, the dealer-manager agreement and the sub-property management agreements between our Property Manager and Sub-Property Manager;

• public offerings of equity by us, which will likely entitle our Advisor to increased acquisition fees and asset management subordinated participation interests;

• sales of properties and other investments to third parties, which entitle our Advisor and the Special Limited Partner to real estate commissions and possible subordinated incentive distributions, respectively;

• acquisitions of properties and other investments from other programs sponsored directly or indirectly by the parent of our Sponsor, which might entitle affiliates of our Sponsor to real estate commissions and possible subordinated incentive fees and distributions in connection with its services for the seller;

• acquisitions of properties and other investments from third parties and loan originations to third parties, which entitle our Advisor to acquisition fees and asset management subordinated participation interests;

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• borrowings to acquire properties and other investments and to originate loans, which borrowings generate financing coordination fees and increase the acquisition fees and asset management subordinated participation interests payable to our Advisor;

• whether and when we seek to list our common stock on a national securities exchange, which listing could entitle the Special Limited Partner to a subordinated incentive listing distribution; and

• whether and when we seek to sell the company or its assets, which sale could entitle our Advisor to a subordinated participation in net sales proceeds.

The fees our Advisor receives in connection with transactions involving the acquisition of assets are based initially on the purchase price of the investment, including the amount of any loan originations, and are not based on the quality of the investment or the quality of the services rendered to us. This may influence our Advisor to recommend riskier transactions to us, and our Advisor may have an incentive to incur a high level of leverage. In addition, because the fees are based on the purchase price of the investment, it may create an incentive for our Advisor to recommend that we purchase assets at higher prices. In addition, from time to time, subject to the approval of a majority of our independent directors, we may engage one or more entities under common control with the parent of our Sponsor or our Advisor to provide services not provided under existing agreements that are outside of our ordinary course of operations which may create similar incentives. For example, in connection with the Grace Acquisition, we entered into an agreement with an affiliate of our Dealer Manager pursuant to which we will pay a fee equal to 0.25% of the total transaction value.

Our Sub-Property Manager is an affiliate of our Advisor and Property Manager and therefore we may face conflicts of interest in determining whether to assign certain operating assets to our Sub-Property Manager or an unaffiliated property manager.

Our Sub-Property Manager is an affiliate of our Advisor and Property Manager. As of February 27, 2015, 34 of the hotels in the Grace Portfolio and all six of the hotels in the Barceló Portfolio are managed by our Sub-Property Manager and 82 of the hotels in the Grace Portfolio are managed by third-party sub-property managers. Although the lender with respect to the Assumed Grace Indebtedness generally must consent before we terminate, cancel, materially modify, renew or extend any of the hotel management agreements, for a period of two years following the completion of the acquisition of the Grace Portfolio, or until February 27, 2017, we may replace any third-party sub-property manager with our Sub-Property Manager without consent of the lender if certain other conditions have been satisfied. With respect to the Additional Grace Mortgage Loan, we have right to replace a manager as long as no event of default has occurred and we replace the manager with a qualified manager, which includes our Sub-Property Manager. As we acquire additional hotel assets, our Advisor will assign such asset to our Sub-Property Manager or a third-party sub-property manager.

Because our Sub-Property Manager is affiliated with our Advisor, our Advisor faces certain conflicts of interest in making these decisions because of the compensation that will be paid to our Sub-Property Manager.

Our Sub-Property Manager will continue to operate as a hotel property manager and may face competing demands for its time.

Our Sub-Property Manager will face competing demands for its time while it enters into management agreements with hotels not owned by us in the ordinary course of business. Because we intend to rely upon our Sub-Property Manager for its underwriting and operating capabilities, we may be unable to identify potential acquisitions for our portfolio without the investment and underwriting advice provided by the professionals of our Sub-Property Manager. Additionally, the operations of our hotels may be adversely affected by the competing demands for our Sub-Property Manager’s time.

Our Sponsor faces conflicts of interest relating to the acquisition of assets and such conflicts may not be resolved in our favor, meaning that we could invest in less attractive assets, which could limit our ability to make distributions and reduce our stockholders’ overall investment return.

We rely on our Sponsor and the executive officers and other key real estate professionals at our Advisor, our Property Manager and our Sub-Property Manager to identify suitable investment opportunities for us. Several of the other key real estate professionals of our Advisor are also the key real estate professionals at our Sponsor and their other public programs. Many investment opportunities that are suitable for us may also be suitable for other programs sponsored directly or indirectly by American Realty Capital. Generally, our Advisor will not pursue any opportunity to acquire any real estate properties or real estate-related loans and securities that are directly competitive with our investment strategies, unless and until the opportunity is first presented to us, subject to certain exceptions. For so long as we are externally advised, our charter provides that it shall not be a proper purpose for the Company to purchase real estate or any significant asset related to real estate unless our Advisor has recommended the investment to us. Thus, the executive officers and real estate professionals of our Advisor could direct attractive investment opportunities to other entities or investors. Such events could result in us investing in properties that provide less attractive returns, which may reduce our ability to make distributions.

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Our Advisor will face conflicts of interest relating to joint ventures, which could result in a disproportionate benefit to the other venture partners at our expense and adversely affect the return on our stockholders' investment.

We may enter into joint ventures with other American Realty Capital-sponsored programs for the acquisition of commercial real estate debt and other commercial real estate investments. Our Advisor may have conflicts of interest in determining which American Realty Capital-sponsored program should enter into any particular joint venture agreement. The co-venturer may have economic or business interests or goals that are or may become inconsistent with our business interests or goals. In addition, our Advisor may face a conflict in structuring the terms of the relationship between our interests and the interest of the affiliated co-venturer and in managing the joint venture. Since our Advisor and its affiliates may control both the affiliated co-venturer and, to a certain extent, us, agreements and transactions between the co-venturers with respect to any such joint venture will not have the benefit of arm’s-length negotiation of the type normally conducted between unrelated co-venturers, which may result in the co-venturer receiving benefits greater than the benefits that we receive. In addition, we may assume liabilities related to the joint venture that exceed the percentage of our investment in the joint venture.

Our Dealer Manager signed a Letter of Acceptance, Waiver and Consent with the Financial Industry Regulatory Authority (“FINRA”); any further action, proceeding or litigation with respect to the substance of the Letter of Acceptance, Waiver and Consent or in connection with any other similar action, proceeding or litigation that may occur, could adversely affect this offering or the pace at which we raise proceeds.

In April 2013, our Dealer Manager received notice and a proposed Letter of Acceptance, Waiver and Consent (“AWC”) from FINRA, the self-regulatory organization that oversees broker dealers, that certain violations of SEC and FINRA rules, including Rule 10b-9 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and FINRA Rule 2010, occurred in connection with its activities as a co-dealer manager for a public offering. Without admitting or denying the findings, our Dealer Manager submitted an AWC, which FINRA accepted on June 4, 2013. In connection with the AWC, our Dealer Manager consented to the imposition of a censure and a fine of $60,000.

To the extent any action would be taken against our Dealer Manager in connection with the above AWC or in connection with any other similar action, proceeding or litigation that may occur, our Dealer Manager could be adversely affected.

American National Stock Transfer, LLC, our affiliated transfer agent, has a limited operating history and a failure by our transfer agent to perform its functions for us effectively may adversely affect our operations.

Our transfer agent is a related party of our Sponsor that has been providing certain transfer agency services for programs sponsored directly or indirectly by AR Capital, LLC since 2013. Because of its limited experience, there is no assurance that our transfer agent will be able to effectively provide transfer agency and registrar services to us. Furthermore, our transfer agent is responsible for supervising third party service providers who may, at times, be responsible for executing certain transfer agency and registrar services. If our transfer agent fails to perform its functions for us effectively, our operations may be adversely affected.

Our officers and the executive chairman of our board of directors face conflicts of interest related to the positions they hold with affiliated entities, which could hinder our ability to successfully implement our business strategy and to generate returns to our stockholders.

Our executive officers also are officers of our Advisor and William M. Kahane is an officer and director of certain other real estate programs sponsored by the American Realty Capital group of companies. As a result, these individuals owe fiduciary duties to these other entities and their stockholders and limited partners, which fiduciary duties may conflict with the duties that they owe to us and our stockholders. Their loyalties to these other entities could result in actions or inactions that are detrimental to our business, which could harm the implementation of our business strategy and our investment and leasing opportunities. Conflicts with our business and interests are most likely to arise from involvement in activities related to: (a) allocation of new investments and management time and services between us and the other entities; (b) our purchase of properties from, or sale of properties to, affiliated entities; (c) the timing and terms of the investment in or sale of an asset; (d) investments with affiliates of our Advisor; (e) compensation to our Advisor; and (f) our relationship with our Dealer Manager. If we do not successfully implement our business strategy, we may be unable to generate the cash needed to make distributions to our stockholders and to maintain or increase the value of our assets. If these individuals act in a manner that is detrimental to our business or favor one entity over another, they may be subject to liability for breach of fiduciary duty.

Risks Related to Our Corporate Structure

We depend on our Operating Partnership and its subsidiaries for cash flow and are effectively structurally subordinated in right of payment to the obligations of our Operating Partnership and its subsidiaries, which could adversely affect our ability to make distributions to our stockholders.

We have no business operations of our own. Our only significant asset is and will be the general and limited partnership interests of our Operating Partnership. We conduct, and intend to conduct, all of our business operations through our Operating Partnership. Accordingly, our only source of cash to pay our obligations is distributions from our Operating Partnership and its

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subsidiaries of their net earnings and cash flows. We cannot assure our stockholders that our Operating Partnership or its subsidiaries will be able to, or be permitted to, make distributions to us that will enable us to make distributions to our stockholders from cash flows from operations. Each of our Operating Partnership’s subsidiaries is a distinct legal entity and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from such entities. Therefore, in the event of our bankruptcy, liquidation or reorganization, our assets and those of our Operating Partnership and its subsidiaries will be able to satisfy as the claims of our stockholders only after all of our and our Operating Partnership and its subsidiaries liabilities and obligations have been paid in full.

Our stockholders are limited in their ability to sell their shares pursuant to our SRP and may have to hold their shares for an indefinite period of time.

Our board of directors may amend the terms of our SRP without stockholder approval. Our board of directors also is free to suspend or terminate the program upon 30 days’ notice or to reject any request for repurchase. There is no assurance that funds available for our SRP will be sufficient to accommodate all requests. In addition, the SRP includes numerous restrictions that would limit our stockholders’ ability to sell their shares. Prior to the time our Advisor begins calculating NAV, unless waived by our board of directors, a stockholder must have held his or her shares for at least one year in order to participate in our SRP. Prior to the NAV pricing date, subject to funds being available, the purchase price for shares repurchased under our SRP will be as set forth below (unless such repurchase is in connection with a stockholder’s death or disability): (a) for stockholders who have continuously held their shares of our common stock for at least one year, the price will be the lower of $23.13 and 92.5% of the amount paid for each such share; (b) for stockholders who have continuously held their shares of our common stock for at least two years, the price will be the lower of $23.75 and 95.0% of the amount paid for each such share; (c) for stockholders who have continuously held their shares of our common stock for at least three years, the price will be the lower of $24.38 and 97.5% of the amount paid for each such share; and (d) for stockholders who have held their shares of our common stock for at least four years, the price will be the lower of $25.00 and 100.0% of the amount they paid for each share (in each case, as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to our common stock). These limits might prevent us from accommodating all repurchase requests made in any year.

After the NAV pricing date, stockholders may make daily requests that we repurchase all or a portion (but generally at least 25% of a stockholder’s shares) of their shares pursuant to our SRP and the repurchase price will vary quarterly and will be based on NAV. At such time, we will limit shares repurchased during any calendar year to 5% of the weighted average number of shares outstanding during the prior calendar year. Accordingly, following the NAV pricing date, in order to provide liquidity for repurchases, we intend to maintain 5% of our NAV in excess of $1.0 billion in cash, cash equivalents and other short-term investments and certain types of real estate related assets that can be liquidated more readily than properties, or collectively, liquid assets. There can be no assurance, however, that we will maintain this level of liquid assets, and our stockholders will only be able to have their shares repurchased to the extent that we have sufficient liquid assets to repurchase them. Accordingly, there can be no assurance we will be able to satisfy all repurchase requests made after the NAV pricing date.

See the section entitled “Share Repurchase Program” in the notes to the financial statements contained within this Annual Report on Form 10-K for more information about the SRP. These restrictions severely limit our stockholders’ ability to sell their shares should they require liquidity and limit their ability to recover the value they invested or the fair market value of their shares.

We established the offering price on an arbitrary basis; as a result, the actual value of our stockholders’ investment may be substantially less than what they paid.

Our board of directors has arbitrarily determined the offering price of the shares and such price bears no relationship to our book or asset values, or to any other established criteria for valuing issued or outstanding shares. Because the offering price is not based upon any independent valuation, the offering price is not indicative of the proceeds that our stockholders would receive upon liquidation.

Future offerings of equity securities that are senior to our common stock for purposes of dividend distributions or upon liquidation may adversely affect the per share trading price of our common stock.

In the future, we may attempt to increase our capital resources by making additional offerings of equity securities. Under our charter, we may issue, without stockholder approval, preferred stock or other classes of common stock with rights that could dilute the value of our stockholders’ shares of common stock. Any issuance of preferred stock must be approved by a majority of our independent directors not otherwise interested in the transaction, who will have access, at our expense, to our legal counsel or to independent legal counsel. Upon liquidation, holders of our shares of preferred stock will be entitled to receive our available assets prior to distribution to the holders of our common stock. Additionally, any convertible, exercisable or exchangeable securities that we issue in the future may have rights, preferences and privileges more favorable than those of our common stock and may result in dilution to owners of our common stock. Holders of our common stock are not entitled to preemptive rights or other protections against dilution. Our preferred stock, if issued, could have a preference on liquidating distributions or a preference on dividend payments that could limit our ability to pay dividends to the holders of our common

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stock. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, our stockholders bear the risk of our future offerings reducing the per share trading price of our common stock and diluting their interest in us.

Because our Advisor is wholly owned by our Sponsor through the Special Limited Partner, the interests of the Advisor and the Sponsor are not separate and as a result the Advisor may act in a way that is not necessarily our stockholders' interest.

Our Advisor is indirectly wholly owned by our Sponsor through the Special Limited Partner. Therefore, the interests of our Advisor and our Sponsor are not separate and the Advisor’s decisions may not be independent from the Sponsor and may result in the Advisor making decisions to act in ways that are not in our stockholders’ interests.

Our stockholders’ interests in us will be diluted if we issue additional shares, which could reduce the overall value of our stockholders’ investments.

Our common stockholders do not have preemptive rights to any shares we issue in the future. Our charter authorizes us to issue 350,000,000 shares of capital stock, of which 300,000,000 shares are classified as common stock and 50,000,000 shares are classified as preferred stock. Our board may elect to: (a) sell additional shares in this or future public offerings; (b) issue equity interests in private offerings; (c) issue share-based awards to our independent directors, our officers or employees, or to the officers or employees of our Advisor or any of its affiliates; (d) issue shares to our Advisor, or its successors or assigns, in payment of an outstanding fee obligation; or (e) issue shares of our common stock to sellers of properties or assets we acquire in connection with an exchange of limited partnership interests of our OP. To the extent we issue additional equity interests, our stockholders’ percentage ownership interest in us will be diluted. In addition, depending upon the terms and pricing of any additional offerings and the value of our real estate investments, our investors may also experience dilution in the book value and fair value of their shares.

Payment of fees to our Advisor and its affiliates reduces cash available for investment and distributions to our stockholders.

Our Advisor and its affiliates perform services for us in connection with conducting our operations and managing the portfolio of real estate and real estate-related debt and investments. Our Advisor and its affiliates are paid substantial fees and receive substantial distributions for these services, which reduces the amount of cash available for investment in properties or distribution to stockholders.

The limit on the number of shares a person may own may discourage a takeover that could otherwise result in a premium price to our stockholders.

Our charter, with certain exceptions, authorizes our directors to take such actions as are necessary and desirable to preserve our qualification as a REIT. Unless exempted by our board of directors, no person or entity may own more than 9.8% in value of the aggregate of our outstanding shares of stock or more than 9.8% (in value or in number of shares, whichever is more restrictive) of any class or series of shares of our stock. This restriction may have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all our assets) that might provide a premium price for holders of our common stock.

Our charter permits our board of directors to issue stock with terms that may subordinate the rights of common stockholders or discourage a third party from acquiring us in a manner that might result in a premium price to our stockholders.

Our charter permits our board of directors to issue up to 350,000,000 shares of stock. In addition, our board of directors, without any action by our stockholders, may amend our charter from time to time to increase or decrease the aggregate number of shares or the number of shares of any class or series of stock that we have authority to issue. Our board of directors may classify or reclassify any unissued common stock or preferred stock into other classes or series of stock and establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption of any such stock. Thus, our board of directors could authorize the issuance of preferred stock with terms and conditions that could have a priority as to distributions and amounts payable upon liquidation over the rights of the holders of our common stock. Preferred stock could also have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all our assets) that might provide a premium price for holders of our common stock.

Maryland law prohibits certain business combinations, which may make it more difficult for us to be acquired and may limit our stockholders' ability to exit the investment.

Under Maryland law, “business combinations” between a Maryland corporation and an interested stockholder or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. These business combinations include a merger, consolidation, share exchange or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. An interested stockholder is defined as:

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• any person who beneficially owns 10% or more of the voting power of the corporation’s outstanding voting stock; or

• an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then outstanding stock of the corporation.

A person is not an interested stockholder under the statute if the board of directors approved in advance the transaction by which he or she otherwise would have become an interested stockholder. However, in approving a transaction, the board of directors may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the board of directors.

After the five-year prohibition, any business combination between the Maryland corporation and an interested stockholder generally must be recommended by the board of directors of the corporation and approved by the affirmative vote of at least:

• 80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and

• two-thirds of the votes entitled to be cast by holders of voting stock of the corporation, other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder.

These super-majority vote requirements do not apply if the corporation’s common stockholders receive a minimum price, as defined under Maryland law, for their shares in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares. The business combination statute permits various exemptions from its provisions, including business combinations that are exempted by the board of directors prior to the time that the interested stockholder becomes an interested stockholder. Pursuant to the statute, our board of directors has exempted any business combination involving our Advisor or any affiliate of our Advisor. Consequently, the five-year prohibition and the super-majority vote requirements will not apply to business combinations between us and our Advisor or any affiliate of our Advisor. As a result, our Advisor and any affiliate of our Advisor may be able to enter into business combinations with us that may not be in the best interest of our stockholders, without compliance with the super-majority vote requirements and the other provisions of the statute. The business combination statute may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer.

Maryland law limits the ability of a third-party to buy a large stake in us and exercise voting power in electing directors, which may discourage a takeover that could otherwise result in a premium price to our stockholders.

The Maryland Control Share Acquisition Act provides that “control shares” of a Maryland corporation acquired in a “control share acquisition” have no voting rights except to the extent approved by stockholders by a vote of two-thirds of the votes entitled to be cast on the matter. Shares of stock owned by the acquirer, by officers or by employees who are directors of the corporation, are excluded from shares entitled to vote on the matter. “Control shares” are voting shares of stock which, if aggregated with all other shares of stock owned by the acquirer or in respect of which the acquirer can exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise voting power in electing directors within specified ranges of voting power. Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. A “control share acquisition” means the acquisition of issued and outstanding control shares. The control share acquisition statute does not apply (a) to shares acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction, or (b) to acquisitions approved or exempted by the charter or bylaws of the corporation. Our bylaws contain a provision exempting from the Maryland Control Share Acquisition Act any and all acquisitions of our stock by any person. There can be no assurance that this provision will not be amended or eliminated at any time in the future.

Our stockholders' investment return may be reduced if we are required to register as an investment company under the Investment Company Act.

The Company is not registered, and does not intend to register itself, the Operating Partnership or any of its subsidiaries, as an investment company under the Investment Company Act. If we become obligated to register the Company, the Operating Partnership or any of its subsidiaries as an investment company, the registered entity would have to comply with a variety of substantive requirements under the Investment Company Act imposing, among other things:

• limitations on capital structure;

• restrictions on specified investments;

• prohibitions on transactions with affiliates; and

• compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly change our operations.

The Company intends to conduct its operations, directly and through wholly or majority-owned subsidiaries, so that the Company, the Operating Partnership and each of its subsidiaries is not an investment company under the Investment Company

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Act. Under Section 3(a)(1)(A) of the Investment Company Act, a company is deemed to be an “investment company” if it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities. Under Section 3(a)(1)(C) of the Investment Company Act, a company is deemed to be an “investment company” if it is engaged, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire “investment securities” having a value exceeding 40% of the value of its total assets (exclusive of government securities and cash items) on an unconsolidated basis. Rule 3a-1 under the Investment Company Act, however, generally provides that, notwithstanding Section 3(a)(1)(C) of the Investment Company Act, an issuer will not be deemed to be an “investment company” under the Investment Company Act; provided, that (a) it does not hold itself out as being engaged primarily, or propose to engage primarily, in the business of investing, reinvesting or trading in securities, and (b) on an unconsolidated basis, no more than 45% of the value of its total assets, consolidated with the assets of any wholly owned subsidiary (exclusive of U.S. government securities and cash items), consists of, and no more than 45% of its net income after taxes, consolidated with the net income of any wholly owned subsidiary (for the last four fiscal quarters combined), is derived from, securities other than U.S. government securities, securities issued by employees’ securities companies, securities issued by certain majority-owned subsidiaries of such companies and securities issued by certain companies that are controlled primarily by such companies. We believe that we, our OP and the subsidiaries of our OP will satisfy this exclusion.

A change in the value of any of our assets could cause us or one or more of our wholly or majority-owned subsidiaries to fall within the definition of “investment company” and negatively affect our ability to maintain our exemption from regulation under the Investment Company Act. To avoid being required to register the Company or any of its subsidiaries as an investment company under the Investment Company Act, we may be unable to sell assets we would otherwise want to sell and may need to sell assets we would otherwise wish to retain. In addition, we may have to acquire additional income- or loss-generating assets that we might not otherwise have acquired or may have to forgo opportunities to acquire interests in companies that we would otherwise want to acquire and would be important to our investment strategy. Our Advisor continually reviews our investment activity to attempt to ensure that we will not be regulated as an investment company.

If we were required to register the Company as an investment company but failed to do so, we would be prohibited from engaging in our business, and criminal and civil actions could be brought against us. In addition, our contracts would be unenforceable unless a court required enforcement, and a court could appoint a receiver to take control of us and liquidate our business.

If our stockholders do not agree with the decisions of our board of directors, they only have limited control over changes in our policies and operations and may not be able to change our policies and operations.

Our board of directors determines our major policies, including our policies regarding investments, financing, growth, debt capitalization, REIT qualification and distributions. Our board of directors may amend or revise these and other policies without a vote of the stockholders except to the extent that the policies are set forth in our charter. Under the Maryland General Corporation Law and our charter, our stockholders have a right to vote only on the following:

• the election or removal of directors;

• any amendment of our charter, except that our board of directors may amend our charter without stockholder approval to (a) increase or decrease the aggregate number of our shares of stock or the number of shares of stock of any class or series that we have the authority to issue, (b) effect certain reverse stock splits and (c) change our name or the name or other designation or the par value of any class or series of our stock and the aggregate par value of our stock;

• our liquidation or dissolution;

• certain reorganizations of our company, as provided in our charter; and

• certain mergers, consolidations or sales or other dispositions of all or substantially all our assets, as provided in our charter.

All other matters are subject to the discretion of our board of directors.

Our board of directors may change our investment policies without stockholder approval, which could alter the nature of their investments.

Our charter requires that our independent directors review our investment policies at least annually to determine that the policies we are following are in the best interest of our stockholders. These policies may change over time. The methods of implementing our investment policies also may vary as the commercial debt markets change, new real estate development trends emerge and new investment techniques are developed. Our investment policies, the methods for their implementation, and our other objectives, policies and procedures may be altered by our board of directors without the approval of our stockholders. As a result, the nature of our stockholders' investment could change without their consent.

General Risks Related to Investments in Real Estate

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Our operating results will be affected by economic and regulatory changes that have an adverse impact on the real estate market in general, and we cannot assure our stockholders that we will be profitable or that we will realize growth in the value of our real estate properties.

Our operating results are subject to risks generally incident to the ownership of real estate, including:

• changes in general economic or local conditions;

• changes in supply of or demand for similar or competing properties in an area;

• changes in interest rates and availability of permanent mortgage funds that may render the sale of a property difficult or unattractive;

• changes in tax, real estate, environmental and zoning laws; and

• periods of high interest rates and tight money supply.

These and other reasons may prevent us from being profitable or from realizing growth or maintaining the value of our real estate properties.

The continued recovery of real estate markets from the recent recession is dependent upon forecasted moderate economic growth, which if significantly slower than expected could have a negative impact on the performance of our investment portfolio.

The U.S. economy is in the process of recovering from a severe global recession and real estate markets have also stabilized and begun to recover. Based on moderate economic growth in the future and historically low levels of new supply in the commercial real estate pipeline, a stronger recovery is forecasted for all property sectors. Nevertheless, this ongoing economic recovery remains fragile and could be slowed or halted by significant external events. As a result, real estate markets could perform lower than expected. A severe weakening of the economy or a renewed recession could also lead to lower occupancy, which could create an oversupply of rooms resulting in reduced rates to maintain occupancy. There can be no assurance that our real estate investments will not be adversely impacted by a severe slowing of the economy or renewed recession. Fluctuations in interest rates, limited availability of capital and other economic conditions beyond our control could negatively impact our portfolio and decrease the value of our stockholders' investment.

Part of our strategy for building our portfolio may involve acquiring assets opportunistically. This strategy will involve a higher risk of loss than more conservative investment strategies.

In order to meet our investment objectives we may acquire opportunistic assets that we can reposition, redevelop or remarket to create value enhancement and capital appreciation. Our strategy for acquiring properties may involve the acquisition of properties in markets that are depressed. To the extent we invest in these types of markets, we will face increased risks relating to changes in local market conditions and increased competition for similar properties in the same market, as well as increased risks that these markets will not recover and the value of our properties in these markets will not increase, or will decrease, over time. For these and other reasons, we cannot assure our stockholders that we will be profitable or that we will realize growth in the value of our real estate properties, and as a result, our ability to make distributions to our stockholders could be affected. Our potential approach to acquiring and operating income-producing hotel properties involves more risk than comparable real estate programs that have a targeted holding period for investments that is longer than ours, utilize leverage to a lesser degree or employ more conservative investment strategies.

We may obtain only limited warranties when we purchase a property and would have only limited recourse if our due diligence did not identify any issues that lower the value of our property, which could adversely affect our financial condition and ability to make distributions to our stockholders.

The seller of a property often sells such property in its “as is” condition on a “where is” basis and “with all faults,” without any warranties of merchantability or fitness for a particular use or purpose. In addition, purchase agreements may contain only limited warranties, representations and indemnifications that will only survive for a limited period after the closing. The purchase of properties with limited warranties increases the risk that we may lose some or all our invested capital in the property as well as the loss of income from that property.

Our inability to sell a property when we desire to do so could adversely impact our ability to pay cash distributions to our stockholders.

The real estate market is affected by many factors, such as general economic conditions, availability of financing, interest rates and other factors, including supply and demand, that are beyond our control. We cannot predict whether we will be able to sell any property for the price or on the terms set by us, or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We cannot predict the length of time needed to find a willing purchaser and to close the sale of a property. In addition, the holders of the Grace Preferred Equity Interests have consent rights over major actions by us relating to

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the Grace Portfolio, including the sale of certain hotels. Our inability to obtain the required consents could also limit our ability to sell properties.

We may be required to expend funds to correct defects or to make improvements before a property can be sold. We cannot assure our stockholders that we will have funds available to correct such defects or to make such improvements. Moreover, in acquiring a property, we may agree to restrictions that prohibit the sale of that property for a period of time or impose other restrictions, such as a limitation on the amount of debt that can be placed or repaid on that property. These provisions would restrict our ability to sell a property.

We may not be able to sell our properties at a price equal to, or greater than, the price for which we purchased such property, which may lead to a decrease in the value of our assets.

The value of a property to a potential purchaser may not increase over time, which may restrict our ability to sell a property, or if we are able to sell such property, may lead to a sale price less than the price that we paid to purchase the property.

We may acquire or finance properties with lock-out provisions, which may prohibit us from selling properties, which could have an adverse effect on our stockholders' investment.

Lock-out provisions, which are included in the Grace Indebtedness and may be included in our future indebtedness, could materially restrict us from selling or otherwise disposing of or refinancing properties. For example, these provisions may prohibit us or restrict us from prepaying all or a portion of the debt for a period of time, or may require us to maintain specified debt levels for a period of time on some or all properties, or may prohibit or restrict us from releasing properties from the lender’s lien. These provisions affect our ability to turn our investments into cash and thus affect cash available for distributions to our stockholders. Lock-out provisions could also impair our ability to take other actions during the lock-out period that could be in the best interests of our stockholders and, therefore, may have an adverse impact on the value of our shares, relative to the value that would result if the lock-out provisions did not exist. In particular, lock-out provisions could preclude us from participating in major transactions that could result in a disposition of our assets or a change in control, even though that disposition or change in control might be in the best interests of our stockholders.

We may be unable to adjust our portfolio in response to changes in economic or other conditions or sell a property if or when we decide to do so, limiting our ability to pay cash distributions to our stockholders.

Many factors that are beyond our control affect the real estate market and could affect our ability to sell properties for the price, on the terms or within the time frame that we desire. These factors include general economic conditions, the availability of financing, interest rates and other factors, including supply and demand. In addition, the holders of the Grace Preferred Equity Interests have consent rights over major actions by us relating to the Grace Portfolio, including the sale of certain hotels.

Because real estate investments are relatively illiquid, we have a limited ability to vary our portfolio in response to changes in economic or other conditions. Further, before we can sell a property on the terms we want, it may be necessary to expend funds to correct defects or to make improvements. However, we can give no assurance that we will have the funds available to correct such defects or to make such improvements. We may be unable to sell our properties at a profit. Our inability to sell properties at the time and on the terms we want could reduce our cash flow and limit our ability to make distributions to our stockholders and could reduce the value of our stockholders’ investments. Moreover, in acquiring the Grace Portfolio, we agreed to restrictions that prohibit the sale of properties at all or unless certain conditions have been met, including the maintenance of a minimum ratio of net operating income for the hotels that would continue to collateralize the Assumed Grace Indebtedness following such sale to debt outstanding on those hotels. We may agree to similar restrictions, or other restrictions, such as a limitation on the amount of debt that can be placed or repaid on a property, with respect to other properties in the future. We cannot predict the length of time needed to find a willing purchaser and to close the sale of a property. Our inability to sell a property when we desire to do so may cause us to reduce our selling price for the property. Any delay in our receipt of proceeds, or diminishment of proceeds, from the sale of a property could adversely impact our ability to pay distributions to our stockholders.

If we sell a property by providing financing to the purchaser, we will bear the risk of default by the purchaser, which could delay or reduce the distributions available to our stockholders.

If we decide to sell any of our properties, in some instances, we may sell our properties by providing financing to purchasers. When we provide financing to a purchaser, we will bear the risk that the purchaser may default, which could reduce our cash distributions to stockholders. Even in the absence of a purchaser default, the distribution of the proceeds of the sale to our stockholders, or the reinvestment of the proceeds in other assets, will be delayed until the promissory notes or other property we may accept upon a sale are actually paid, sold, refinanced or otherwise disposed. In some cases, we may receive initial down payments in cash and other property in the year of sale in an amount less than the selling price, and subsequent payments will be spread over a number of years. If any purchaser defaults under a financing arrangement with us, it could negatively impact our ability to pay cash distributions to our stockholders.

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Joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on the financial condition of co-venturers and disputes between us and our co-venturers.

We may enter into joint ventures, partnerships and other co-ownership arrangements (including preferred equity investments) for the purpose of making investments. In such event, we would not be in a position to exercise sole decision-making authority regarding the joint venture. Investments in joint ventures may, under certain circumstances, involve risks not present were a third party not involved, including the possibility that partners or co-venturers might become bankrupt or fail to fund their required capital contributions. Co-venturers may have economic or other business interests or goals which are inconsistent with our business interests or goals, and may be in a position to take actions contrary to our policies or objectives. Such investments may also have the potential risk of impasses on decisions, such as a sale, because neither we nor the co-venturer would have full control over the joint venture. In addition, to the extent our participation represents a minority interest, a majority of the participants may be able to take actions which are not in our best interests because of our lack of full control. Disputes between us and co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and/or directors from focusing their time and effort on our business. Consequently, actions by or disputes with co-venturers might result in subjecting properties owned by the joint venture to additional risk. In addition, we may in certain circumstances be liable for the actions of our co-venturers.

Covenants, conditions and restrictions may restrict our ability to operate a property, which may adversely affect our operating costs and reduce the amount of funds available to pay distributions to our stockholders.

Some of our properties may be contiguous to other parcels of real property, comprising part of the same commercial center. In connection with such properties, there are significant covenants, conditions and restrictions ("CC&Rs") restricting the operation of such properties and any improvements on such properties, and related to granting easements on such properties. Moreover, the operation and management of the contiguous properties may impact such properties. Compliance with CC&Rs may adversely affect our operating costs and reduce the amount of funds that we have available to pay distributions.

If we set aside insufficient capital reserves, we may be required to defer necessary capital improvements.

If we do not have enough reserves for capital to supply needed funds for capital improvements throughout the life of the investment in a property and there is insufficient cash available from our operations, we may be required to defer necessary improvements to a property, which may cause that property to suffer from a greater risk of obsolescence, a decline in value, or decreased cash flow. If this happens, we may not be able to maintain projected operating results for the affected properties and our results of operations may be negatively impacted. See “-Risks Related to the Grace Acquisition - To comply with brand standards under our franchise agreements, we are required to make capital expenditures, which will be substantial, pursuant to property improvement plans, and we are required to make regular deposits to partially reserve for these amounts under the Grace Indebtedness.”

Our operating expenses may increase in the future which could cause us to raise our room rates, depleting room occupancy and thereby decreasing our cash flow and our operating results.

Operating expenses, such as expenses for fuel, utilities, labor and insurance, are not fixed and may increase in the future. To the extent such increases affect our room rates and therefore our room occupancy at our lodging properties, our cash flow and operating results may be negatively affected.

Our real properties are subject to property taxes that may increase in the future, which could adversely affect our cash flow.

Our real properties are subject to real property taxes that may increase as tax rates change and as the real properties are assessed or reassessed by taxing authorities. If we fail to pay any such taxes, the applicable taxing authority may place a lien on the real property and the real property may be subject to a tax sale.

Uninsured losses relating to real property or excessively expensive premiums for insurance coverage, including due to the non-renewal of the Terrorism Risk Insurance Act of 2002, or the TRIA, could reduce our cash flows and the return on our stockholders’ investments.

There are types of losses, generally catastrophic in nature, such as losses due to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution or environmental matters, that are uninsurable or not economically insurable, or may be insured subject to limitations, such as large deductibles or co-payments. Insurance risks associated with such catastrophic events could sharply increase the premiums we pay for coverage against property and casualty claims.

This risk is particularly relevant with respect to potential acts of terrorism. The TRIA, under which the U.S. federal government bears a significant portion of insured losses caused by terrorism, will expire on December 31, 2020, and there can be no assurance that Congress will act to renew or replace the TRIA following its expiration. In the event the TRIA is not renewed or replace, terrorism insurance may become difficult or impossible to obtain at reasonable costs or at all, which may result in adverse impacts and additional costs to us.

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Changes in the cost or availability of insurance due to the non-renewal of the TRIA or for other reasons could expose us to uninsured casualty losses. If any of our properties incurs a casualty loss that is not fully insured, the value of our assets will be reduced by any such uninsured loss, which may reduce the value of our stockholders’ investments. In addition, other than any working capital reserve or other reserves we may establish, we have no source of funding to repair or reconstruct any uninsured property. Also, to the extent we must pay unexpectedly large amounts for insurance, we could suffer reduced earnings that would result in lower distributions to stockholders.

Additionally, mortgage lenders insist in some cases that commercial property owners purchase coverage against terrorism as a condition for providing mortgage loans. Accordingly, to the extent terrorism risk insurance policies are not available at reasonable costs, if at all, our ability to finance or refinance our properties could be impaired. In such instances, we may be required to provide other financial support, either through financial assurances or self-insurance, to cover potential losses. We may not have adequate, or any, coverage for such losses.

Terrorist attacks and other acts of violence, civilian unrest or war may affect the markets in which we operate, our business and our profitability.

We may acquire real estate assets located in major metropolitan areas as well as densely populated sub-markets that are susceptible to terrorist attack. In addition, any kind of terrorist activity or violent criminal acts, including terrorist acts against public institutions or buildings or modes of public transportation (including airlines, trains or buses) could have a negative effect on our business. These events may directly impact the value of our assets through damage, destruction, loss or increased security costs. Although we may obtain terrorism insurance, we may not be able to obtain sufficient coverage to fund any losses we may incur. The TRIA, which was designed for a sharing of terrorism losses between insurance companies and the federal government, will expire on December 31, 2020, and there can be no assurance that Congress will act to renew or replace it. See “-Uninsured losses relating to real property or excessively expensive premiums for insurance coverage, including due to the non-renewal of the Terrorism Risk Insurance Act of 2002, or the TRIA, could reduce our cash flows and the return on our stockholders’ investments.”

More generally, any terrorist attack, other act of violence or war, including armed conflicts, could result in increased volatility in, or damage to, the worldwide financial markets and economy. Increased economic volatility could adversely affect our hotel properties’ ability to conduct their operations profitably or our ability to borrow money or issue capital stock at acceptable prices and have a material adverse effect on our financial condition, results of operations and ability to pay distributions to our stockholders.

Competition with third parties in acquiring properties and other investments may reduce our profitability and the return on our stockholders'investment.

We compete with many other entities engaged in real estate investment activities, including individuals, corporations, bank and insurance company investment accounts, other REITs, real estate limited partnerships, and other entities engaged in real estate investment activities, many of which have greater resources than we do. Larger REITs may enjoy significant competitive advantages that result from, among other things, a lower cost of capital and enhanced operating efficiencies. In addition, the number of entities and the amount of funds competing for suitable investments may increase. Any such increase would result in increased demand for these assets and therefore increased prices paid for them. If we pay higher prices for properties and other investments, our profitability will be reduced and our stockholders may experience a lower return on their investment.

Failure to succeed in new markets or in new property classes may have adverse consequences on our performance.

We may from time to time make acquisitions outside of our existing market areas or the property classes of our primary focus if appropriate opportunities arise. The experience of affiliates of our Sponsor in our existing markets in owning and operating certain classes of property does not ensure that we will be able to operate successfully in new markets, should we choose to enter them, or that we will be successful in new property classes, should we choose to acquire them. We may be exposed to a variety of risks if we choose to enter new markets, including an inability to evaluate accurately local market conditions, to identify appropriate acquisition opportunities, or to hire and retain key personnel, and a lack of familiarity with local governmental and permitting procedures. In addition, we may abandon opportunities to enter new markets or acquire new classes of property that we have begun to explore for any reason and may, as a result, fail to recover expenses already incurred.

Acquiring or attempting to acquire multiple properties in a single transaction may adversely affect our operations.

We acquired interests in 116 hotels in one transaction when we acquired the Grace Portfolio. From time to time, we may again attempt to acquire multiple properties in a single transaction. Portfolio acquisitions are more complex and expensive than single-property acquisitions, and the risk that a multiple-property acquisition does not close may be greater than in a single-property acquisition. Portfolio acquisitions also may result in us owning investments in geographically dispersed markets, placing additional demands on our ability to manage the properties in the portfolio. In addition, a seller may require that a group of properties be purchased as a package even though we may not want to purchase one or more properties in the portfolio. In these situations, if we are unable to identify another person or entity to acquire the unwanted properties, we may be

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required to operate or attempt to dispose of these properties. We may be required to accumulate a large amount of cash in order to acquire multiple properties in a single transaction. We would expect the returns that we earn on such cash to be less than the ultimate returns in real property and therefore, accumulating such cash could reduce the funds available for distributions. Any of the foregoing events may have an adverse effect on our operations.

Our Property Manager’s, our Sub-Property Manager’s or any of our third-party sub-property manager's failure to integrate their subcontractors into their operations in an efficient manner could reduce the return on our stockholders' investment.

Our Property Manager, our Sub-Property Manager or our third-party sub-property manager may rely on multiple subcontractors for on-site property management of our properties. If our Property Manager, Sub-Property Manager and third-party sub-property manager are unable to integrate these subcontractors into their operations in an efficient manner, our Property Manager, Sub-Property Manager or third-party sub-property manager may have to expend substantial time and money coordinating with these subcontractors, which could have a negative impact on the revenues generated from such properties.

Discovery of previously undetected environmentally hazardous conditions may adversely affect our operating results.

Under various federal, state and local environmental laws, ordinances and regulations (including those of foreign jurisdictions), a current or previous owner or operator of real property may be liable for the cost of removal or remediation of hazardous or toxic substances on, under or in such property. The costs of removal or remediation could be substantial. Such laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. Environmental laws also may impose restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures. Environmental laws provide for sanctions for noncompliance and may be enforced by governmental agencies or, in certain circumstances, by private parties. Certain environmental laws and common law principles could be used to impose liability for release of and exposure to hazardous substances, including asbestos-containing materials into the air, and third parties may seek recovery from owners or operators of real properties for personal injury or property damage associated with exposure to released hazardous substances.

In addition, when excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants. Concern about indoor exposure to mold has been increasing, as exposure to mold may cause a variety of adverse health effects and symptoms, including allergic or other reactions. As a result, the presence of significant mold at any of our projects could require us to undertake a costly remediation program to contain or remove the mold from the affected property, which would adversely affect our operating results.

The cost of defending against claims of liability, of compliance with environmental regulatory requirements, of remediating any contaminated property, or of paying personal injury claims could materially adversely affect our business, assets or results of operations and, consequently, amounts available for distribution to our stockholders.

Environmental laws also may impose liens on property or restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures or prevent us, our Property Manager, or our Sub-Property Manager and any third party sub-property manager from operating such properties. Some of these laws and regulations have been amended so as to require compliance with new or more stringent standards as of future dates. Compliance with new or more stringent laws or regulations or stricter interpretation of existing laws may require us to incur material expenditures. Future laws, ordinances or regulations may impose material environmental liability.

Costs associated with complying with the Americans with Disabilities Act of 1990 may decrease cash available for distributions.

Our properties may be subject to the Americans with Disabilities Act of 1990, as amended (the "Disabilities Act"). Under the Disabilities Act, all places of public accommodation are required to comply with federal requirements related to access and use by disabled persons. The Disabilities Act has separate compliance requirements for “public accommodations” and “commercial facilities” that generally require that buildings and services be made accessible and available to people with disabilities. The Disabilities Act’s requirements could require removal of access barriers and could result in the imposition of injunctive relief, monetary penalties or, in some cases, an award of damages. We will attempt to acquire properties that comply with the Disabilities Act or place the burden on the seller or other third party to ensure compliance with the Disabilities Act. We cannot assure our stockholders that we will be able to acquire properties or allocate responsibilities in this manner. Any of our funds used for Disabilities Act compliance will reduce our net income and the amount of cash available for distributions to our stockholders.

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Our business and operations would suffer in the event of system failures.

Despite system redundancy, the implementation of security measures and the existence of a disaster recovery plan for our internal information technology systems, our systems are vulnerable to damages from any number of sources, including computer viruses, unauthorized access, energy blackouts, natural disasters, terrorism, war and telecommunication failures. Any system failure or accident that causes interruptions in our operations could results in a material disruption to our business. We may also incur additional costs to remedy damages caused by such disruptions.

The occurrence of cyber incidents, or a deficiency in our cybersecurity, could negatively impact our business by causing a disruption to our operations, a compromise of corruption of our confidential information, and/or damages to our business relationships, all of which could negatively impact our financial results.

A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of our information resources. More specifically, a cyber incident is an intentional attack or an unintentional event that can include gaining unauthorized access to systems to disrupt operations, corrupt data or steal confidential information. As our reliance on technology has increased, so have the risks posed to our systems, both internal and those we have outsourced. In addition, the risk of a cyber incident, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and instructions from around the world have increased.

Our remediation costs and lost revenues could be significant if we fall victim to a cyber incident. We may be required to expend significant resources to repair system damage, protect against the threat of future security breaches or to alleviate problems, including reputational harm, loss of revenues and litigation, caused by any breaches. Security breaches could also result in and could subject us to significant liability or loss that may not be covered by insurance, damage to our reputation, or a loss of confidence in our security measures, which could harm our business. We also may be found liable for any stolen assets or misappropriated confidential information. Although we intend to continue to implement industry-standard security measures, there can be no assurance that those measures will be sufficient.

The failure of any bank in which we deposit our funds could reduce the amount of cash we have available to pay distributions and make additional investments.

We intend to diversify our cash and cash equivalents among several banking institutions in an attempt to minimize exposure to any one of these entities. However, the Federal Deposit Insurance Corporation ("FDIC"), only insures amounts up to $250,000 per depositor per insured bank. We expect to have cash and cash equivalents and restricted cash deposited in certain financial institutions in excess of federally insured levels. If any of the banking institutions in which we have deposited funds ultimately fails, we may lose our deposits over $250,000. The loss of our deposits could reduce the amount of cash we have available to distribute or invest and could result in a decline in the value of our stockholders’ investments.

Lodging Industry Risks

The hotel industry is very competitive and seasonal and has been affected by economic slowdowns, terrorist attacks and other world events.

The hotel industry is intensely competitive and seasonal in nature and has been affected by the recent economic slowdown, terrorist attacks, military activity in the Middle East, natural disasters and other world events impacting the global economy and the travel and hotel industries, and, as a result, our lodging properties may be adversely affected. Since the hotel industry is intensely competitive, our Property Manager and our Sub-Property Manager may be unable to compete successfully. Additionally, if our competitors’ marketing strategies are more effective, our results of operations, financial condition and cash flows, including our ability to service debt and to make distributions to our stockholders, may be adversely affected. Our lodging properties may continue to be affected by such events, including our hotel occupancy levels and average daily rates, and, as a result, our revenues may decrease or not increase to levels we expect.

Since we do not intend to operate our lodging properties, our revenues depend on the ability of our Property Manager, our Sub-Property Manager and our third-party sub-property managers to compete successfully with other hotels. Some of our competitors may have substantially greater marketing and financial resources than we do. If our Property Manager, Sub-Property Manager or third-party sub-property managers are unable to compete successfully or if our competitors’ marketing strategies are effective, our results of operations, financial condition, ability to service debt and ability to make distributions to our stockholders may be adversely affected.

In addition, the seasonality of the hotel industry can be expected to cause quarterly fluctuations in our revenues and also may be adversely affected by factors outside our control, such as extreme or unexpectedly mild weather conditions or natural disasters, terrorist attacks or alerts, outbreaks of contagious diseases, airline strikes, economic factors and other considerations affecting travel. To the extent that cash flows from operations are insufficient during any quarter, due to temporary or seasonal fluctuations in revenues, we may attempt to borrow in order to make distributions to our stockholders or be required to reduce other expenditures or distributions to stockholders.

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Our hotels are subject to all the risks common to the hotel industry and subject to market conditions that affect all hotel properties.

All of the properties we own are hotels, subject to all the risks of the hotel industry. Adverse trends in the hotel industry could adversely affect hotel occupancy and the rates that can be charged for hotel rooms as well as hotel operating expenses, and generally include:

• increases in supply of hotel rooms that exceed increases in demand;

• increases in energy costs and other travel expenses that reduce business and leisure travel;

• reduced business and leisure travel due to continued geo-political uncertainty, including terrorism;

• reduced business and leisure travel from other countries to the United States, where all of our hotels are located, due to the strength of the U.S. dollar as compared to the currencies of other countries;

• adverse effects of declines in general and local economic activity;

• adverse effects of a downturn in the hotel industry; and

• risks generally associated with the ownership of hotels and real estate, as discussed below.

We do not have control over the market and business conditions that affect the value of our lodging properties, and adverse changes with respect to such conditions could have an adverse effect on our results of operations, financial condition and cash flows. Hotel properties are subject to varying degrees of risk generally common to the ownership of hotels, many of which are beyond our control, including the following:

• increased competition from other existing hotels in our markets;

• new hotels entering our markets, which may adversely affect the occupancy levels and average daily rates of our lodging properties;

• declines in business and leisure travel;

• increases in energy costs, increased threat of terrorism, terrorist events, airline strikes or other factors that may affect travel patterns and reduce the number of business and leisure travelers;

• increases in operating costs due to inflation and other factors that may not be offset by increased room rates;

• unavailability of labor;

• changes in, and the related costs of compliance with, governmental laws and regulations, fiscal policies and zoning ordinances;

• inability to adapt to dominant trends in the hotel industry or introduce new concepts and products that take advantage of opportunities created by changing consumer spending patterns and demographics; and

• adverse effects of international, national, regional and local economic and market conditions.

Adverse changes in any or all of these factors could have an adverse effect on our results of operations, financial condition and cash flows, thereby adversely impacting our ability to service debt and to make distributions to our stockholders.

As a REIT, we cannot directly operate our lodging properties, which could adversely affect our results of operations, financial condition and our cash flows, which could impact our ability to service debt and make distributions to our stockholders.

We cannot and do not directly operate our lodging properties and, as a result, our results of operations, financial position, ability to service debt and our ability to make distributions to stockholders are dependent on the ability of our Property Manager, Sub-Property Manager, and third-party sub-property managers, to operate our hotel properties successfully. In order for us to satisfy certain REIT qualification rules, we cannot directly operate any lodging properties we may acquire or actively participate in the decisions affecting their daily operations. Instead, through a TRS, we enter into property management agreements with our Property Manager, which, in turn, enters into sub-property management agreements with a third-party management company, which includes our Sub-Property Manager, or we lease our lodging properties to third-party tenants on a triple net lease basis. We cannot and will not control any such third-party management company or tenants who operate and are responsible for maintenance and other day to day management of our lodging properties, including, but not limited to, the implementation of significant operating decisions. Thus, even if we believe our lodging properties are being operated inefficiently or in a manner that does not result in satisfactory operating results, we may not be able to require the third-party management company or the tenants to change their method of operation of our lodging properties. Our results of operations, financial position, cash flows and our ability to service debt and to make distributions to stockholders are, therefore, dependent on the ability of our Sub-Property Manager and other third-party sub-property managers to operate our lodging properties successfully. Any negative publicity or other adverse developments that affect that operator and/or its affiliated brands generally

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may adversely affect our results of operations, financial condition, and consequently cash flows, thereby impacting our ability to service debt, and to make distributions to our stockholders. There can be no assurance that an affiliate of ours will continue to manage any lodging properties we acquire.

We rely on our Sub-Property Manager, and third-party sub-property managers, to establish and maintain adequate internal controls over financial reporting at our lodging properties. In doing so, our Sub-Property Manager and any third-party sub-property managers should have policies and procedures in place that allow it to effectively monitor and report to us the operating results of our lodging properties which ultimately are included in our consolidated financial statements. Because the operations of our lodging properties ultimately become a component of our consolidated financial statements, we evaluate the effectiveness of the internal controls over financial reporting at all our properties, including our lodging properties, in connection with the certifications we provide in our quarterly and annual reports on Form 10-Q and Form 10-K, respectively, pursuant to the Sarbanes-Oxley Act of 2002. If such controls are not effective, the accuracy of the results of our operations that we report could be affected. Accordingly, our ability to conclude that, as a company, our internal controls are effective is significantly dependent upon the effectiveness of internal controls that our Sub-Property Manager and third-party sub-property managers will implement at our lodging properties. It is possible that we could have a significant deficiency or material weakness as a result of the ineffectiveness of the internal controls at one or more of our lodging properties.

If we replace our Sub-Property Manager or terminate any third-party sub-property manager, we may be required by the terms of the relevant management agreement or lease to pay substantial termination fees, and we may experience significant disruptions at the affected lodging properties. We may not be able to make arrangements with a third-party management company with substantial prior lodging experience in the future. If we experience such disruptions, it may adversely affect our results of operations, financial condition and our cash flows, including our ability to service debt and to make distributions to our stockholders.

Our use of the TRS structure increases our expenses.

A TRS structure subjects us to the risk of increased lodging operating expenses. The performance of our TRS will be based on the operations of our lodging properties. Our operating risks include not only changes in hotel revenues and changes to our TRS’ ability to pay the rent due to us under the leases, but also increased hotel operating expenses, including, but not limited to, the following cost elements:

• wage and benefit costs;

• repair and maintenance expenses;

• energy costs;

• property taxes;

• insurance costs; and

• other operating expenses.

Any increases in one or more these operating expenses could have a significant adverse impact on our results of operations, cash flows and financial position.

Funds spent to maintain licensed brand standards or the loss of a brand license would adversely affect our financial condition and results of operations.

All but one of our hotels operate under licensed brands pursuant to franchise agreements with hotel brand companies. We anticipate that the hotels we acquire in the future also will operate under licensed brands.

The maintenance of the brand licenses for our hotels is subject to the hotel brand companies’ operating standards and other terms and conditions. Hotel brand companies periodically inspect our hotels to ensure that we and our taxable REIT subsidiaries and our Sub-Property Manager and third-party sub-property managers follow their standards. Failure by us, our taxable REIT subsidiaries, our Sub-Property Manager or a third-party sub-property manager to maintain these standards or other terms and conditions could result in a brand license being terminated. If a franchise agreement terminates due to our failure to make required improvements or to otherwise comply with its terms, we may also be liable to the hotel brand company for a termination payment, which will vary by hotel brand company and by hotel. As a condition of our continued holding of a brand license, a hotel brand company could also possibly require us to make capital expenditures, even if we do not believe the capital improvements are necessary or desirable or will result in an acceptable return on our investment. Nonetheless, we may risk losing a brand license if we do not make hotel brand company-required capital expenditures.

If we were to lose a brand license, we would be required to re-brand the affected hotel(s). As a result, the underlying value of a particular hotel could decline significantly from the loss of associated name recognition, marketing support, participation in guest loyalty programs and the centralized system provided by the franchisor, which could require us to recognize an impairment on the hotel. Furthermore, the loss of a franchise license at a particular hotel could harm our relationship with the

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hotel brand company, which could impede our ability to operate other hotels under the same brand, limit our ability to obtain new franchise licenses from the franchisor in the future on favorable terms, or at all, and cause us to incur significant costs to obtain a new franchise license for the particular hotel (including a likely requirement of a property improvement plan for the new brand, a portion of the costs of which would be related solely to the change in brand rather than substantively improving the property). Moreover, the loss of a franchise license could also be an event of default under the Grace Indebtedness if we are unable to find a suitable replacement. Accordingly, if we lose one or more franchise licenses, we could be materially and adversely affected.

Restrictive covenants and other provisions in franchise agreements could preclude us from taking actions with respect to the sale, refinancing or rebranding of a hotel that would otherwise be in our best interest.

Our franchise agreements are long-terms agreements with general prohibitions against or prohibitive payments for early termination and generally contain restrictive covenants and other provisions that do not provide us with flexibility to sell, refinance or rebrand a hotel without the consent of the franchisor. For example, the terms of some of these agreements may restrict our ability to sell a hotel unless the purchaser is not a competitor of the franchisor, enters into a replacement franchise agreement and meets specified other conditions. In addition, our franchise agreements restrict our ability to rebrand particular hotels without the consent of the franchisor, which could result in significant operational disruptions and litigation if we do not obtain the consent. We could be forced to pay consent or termination fees to franchisors (or litigate with them) under these agreements as a condition to changing franchise brands of our hotels (or, with respect to our affiliated sub-manager, changing management), and these fees could deter us from taking actions that would otherwise be in our best interest or could cause us to incur substantial expense. In addition, our lenders under the Grace Indebtedness generally must consent before we modify hotel management agreements or franchise agreements. Any default under a franchise agreement could also be a default under the Grace Indebtedness.

There are risks associated with employing hotel employees.

We are generally subject to risks associated with the employment of hotel employees. The lodging properties we acquire are leased to one or more TRSs, which enter into property management agreements with our Property Manager, which, in turn, enters into sub-property management agreements with our Sub-Property Manager or a third-party sub-property manager to operate the properties that we do not lease to a third party under a net lease. Hotel operating revenues and expenses for these properties are included in our consolidated results of operations. As a result, although we do not directly employ or manage the labor force at our lodging properties, we are subject to many of the costs and risks generally associated with the hotel labor force. Our Sub-Property Manager or our third-party sub-property manager is responsible for hiring and maintaining the labor force at each of our lodging properties and for establishing and maintaining the appropriate processes and controls over such activities. From time to time, the operations of our lodging properties may be disrupted through strikes, public demonstrations or other labor actions and related publicity. We may also incur increased legal costs and indirect labor costs as a result of the aforementioned disruptions, or contract disputes or other events. Our third-party sub-property managers may be targeted by union actions or adversely impacted by the disruption caused by organizing activities. Significant adverse disruptions caused by union activities or increased costs affiliated with such activities could materially and adversely affect our results of operations, financial condition and our cash flows, including our ability to service debt and make distributions to our stockholders.

The expanding use of Internet travel websites by customers can adversely affect our profitability.

The increasing use of Internet travel intermediaries by consumers may experience fluctuations in operating performance during the year and otherwise adversely affect our profitability and cash flows. Our Sub-Property Manager and our third-party sub-property managers will rely upon Internet travel intermediaries such as Travelocity.com, Expedia.com, Orbitz.com, Hotels.com and Priceline.com to generate demand for our lodging properties. As Internet bookings increase, these intermediaries may be able to obtain higher commissions, reduced room rates or other significant contract concessions from our Sub-Property Manager or our third-party sub-property managers. Moreover, some of these Internet travel intermediaries are attempting to offer hotel rooms as a commodity, by increasing the importance of price and general indicators of quality (such as “three-star downtown hotel”) at the expense of brand identification. Consumers may eventually develop brand loyalties to their reservations system rather than to our Sub-Property Manager or our third-party sub-property managers or our brands, which could have an adverse effect on our business because we rely heavily on brand identification. If the amount of sales made through Internet intermediaries increases significantly and our Sub-Property Manager or our third-party sub-property managers fail to appropriately price room inventory in a manner that maximizes the opportunity for enhanced profit margins, room revenues may flatten or decrease and our profitability may be adversely affected.

Our lack of diversification in property type and hotel brands increases the risk of investment.

There is no limit on the number of properties of a particular hotel brand that we may acquire. Following the completion of our acquisition of the Grace Portfolio, based on the number of hotels, 47.5% of our hotels are franchised with Hilton Worldwide, 36.9% with Marriott International and 12.3% with Hyatt Hotels Corporation, and no other brand accounts for more

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than 5.0% of our hotels. The risks of brand concentration include reductions in business following negative publicity relating to one of our licensed brands or arising from or after a dispute with a hotel brand company.

To the extent our assets are geographically concentrated, an economic downturn in one or more of the markets in which we have invested could have an adverse effect on our results of operations, financial condition and ability to pay distributions.

Our board of directors reviews our properties and investments in terms of geographic and hotel brand diversification, and any failure to remain diversified could adversely affect our results of operations.

Risks Associated with Debt Financing

We have incurred substantial indebtedness, and high levels of debt could hinder our ability to make distributions and could decrease the value of our stockholders' investment.

We have incurred substantial indebtedness in acquiring the properties we currently own, and substantially all of these real properties have been pledged as security under our indebtedness. See “-Risks Related to the Grace Acquisition - As a result of the additional indebtedness incurred and the issuance of the preferred equity interests to acquire the Grace Portfolio, we may experience a potential material adverse effect on our financial condition and results of operations.”

Prior to our entry into an agreement to acquire the Grace Portfolio in May 2014, a majority of our independent directors waived the total portfolio leverage requirement of our charter with respect to the acquisition of the Grace Portfolio should such total portfolio leverage exceed 300% of our total "net assets" (as defined in our charter) upon closing of the acquisition of the Grace Portfolio. Following the acquisition of the Grace Portfolio in February 2015, our total portfolio leverage (which includes the Grace Preferred Equity Interests) significantly exceeded this 300% limit, and we expect it will continue to do so for some time. Accordingly, we intend to use substantially all available offering proceeds following the acquisition of the Grace Portfolio to reduce our borrowings to our intended limit, which is below the 300% maximum limit. See “-Risks Related to the Grace Acquisition - We intend to use substantially all available offering proceeds following the acquisition of the Grace Portfolio to reduce our borrowings to our intended limit, which may limit our ability to pay distributions or acquire additional properties for some time.”

High debt levels will cause us to incur higher interest charges, will result in higher debt service payments and are accompanied by restrictive covenants. These factors could limit the amount of cash we have available to distribute and could result in a decline in the value of our stockholders' investment in our common stock. If there is a shortfall between the cash flow from a property and the cash flow needed to service mortgage debt on a property, then the amount available for distributions to stockholders may be reduced. In addition, incurring mortgage debt increases the risk of loss since defaults on indebtedness secured by a property may result in lenders initiating foreclosure actions. In that case, we could lose the property or properties securing the loan that is in default, thus reducing the value of our stockholders' investment. For U.S. federal income tax purposes, a foreclosure of any of our properties would be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage. If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure, but would not receive any cash proceeds. In such event, we may be unable to pay the amount of distributions required in order to maintain our REIT status. We may give full or partial guarantees to lenders of mortgage debt to the entities that own our properties. When we provide a guaranty on behalf of an entity that owns one of our properties, we will be responsible to the lender for satisfaction of the debt if it is not paid by such entity. All of our mortgages to date contain cross-collateralization or cross-default provisions, meaning that a default on a single property could affect multiple properties , and any mortgages we enter into in the future may contain cross-collateralization or cross-default provisions. If any of our properties are foreclosed upon due to a default, our ability to pay cash distributions to our stockholders will be adversely affected which could result in our losing our REIT status and would result in a decrease in the value of our stockholders' investment.

A portion of the Grace Indebtedness matures in May 2016 and a portion Matures in May 2017. We may not be able to extend the maturity date of, or refinance, the Grace Indebtedness, or any of our other indebtedness, on acceptable terms.

All but one of our properties has been pledged as security for our indebtedness, and we expect we will be required to extend or refinance this indebtedness when it comes due. The Assumed Grace Indebtedness matures on May 1, 2016, subject to three (one-year) extension rights, and the Additional Grace Mortgage Loan matures on March 6, 2017, subject to one (one-year) extension right. The extensions on the Grace Indebtedness can only occur if certain conditions are met, including, in the case of the Assumed Grace Indebtedness, a condition with respect to the second and third extension terms that a minimum ratio of net operating income to debt outstanding be satisfied, and, in the case of the Additional Grace Mortgage Loan, a condition that a minimum debt service coverage ratio and maximum loan to value ratio be satisfied. There can be no assurance that we will be able to meet these conditions and extend these loans pursuant to their terms.

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If we are not able to extend these loans or refinance them when they mature, we will be required to seek alternative financing to continue our operations. No assurance can be given that any extension, refinancing or alternative financing will be available when required or that we will be able to negotiate acceptable terms. Moreover, if interest rates are higher when these loans are refinanced or replaced with alternative financing, our cash flow would be reduced. This, in turn, would reduce cash available for distribution to our stockholders and may hinder our ability to raise more capital by issuing more stock or by borrowing more money.

Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to make distributions to our stockholders.

In connection with providing us financing, a lender could impose restrictions on us that affect our distribution and operating policies and our ability to incur additional debt. Loan documents we enter into may contain covenants that limit our ability to further mortgage the property, discontinue insurance coverage or replace our Advisor. These or other limitations, some of which are contained in the Grace Indebtedness, may adversely affect our flexibility and our ability to achieve our investment and operating objectives.

Increases in interest rates could increase the amount of our debt payments and adversely affect our ability to pay distributions to our stockholders.

We have incurred substantial indebtedness, of which $1,130.9 million outstanding as of February 27, 2015, among other things, bore interest at variable interest rates. Accordingly, increases in interest rates would increase our interest costs, which could reduce our cash flows and our ability to pay distributions to our stockholders. In addition, if we need to repay existing debt during periods of rising interest rates, we could be required to liquidate one or more of our investments in properties at times that may not permit realization of the maximum return on such investments.

We may not be able to access financing sources on attractive terms, which could adversely affect our ability to execute our

business plan.

We may finance our assets over the long-term through a variety of means, including repurchase agreements, credit facilities, issuance of commercial mortgage-backed securities, collateralized debt obligations and other structured financings. Our ability to execute this strategy will depend on various conditions in the markets for financing in this manner that are beyond our control, including lack of liquidity and greater credit spreads. We cannot be certain that these markets will remain an efficient source of long-term financing for our assets. If our strategy is not viable, we will have to find alternative forms of long-term financing for our assets, as secured revolving credit facilities and repurchase facilities may not accommodate long-term financing. This could subject us to more recourse indebtedness and the risk that debt service on less efficient forms of financing would require a larger portion of our cash flows, thereby reducing cash available for distribution to our stockholders and funds available for operations as well as for future business opportunities.

Our derivative financial instruments that we may use to hedge against interest rate fluctuations may not be successful in mitigating our risks associated with interest rates and could reduce the overall returns on our stockholders’ investments.

We may use derivative financial instruments to hedge exposures to changes in interest rates on loans secured by our assets, but no hedging strategy can protect us completely. We cannot assure our stockholders that our hedging strategy and the derivatives that we use will adequately offset the risk of interest rate volatility or that our hedging transactions will not result in losses. In addition, the use of such instruments may reduce the overall return on our investments. These instruments may also generate income that may not be treated as qualifying REIT income for purposes of the 75% gross income test or 95% gross income test.

Interest-only and adjustable rate indebtedness may increase our risk of default.

We have financed our property acquisitions using interest-only mortgage and mezzanine indebtedness and may continue to do so in the future. As of February 27, 2015, all $1.176.4 million of our mortgage and mezzanine indebtedness and $64.8 million of our other indebtedness was interest-only. During the interest-only period, which may be the full term of the loan, the amount of each scheduled payment is less than that of a traditional amortizing loan. The principal balance of the loan will not be reduced (except in the case of prepayments) because there are no scheduled monthly payments of principal during this period. After the interest-only period, we will be required either to make scheduled payments of amortized principal and interest or to make a lump-sum or “balloon” payment at maturity. These required principal or balloon payments will increase the amount of our scheduled payments and may increase our risk of default under the related loan. Our ability to make a balloon payment at maturity is uncertain and may depend upon our ability to obtain additional financing or our ability to sell the financed property. At the time the balloon payment is due, we may or may not be able to refinance the balloon payment on terms as favorable as the original loan or sell the property at a price sufficient to make the balloon payment. The effect of a refinancing or sale could affect the rate of return to our stockholders and the projected time of disposition of our assets. In addition, payments of principal and interest made to service our debts may leave us with insufficient cash to pay the

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distributions that we are required to pay to maintain our qualification as a REIT. Any of these results would have a material adverse effect on the value of an investment in our common stock.

Substantial principal or balloon maturity payments will reduce the funds available for distribution to our stockholders because cash otherwise available for distribution will be required to pay principal and interest associated with these loans.

Risks Related to Real Estate-Related Investments

Our investments in mortgage, mezzanine, bridge and other loans, as well as our investments in mortgage-backed securities, collateralized debt obligations and other debt, may be affected by unfavorable real estate market conditions, which could decrease the value of those assets and the return on our stockholders' investment.

If we make or invest in mortgage, mezzanine or other real estate-related loans, we will be at risk of defaults by the borrowers on those loans. These defaults may be caused by many conditions beyond our control, including interest rate levels and local and other economic conditions affecting real estate values. We will not know whether the values of the properties ultimately securing our loans will remain at the levels existing on the dates of origination of those loans. If the values of the underlying properties drop, our risk will increase because of the lower value of the security associated with such loans. Our investments in mortgage-backed securities, collateralized debt obligations and other real estate-related debt will be similarly affected by real estate market conditions.

If we make or invest in mortgage, mezzanine, bridge or other real estate-related loans, our loans will be subject to interest rate fluctuations that will affect our returns as compared to market interest rates; accordingly, the value of our stockholders' investment would be subject to fluctuations in interest rates.

If we make or invest in fixed-rate, long-term loans and interest rates rise, the loans could yield a return that is lower than then-current market rates. If interest rates decrease, we will be adversely affected to the extent that loans are prepaid because we may not be able to make new loans at the higher interest rate. If we invest in variable-rate loans and interest rates decrease, our revenues will also decrease. For these reasons, if we invest in mortgage, mezzanine, bridge or other real estate-related loans, our returns on those loans and the value of our stockholders' investment will be subject to fluctuations in interest rates.

We have not established investment criteria limiting geographical concentration of our mortgage investments or requiring a minimum credit quality of borrowers.

We have not established any limit upon the geographic concentration of properties securing mortgage loans acquired or originated by us, or the credit quality of borrowers of uninsured mortgage assets acquired or originated by us. As a result, properties securing our mortgage loans may be overly concentrated in certain geographic areas and the underlying borrowers of our uninsured mortgage assets may have low credit quality. We may experience losses due to geographic concentration or low credit quality.

Mortgage investments that are not United States government insured and non-investment-grade mortgage assets involve risk of loss.

We may originate and acquire uninsured and non-investment-grade mortgage loans and mortgage assets, including mezzanine loans, as part of our investment strategy. While holding these interests, we will be subject to risks of borrower defaults, bankruptcies, fraud and losses and special hazard losses that are not covered by standard hazard insurance. Also, the costs of financing the mortgage loans could exceed the return on the mortgage loans. In the event of any default under mortgage loans held by us, we will bear the risk of loss of principal and non-payment of interest and fees to the extent of any deficiency between the value of the mortgage collateral and the principal amount of the mortgage loan. To the extent we suffer such losses with respect to our investments in mortgage loans, the value of our stockholders’ investments may be adversely affected.

We may invest in non-recourse loans, which will limit our recovery to the value of the mortgaged property.

Our mortgage loan assets may be non-recourse loans. With respect to our non-recourse mortgage loan assets, in the event of a borrower default, the specific mortgaged property and other assets, if any, pledged to secure the relevant mortgage loan, may be less than the amount owed under the mortgage loan. As to those mortgage loan assets that provide for recourse against the borrower and its assets generally, we cannot assure our stockholders that the recourse will provide a recovery in respect of a defaulted mortgage loan greater than the liquidation value of the mortgaged property securing that mortgage loan.

Interest rate fluctuations will affect the value of our mortgage assets, net income and common stock.

Interest rates are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations, and other factors beyond our control. Interest rate fluctuations can adversely affect our income in many ways and present a variety of risks, including the risk of variances in the yield curve, a mismatch between asset yields and borrowing rates, and changing prepayment rates.

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Variances in the yield curve may reduce our net income. The relationship between short-term and longer-term interest rates is often referred to as the “yield curve.” Short-term interest rates are ordinarily lower than longer-term interest rates. If short-term interest rates rise disproportionately relative to longer-term interest rates (a flattening of the yield curve), our borrowing costs may increase more rapidly than the interest income earned on our assets. Because our assets may bear interest based on longer-term rates than our borrowings, a flattening of the yield curve would tend to decrease our net income and the market value of our mortgage loan assets. Additionally, to the extent cash flows from investments that return scheduled and unscheduled principal are reinvested in mortgage loans, the spread between the yields of the new investments and available borrowing rates may decline, which would likely decrease our net income. It is also possible that short-term interest rates may exceed longer-term interest rates (a yield curve inversion), in which event our borrowing costs may exceed our interest income and we could incur operating losses.

Prepayment rates on our mortgage loans may adversely affect our yields.

The value of our mortgage loan assets may be affected by prepayment rates on investments. Prepayment rates are influenced by changes in current interest rates and a variety of economic, geographic and other factors beyond our control, and consequently, such prepayment rates cannot be predicted with certainty. For investments that we acquire but do not originate, we may be unable to secure protection from prepayment in the form of prepayment lock out periods or prepayment penalties. In periods of declining mortgage interest rates, prepayments on mortgages generally increase. If general interest rates decline as well, the proceeds of such prepayments received during such periods are likely to be reinvested by us in assets yielding less than the yields on the investments that were prepaid. In addition, the market value of mortgage investments may, because of the risk of prepayment, benefit less from declining interest rates than from other fixed-income securities. Conversely, in periods of rising interest rates, prepayments on mortgages generally decrease, in which case we would not have the prepayment proceeds available to invest in assets with higher yields. Under certain interest rate and prepayment scenarios, we may fail to fully recoup our cost of acquisition of certain investments.

No assurances can be given that we can make an accurate assessment of the yield to be produced by an investment. Many factors beyond our control are likely to influence the yield on the investments, including, but not limited to, competitive conditions in the local real estate market, local and general economic conditions and the quality of management of the underlying property. Our inability to accurately assess investment yields may result in our purchasing assets that do not perform as well as expected, which may adversely affect the value of our stockholders’ investments.

Volatility of values of mortgaged properties may adversely affect our mortgage loans.

Real estate property values and net operating income derived from real estate properties are subject to volatility and may be affected adversely by a number of factors, including the risk factors described in our IPO relating to general economic conditions and owning real estate investments. In the event its net operating income decreases, a borrower may have difficulty paying our mortgage loan, which could result in losses to us. In addition, decreases in property values reduce the value of the collateral and the potential proceeds available to a borrower to repay our mortgage loans, which could also cause us to suffer losses.

Mezzanine loans involve greater risks of loss than senior loans secured by income-producing properties.

We may make and acquire mezzanine loans. These types of mortgage loans are considered to involve a higher degree of risk than long-term senior mortgage lending secured by income-producing real property due to a variety of factors, including the loan being entirely unsecured or, if secured, becoming unsecured as a result of foreclosure by the senior lender. We may not recover some or all of our investment in these loans. In addition, mezzanine loans may have higher loan-to-value ratios than conventional mortgage loans resulting in less equity in the property and increasing the risk of loss of principal.

Our investments in subordinated loans and subordinated mortgage-backed securities may be subject to losses.

We may acquire or originate subordinated loans and invest in subordinated mortgage-backed securities. In the event a borrower defaults on a subordinated loan and lacks sufficient assets to satisfy our loan, we may suffer a loss of principal or interest. In the event a borrower declares bankruptcy, we may not have full recourse to the assets of the borrower, or the assets of the borrower may not be sufficient to satisfy the loan. If a borrower defaults on our loan or on debt senior to our loan, or in the event of a borrower bankruptcy, our loan will be satisfied only after the senior debt is paid in full. Where debt senior to our loan exists, the presence of inter-creditor arrangements may limit our ability to amend our loan documents, assign our loans, accept prepayments, exercise our remedies (through “standstill periods”), and control decisions made in bankruptcy proceedings relating to borrowers.

We may invest in collateralized mortgage-backed securities("CMBS"), which may increase our exposure to credit and interest rate risk.

We may invest in CMBS, which may increase our exposure to credit and interest rate risk. We have not adopted, and do not expect to adopt, any formal policies or procedures designed to manage risks associated with our investments in CMBS. In this context, credit risk is the risk that borrowers will default on the mortgages underlying the CMBS. While we may invest in

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CMBS guaranteed by U.S. government agencies, such as the Government National Mortgage Association, or U.S. government sponsored enterprises, such as the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation, there is no guarantee that such will be available or continue to be guaranteed by the U.S. government. Interest rate risk occurs as prevailing market interest rates change relative to the current yield on the CMBS. For example, when interest rates fall, borrowers are more likely to prepay their existing mortgages to take advantage of the lower cost of financing. As prepayments occur, principal is returned to the holders of the CMBS sooner than expected, thereby lowering the effective yield on the investment. On the other hand, when interest rates rise, borrowers are more likely to maintain their existing mortgages. As a result, prepayments decrease, thereby extending the average maturity of the mortgages underlying the CMBS. If we are unable to manage these risks effectively, our results of operations, financial condition and ability to pay distributions to our stockholders will be adversely affected.

Any real estate debt security that we originate or purchase is subject to the risks of delinquency and foreclosure.

We may originate and purchase real estate debt securities, which are subject to risks of delinquency and foreclosure and risks of loss. Typically, we will not have recourse to the personal assets of our borrowers. The ability of a borrower to repay a real estate debt security secured by an income-producing property depends primarily upon the successful operation of the property, rather than upon the existence of independent income or assets of the borrower. If the net operating income of the property is reduced, the borrower’s ability to repay the real estate debt security may be impaired. A property’s net operating income can be affected by, among other things:

• increased costs, added costs imposed by franchisors for improvements or operating changes required, from time to time, under the franchise agreements;

• property management decisions;

• property location and condition;

• competition from comparable types of properties;

• changes in specific industry segments;

• declines in regional or local real estate values, or occupancy rates; and

• increases in interest rates, real estate tax rates and other operating expenses.

Any hedging strategies we utilize may not be successful in mitigating our risks.

We may enter into hedging transactions to manage risk of interest rate changes, price changes or currency fluctuations with respect to borrowings made or to be made to acquire or carry real estate assets. To the extent that we use derivative financial instruments in connection with these risks, we will be exposed to credit, basis and legal enforceability risks. Derivative financial instruments may include interest rate swap contracts, interest rate cap or floor contracts, futures or forward contracts, options or repurchase agreements. In this context, credit risk is the failure of the counterparty to perform under the terms of the derivative contract. If the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. Basis risk occurs when the index upon which the contract is based is more or less variable than the index upon which the hedged asset or liability is based, thereby making the hedge less effective. Finally, legal enforceability risks encompass general contractual risks, including the risk that the counterparty will breach the terms of, or fail to perform its obligations under, the derivative contract. If we are unable to manage these risks effectively, our results of operations, financial condition and ability to make distributions to our stockholderswill be adversely affected.

U.S. Federal Income Tax Risks

Our failure to qualify or remain qualified as a REIT would subject us to U.S. federal income tax and potentially state and local tax, and would adversely affect our operations and the market price of our common stock.

We intend to elect and qualify to be taxed as a REIT commencing with our taxable year ended December 31, 2014 and intend to operate in a manner that would allow us to continue to qualify as a REIT. However, we may terminate our REIT qualification, if our board of directors determines that not qualifying as a REIT is in our best interests, or inadvertently. Our qualification as a REIT depends upon our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis. The REIT qualification requirements are extremely complex and interpretation of the U.S. federal income tax laws governing qualification as a REIT is limited. Furthermore, any opinion of our counsel, including tax counsel, as to our eligibility to qualify or remain qualified as a REIT is not binding on the Internal Revenue Service (the "IRS") and is not a guarantee that we will qualify, or continue to qualify, as a REIT. Accordingly, we cannot be certain that we will be successful in operating so we can qualify or remain qualified as a REIT. Our ability to satisfy the asset tests depends on our analysis of the characterization and fair market values of our assets, some of which are not susceptible to a precise determination, and for which we will not obtain independent appraisals. Our compliance with the REIT income or quarterly asset requirements also depends on our ability to successfully manage the composition of our income and assets on an ongoing basis. Accordingly, if certain of our operations were to be recharacterized by the IRS, such

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recharacterization would jeopardize our ability to satisfy all requirements for qualification as a REIT. Furthermore, future legislative, judicial or administrative changes to the U.S. federal income tax laws could be applied retroactively, which could result in our disqualification as a REIT.

If we fail to qualify as a REIT for any taxable year, and we do not qualify for certain statutory relief provisions, we will be subject to U.S. federal income tax on our taxable income at corporate rates. In addition, we would generally be disqualified from treatment as a REIT for the four taxable years following the year of losing our REIT qualification. Losing our REIT qualification would reduce our net earnings available for investment or distribution to stockholders because of the additional tax liability. In addition, distributions to stockholders would no longer qualify for the dividends paid deduction, and we would no longer be required to make distributions. If this occurs, we might be required to borrow funds or liquidate some investments in order to pay the applicable tax.

Even if we qualify as a REIT, in certain circumstances, we may incur tax liabilities that would reduce our cash available for distribution to our stockholders.

Even if we qualify and maintain our status as a REIT, we may be subject to U.S. federal, state and local income taxes. For example, net income from the sale of properties that are “dealer” properties sold by a REIT (a “prohibited transaction” under the Code) will be subject to a 100% tax. We may not make sufficient distributions to avoid excise taxes applicable to REITs. Similarly, if we were to fail an income test (and did not lose our REIT status because such failure was due to reasonable cause and not willful neglect) we would be subject to tax on income that does not meet the income test requirements. We also may decide to retain net capital gains we earn from the sale or other disposition of our property and pay U.S. federal income tax directly on such income. In that event, our stockholders would be treated as if they earned that income and paid the tax on it directly. However, stockholders that are tax-exempt, such as charities or qualified pension plans, would have no benefit from their deemed payment of such tax liability unless they file U.S. federal income tax returns and thereon seek a refund of such tax. We also will be subject to corporate tax on any undistributed REIT taxable income. We also will be subject to corporate tax on any undistributed REIT taxable income. We also may be subject to state and local taxes on our income or property, including franchise, payroll and transfer taxes, either directly or at the level of our Operating Partnership or at the level of the other companies through which we indirectly own our assets, such as our TRSs, which are subject to full U.S. federal, state, local and foreign corporate-level income taxes. Any taxes we pay directly or indirectly will reduce our cash available for distribution to our stockholders.

To qualify as a REIT we must meet annual distribution requirements, which may force us to forgo otherwise attractive opportunities or borrow funds during unfavorable market conditions. This could delay or hinder our ability to meet our investment objectives and reduce our stockholders'overall return.

In order to qualify as a REIT, we must distribute annually to our stockholders at least 90% of our REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding any net capital gain. We will be subject to U.S. federal income tax on our undistributed REIT taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which distributions we pay with respect to any calendar year are less than the sum of (a) 85% of our ordinary income, (b) 95% of our capital gain net income and (c) 100% of our undistributed income from prior years. These requirements could cause us to distribute amounts that otherwise would be spent on investments in real estate assets and it is possible that we might be required to borrow funds, possibly at unfavorable rates, or sell assets to fund these distributions. Although we intend to make distributions sufficient to meet the annual distribution requirements and to avoid U.S. federal income and excise taxes on our earnings while we qualify as a REIT, it is possible that we might not always be able to do so.

Certain of our business activities are potentially subject to the prohibited transaction tax, which could reduce the return on our stockholders' investment.

For so long as we qualify as a REIT, our ability to dispose of property during the first few years following acquisition may be restricted to a substantial extent as a result of our REIT qualification. Under applicable provisions of the Code regarding prohibited transactions by REITs, while we qualify as a REIT, we will be subject to a 100% penalty tax on any gain recognized on the sale or other disposition of any property (other than foreclosure property) that we own, directly or indirectly through any subsidiary entity, including our Operating Partnership, but generally excluding TRSs, that is deemed to be inventory or property held primarily for sale to customers in the ordinary course of a trade or business. Whether property is inventory or otherwise held primarily for sale to customers in the ordinary course of a trade or business depends on the particular facts and circumstances surrounding each property. During such time as we qualify as a REIT, we intend to avoid the 100% prohibited transaction tax by (a) conducting activities that may otherwise be considered prohibited transactions through a TRS (but such TRS will incur corporate rate income taxes with respect to any income or gain recognized by it), (b) conducting our operations in such a manner so that no sale or other disposition of an asset we own, directly or through any subsidiary, will be treated as a prohibited transaction, or (c) structuring certain dispositions of our properties to comply with the requirements of the prohibited transaction safe harbor available under the Code for properties that, among other requirements, have been held for at least two years. No assurance can be given that any particular property we own, directly or through any subsidiary entity, including our

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Operating Partnership, but generally excluding TRSs, will not be treated as inventory or property held primarily for sale to customers in the ordinary course of a trade or business.

Our TRSs are subject to corporate-level taxes and our dealings with our TRSs may be subject to 100% excise tax.

A REIT may own up to 100% of the stock of one or more TRSs. Both the subsidiary and the REIT must jointly elect to treat the subsidiary as a TRS. A corporation of which a TRS directly or indirectly owns more than 35% of the voting power or value of the stock will automatically be treated as a TRS. Overall, no more than 25% of the gross value of a REIT’s assets may consist of stock or securities of one or more TRSs. In addition, TRS rules limit the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation. The rules, which are applicable to us as a REIT, also impose a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis.

A TRS may hold assets and earn income that would not be qualifying assets or income if held or earned directly by a REIT, including gross income from operations pursuant to management contracts. We must operate our “qualified lodging facilities” through one or more TRSs that leases such properties from us. We may use our TRSs generally for other activities as well, such as to hold properties for sale in the ordinary course of a trade or business or to hold assets or conduct activities that we cannot conduct directly as a REIT.

Our hotels are leased to a TRS which is owned by the OP.  Such TRS and other TRSs that we may form will be subject to applicable U.S. federal, state, local and foreign income tax on their taxable income. While we will be monitoring the aggregate value of the securities of our TRSs and intend to conduct our affairs so that such securities will represent less than 25% of the value of our total assets, there can be no assurance that we will be able to comply with the TRS limitation in all market conditions.

If our leases to our TRSs are not respected as true leases for U.S. federal income tax purposes, we would fail to qualify as a REIT.

To qualify as a REIT, we must satisfy two gross income tests, under which specified percentages of our gross income must be derived from certain sources, such as "rents from real property." In order for such rent to qualify as "rents from real property" for purposes of the REIT gross income tests, the leases must be respected as true leases for U.S. federal income tax purposes and not be treated as service contracts, joint ventures or some other type of arrangement. If our leases are not respected as true leases for U.S. federal income tax purposes, we would fail to qualify as a REIT.

If our Operating Partnership failed to qualify as a partnership or is not otherwise disregarded for U.S. federal income tax purposes, we would cease to qualify as a REIT.

If the IRS were to successfully challenge the status of our Operating Partnership as a partnership or disregarded entity for such purposes, it would be taxable as a corporation. In such event, this would reduce the amount of distributions that our Operating Partnership could make to us. This would result in our failing to qualify as a REIT, and becoming subject to corporate level tax on our income. This substantially would reduce our cash available to pay distributions and the yield on our stockholders' investment. In addition, if any of the partnerships or limited liability companies through which our Operating Partnership owns its properties, in whole or in part, loses its characterization as a partnership and is otherwise not disregarded for U.S. federal income tax purposes, it would be subject to taxation as a corporation, thereby reducing distributions to our Operating Partnership. Such a recharacterization of an underlying property owner could also threaten our ability to maintain our REIT qualification.

If our “qualified lodging facilities” are not properly leased to a TRS or the managers of such “qualified lodging facilities” do not qualify as “eligible independent contractors,” we could fail to qualify as a REIT.

In general, we cannot operate any lodging facilities and can only indirectly participate in the operation of “qualified lodging facilities” on an after-tax basis through leases of such properties to our TRSs. A “qualified lodging facility” is a hotel, motel, or other establishment in which more than one-half of the dwelling units are used on a transient basis at which or in connection with which wagering activities are not conducted. Rent paid by a lessee that is a “related party tenant” of ours will not be qualifying income for purposes of the two gross income tests applicable to REITs. A TRS that leases lodging facilities from us will not be treated as a “related party tenant” with respect to our lodging facilities that are managed by an independent management company, so long as the independent management company qualifies as an “eligible independent contractor.”

Each of the management companies that enters into a management contract with our TRSs must qualify as an “eligible independent contractor” under the REIT rules in order for the rent paid to us by our TRSs to be qualifying income for purposes of the REIT gross income tests. An “eligible independent contractor” is an independent contractor that, at the time such contractor enters into a management or other agreement with a TRS to operate a “qualified lodging facility,” is actively engaged in the trade or business of operating “qualified lodging facilities” for any person not related, as defined in the Code, to us or the TRS. Among other requirements, in order to qualify as an independent contractor a manager must not own, directly or applying attribution provisions of the Code, more than 35% of our outstanding shares of stock (by value), and no person or group of

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persons can own more than 35% of our outstanding shares and 35% of the ownership interests of the manager (taking into account only owners of more than 5% of our shares and, with respect to ownership interest in such managers that are publicly traded, only holders of more than 5% of such ownership interests). The ownership attribution rules that apply for purposes of the 35% thresholds are complex. There can be no assurance that the levels of ownership of our stock by our managers and their owners will not be exceeded.

Our investments in certain debt instruments may cause us to recognize income for U.S. federal income tax purposes even though no cash payments have been received on the debt instruments, and certain modifications of such debt by us could cause the modified debt to not qualify as a good REIT asset, thereby jeopardizing our REIT qualification.

Our taxable income may substantially exceed our net income as determined based on GAAP, or differences in timing between the recognition of taxable income and the actual receipt of cash may occur. For example, we may acquire assets, including debt securities requiring us to accrue original issue discount ("OID"), or recognize market discount income, that generate taxable income in excess of economic income or in advance of the corresponding cash flow from the assets. In addition, if a borrower with respect to a particular debt instrument encounters financial difficulty rendering it unable to pay stated interest as due, we may nonetheless be required to continue to recognize the unpaid interest as taxable income with the effect that we will recognize income but will not have a corresponding amount of cash available for distribution to our stockholders.

As a result of the foregoing, we may generate less cash flow than taxable income in a particular year and find it difficult or impossible to meet the REIT distribution requirements in certain circumstances. In such circumstances, we may be required to (a) sell assets in adverse market conditions, (b) borrow on unfavorable terms, (c) distribute amounts that would otherwise be used for future acquisitions or used to repay debt, or (d) make a taxable distribution of our shares of common stock as part of a distribution in which stockholders may elect to receive shares of common stock or (subject to a limit measured as a percentage of the total distribution) cash, in order to comply with the REIT distribution requirements.

Moreover, we may acquire distressed debt investments that require subsequent modification by agreement with the borrower. If the amendments to the outstanding debt are “significant modifications” under the applicable Treasury Regulations, the modified debt may be considered to have been reissued to us in a debt-for-debt taxable exchange with the borrower. This deemed reissuance may prevent the modified debt from qualifying as a good REIT asset if the underlying security has declined in value and would cause us to recognize income to the extent the principal amount of the modified debt exceeds our adjusted tax basis in the unmodified debt.

The failure of a mezzanine loan to qualify as a real estate asset would adversely affect our ability to qualify as a REIT.

In general, in order for a loan to be treated as a qualifying real estate asset producing qualifying income for purposes of the REIT asset and income tests, the loan must be secured by real property. We may acquire mezzanine loans that are not directly secured by real property but instead secured by equity interests in a partnership or limited liability company that directly or indirectly owns real property. In Revenue Procedure 2003-65, the IRS provided a safe harbor pursuant to which a mezzanine loan that is not secured by real estate would, if it meets each of the requirements contained in the Revenue Procedure, be treated by the IRS as a qualifying real estate asset. Although the Revenue Procedure provides a safe harbor on which taxpayers may rely, it does not prescribe rules of substantive tax law and in many cases it may not be possible for us to meet all the requirements of the safe harbor. We cannot provide assurance that any mezzanine loan in which we invest would be treated as a qualifying asset producing qualifying income for REIT qualification purposes. If any such loan fails either the REIT income or asset tests, we may be disqualified as a REIT.

We may choose to make distributions in our own stock, in which case our stockholders may be required to pay U.S. federal income taxes in excess of the cash dividends they receive.

In connection with our qualification as a REIT, we are required to distribute annually to our stockholders at least 90% of our REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding net capital gain. In order to satisfy this requirement, we may make distributions that are payable in cash and/or shares of our common stock (which could account for up to 80% of the aggregate amount of such distributions) at the election of each stockholder. Taxable stockholders receiving such distributions will be required to include the full amount of such distributions as ordinary dividend income to the extent of our current or accumulated earnings and profits, as determined for U.S. federal income tax purposes. As a result, U.S. stockholders may be required to pay U.S. federal income taxes with respect to such distributions in excess of the cash portion of the distribution received. Accordingly, U.S. stockholders receiving a distribution of our shares may be required to sell shares received in such distribution or may be required to sell other stock or assets owned by them, at a time that may be disadvantageous, in order to satisfy any tax imposed on such distribution. If a U.S. stockholder sells the stock that it receives as part of the distribution in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the distribution, depending on the market price of our stock at the time of the sale. Furthermore, with respect to certain non-U.S. stockholders, we may be required to withhold U.S. tax with respect to such distribution, including in respect of all or a portion of such

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distribution that is payable in stock, by withholding or disposing of part of the shares included in such distribution and using the proceeds of such disposition to satisfy the withholding tax imposed. In addition, if a significant number of our stockholders determine to sell shares of our common stock in order to pay taxes owed on dividend income, such sale may put downward pressure on the market price of our common stock.

Various tax aspects of such a taxable cash/stock distribution are uncertain and have not yet been addressed by the IRS. No assurance can be given that the IRS will not impose requirements in the future with respect to taxable cash/stock distributions, including on a retroactive basis, or assert that the requirements for such taxable cash/stock distributions have not been met.

The taxation of distributions to our stockholders can be complex; however, distributions that we make to our stockholders generally will be taxable as ordinary income, which may reduce their anticipated return from an investment in us.

Distributions that we make to our taxable stockholders out of current and accumulated earnings and profits (and not designated as capital gain dividends or qualified dividend income) generally will be taxable as ordinary income. However, a portion of our distributions may (a) be designated by us as capital gain dividends generally taxable as long-term capital gain to the extent that they are attributable to net capital gain recognized by us, (b) be designated by us as qualified dividend income generally to the extent they are attributable to dividends we receive from our TRSs, or (c) constitute a return of capital generally to the extent that they exceed our accumulated earnings and profits as determined for U.S. federal income tax purposes. A return of capital is not taxable, but has the effect of reducing the basis of a stockholder’s investment in our common stock.

Our stockholders may have tax liability on distributions that they elect to reinvest in common stock, but they would not receive the cash from such distributions to pay such tax liability.

If our stockholders participate in our DRIP, they will be deemed to have received, and for U.S. federal income tax purposes will be taxed on, the amount reinvested in shares of our common stock to the extent the amount reinvested was not a tax-free return of capital. In addition, our stockholders will be treated for tax purposes as having received an additional distribution to the extent the shares are purchased at a discount to fair market value. As a result, unless a stockholder is a tax-exempt entity, it may have to use funds from other sources to pay its tax liability on the value of the shares of common stock received.

Dividends payable by REITs generally do not qualify for the reduced tax rates available for some dividends.

Currently, the maximum tax rate applicable to qualified dividend income payable to U.S. stockholders that are individuals, trusts and estates is 20%. Dividends payable by REITs, however, generally are not eligible for this reduced rate. Although this does not adversely affect the taxation of REITs or dividends payable by REITs, the more favorable rates applicable to regular corporate qualified dividends could cause investors who are individuals, trusts and estates to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our common stock. Tax rates could be changed in future legislation.

If we were considered to actually or constructively pay a “preferential dividend” to certain of our stockholders, our status as a REIT could be adversely affected.

In order to qualify as a REIT, we must distribute annually to our stockholders at least 90% of our REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding net capital gain. In order for distributions to be counted as satisfying the annual distribution requirements for REITs, and to provide us with a REIT-level tax deduction, the distributions must not be “preferential dividends.” A dividend is not a preferential dividend if the distribution is pro rata among all outstanding shares of stock within a particular class, and in accordance with the preferences among different classes of stock as set forth in our organizational documents. Currently, there is uncertainty as to the IRS’s position regarding whether certain arrangements that REITs have with their stockholders could give rise to the inadvertent payment of a preferential dividend (e.g., the pricing methodology for stock purchased under a distribution reinvestment plan inadvertently causing a greater than 5% discount on the price of such stock purchased).

Initially, the per share price for our common stock pursuant to our DRIP will be $23.75, which is 95% of the primary offering price of $25.00 (which includes the maximum selling commissions and dealer manager fee). After the NAV pricing date, the per share price for our common stock pursuant to our DRIP will be equal to the per share NAV on the date that the distribution is payable, which, for U.S. federal income tax purposes, is intended to reflect the fair market value per share and does not include selling commissions or the dealer manager fee. If the IRS were to take a position contrary to our position that the per share NAV reflect the fair market value per share, it is possible that we may be treated as offering our stock under our DRIP at a discount greater than 5% of its fair market value resulting in the payment of a preferential dividend.

There is no de minimis exception with respect to preferential dividends. Therefore, if the IRS were to take the position that we inadvertently paid a preferential dividend, we may be deemed either to (a) have distributed less than 100% of our REIT taxable income and be subject to tax on the undistributed portion, or (b) have distributed less than 90% of our REIT taxable income and our status as a REIT could be terminated for the year in which such determination is made if we were unable to cure such failure.

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Complying with REIT requirements may limit our ability to hedge our liabilities effectively and may cause us to incur tax liabilities.

The REIT provisions of the Code may limit our ability to hedge our liabilities. Any income from a hedging transaction we enter into to manage risk of interest rate changes, price changes or currency fluctuations with respect to borrowings made or to be made to acquire or carry real estate assets, if properly identified under applicable Treasury Regulations, does not constitute “gross income” for purposes of the 75% or 95% gross income tests. To the extent that we enter into other types of hedging transactions, the income from those transactions will likely be treated as non-qualifying income for purposes of both of the gross income tests. As a result of these rules, we may need to limit our use of advantageous hedging techniques or implement those hedges through a TRS. This could increase the cost of our hedging activities because our TRSs would be subject to tax on gains or expose us to greater risks associated with changes in interest rates than we would otherwise want to bear. In addition, losses in a TRS generally will not provide any tax benefit, except for being carried forward against future taxable income of such TRS.

Complying with REIT requirements may force us to forgo or liquidate otherwise attractive investment opportunities.

To qualify as a REIT, we must ensure that we meet the REIT gross income tests annually and that at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, government securities and qualified REIT real estate assets, including certain mortgage loans and certain kinds of mortgage-related securities. The remainder of our investment in securities (other than government securities and qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our assets (other than government securities and qualified real estate assets) can consist of the securities of any one issuer, and no more than 25% of the value of our total assets can be represented by securities of one or more TRSs. If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences. As a result, we may be required to liquidate assets from our portfolio or not make otherwise attractive investments in order to maintain our qualification as a REIT. These actions could have the effect of reducing our income and amounts available for distribution to our stockholders.

The ability of our board of directors to revoke our REIT qualification without stockholder approval may subject us to U.S. federal income tax and reduce distributions to our stockholders.

Our charter provides that our board of directors may revoke or otherwise terminate our REIT election, without the approval of our stockholders, if it determines that it is no longer in our best interest to continue to qualify as a REIT. While we intend to elect and qualify to be taxed as a REIT, we may not elect to be treated as a REIT or may terminate our REIT election if we determine that qualifying as a REIT is no longer in our best interests. If we cease to be a REIT, we would become subject to U.S. federal income tax on our taxable income and would no longer be required to distribute most of our taxable income to our stockholders, which may have adverse consequences on our total return to our stockholders and on the market price of our common stock.

We may be subject to adverse legislative or regulatory tax changes that could increase our tax liability, reduce our operating flexibility and reduce the market price of our common stock.

In recent years, numerous legislative, judicial and administrative changes have been made in the provisions of U.S. federal income tax laws applicable to investments similar to an investment in shares of our common stock. Additional changes to the tax laws are likely to continue to occur, and we cannot assure our stockholders that any such changes will not adversely affect the taxation of a stockholder. Any such changes could have an adverse effect on an investment in our shares or on the market value or the resale potential of our assets. Our stockholders are urged to consult with their tax advisor with respect to the impact of recent legislation on their investment in our shares and the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our shares. Our stockholders also should note that our counsel’s tax opinion is based upon existing law, applicable as of the date of its opinion, all of which will be subject to change, either prospectively or retroactively.

Although REITs generally receive better tax treatment than entities taxed as regular corporations, it is possible that future legislation would result in a REIT having fewer tax advantages, and it could become more advantageous for a company that invests in real estate to elect to be treated for U.S. federal income tax purposes as a corporation. As a result, our charter provides our board of directors with the power, under certain circumstances, to revoke or otherwise terminate our REIT election and cause us to be taxed as a regular corporation, without the vote of our stockholders. Our board of directors has fiduciary duties to us and our stockholders and could only cause such changes in our tax treatment if it determines in good faith that such changes are in the best interest of our stockholders.

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The share ownership restrictions of the Code for REITs and the 9.8% share ownership limit in our charter may inhibit market activity in our shares of stock and restrict our business combination opportunities.

In order to qualify as a REIT, five or fewer individuals, as defined in the Code, may not own, actually or constructively, more than 50% in value of our issued and outstanding shares of stock at any time during the last half of each taxable year, other than the first year for which a REIT election is made. Attribution rules in the Code determine if any individual or entity actually or constructively owns our shares of stock under this requirement. Additionally, at least 100 persons must beneficially own our shares of stock during at least 335 days of a taxable year for each taxable year, other than the first year for which a REIT election is made. To help ensure that we meet these tests, among other purposes, our charter restricts the acquisition and ownership of our shares of stock.

Our charter, with certain exceptions, authorizes our directors to take such actions as are necessary and desirable to preserve our qualification as a REIT while we so qualify. Unless exempted by our board of directors, for so long as we qualify as a REIT, our charter prohibits, among other limitations on ownership and transfer of shares of our stock, any person from beneficially or constructively owning (applying certain attribution rules under the Code) more than 9.8% in value of the aggregate of our outstanding shares of stock and more than 9.8% (in value or in number of shares, whichever is more restrictive) of any class or series of our shares of stock. Our board of directors may not grant an exemption from these restrictions to any proposed transferee whose ownership in excess of the 9.8% ownership limit would result in the termination of our qualification as a REIT. These restrictions on transferability and ownership will not apply, however, if our board of directors determines that it is no longer in our best interest to continue to qualify as a REIT or that compliance with the restrictions is no longer required in order for us to continue to so qualify as a REIT.

These ownership limits could delay or prevent a transaction or a change in control that might involve a premium price for our common stock or otherwise be in the best interest of the stockholders.

Non-U.S. stockholders will be subject to U.S. federal withholding tax and may be subject to U.S. federal income tax on distributions received from us and upon the disposition of our shares.

Subject to certain exceptions, distributions received from us will be treated as dividends of ordinary income to the extent of our current or accumulated earnings and profits. Such dividends ordinarily will be subject to U.S. withholding tax at a 30% rate, or such lower rate as may be specified by an applicable income tax treaty, unless the distributions are treated as “effectively connected” with the conduct by the non-U.S. stockholder of a U.S. trade or business. Pursuant to the Foreign Investment in Real Property Tax Act of 1980 ("FIRPTA"), capital gain distributions attributable to sales or exchanges of “U.S. real property interests” ("USRPIs"), generally will be taxed to a non-U.S. stockholder as if such gain were effectively connected with a U.S. trade or business. However, a capital gain distribution will not be treated as effectively connected income if (a) the distribution is received with respect to a class of stock that is regularly traded on an established securities market located in the United States and (b) the non-U.S. stockholder does not own more than 5% of the class of our stock at any time during the one-year period ending on the date the distribution is received. We do not anticipate that our shares will be “regularly traded” on an established securities market for the foreseeable future, and therefore, this exception is not expected to apply.

Gain recognized by a non-U.S. stockholder upon the sale or exchange of our common stock generally will not be subject to U.S. federal income taxation unless such stock constitutes a USRPI under FIRPTA. Our common stock will not constitute a USRPI so long as we are a “domestically-controlled qualified investment entity.” A domestically-controlled qualified investment entity includes a REIT if at all times during a specified testing period, less than 50% in value of such REIT’s stock is held directly or indirectly by non-U.S. stockholders. We believe, but cannot assure our stockholders, that we will be a domestically-controlled qualified investment entity.

Even if we do not qualify as a domestically-controlled qualified investment entity at the time a non-U.S. stockholder sells or exchanges our common stock, gain arising from such a sale or exchange would not be subject to U.S. taxation under FIRPTA as a sale of a USRPI if: (a) our common stock is “regularly traded,” as defined by applicable Treasury regulations, on an established securities market, and (b) such non-U.S. stockholder owned, actually and constructively, 5% or less of our common stock at any time during the five-year period ending on the date of the sale. However, it is not anticipated that our common stock will be “regularly traded” on an established market. We encourage our stockholders to consult their tax advisor to determine the tax consequences applicable to them if they are a non-U.S. stockholder.

Potential characterization of distributions or gain on sale may be treated as unrelated business taxable income to tax-exempt investors.

If (a) we are a “pension-held REIT,” (b) a tax-exempt stockholder has incurred (or is deemed to have incurred) debt to purchase or hold our common stock, or (c) a holder of common stock is a certain type of tax-exempt stockholder, dividends on, and gains recognized on the sale of common stock by such tax-exempt stockholder may be subject to U.S. federal income tax as unrelated business taxable income under the Code.

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Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

Our Hotels

On March 21, 2014, the Company acquired the Barceló Portfolio for an aggregate purchase price of approximately $110.1 million, exclusive of closing costs. The Barceló Portfolio consists of (i) three wholly owned hotel assets (the "Portfolio Owned Assets"), the Baltimore Courtyard Inner Harbor Hotel (the "Baltimore Courtyard"), the Courtyard Providence Downtown Hotel (the "Providence Courtyard") and the Homewood Suites by Hilton Stratford (the "Stratford Homewood Suites"); (ii) one leased asset, the Georgia Tech Hotel & Conference Center (the "Georgia Tech Hotel"); and (iii) equity interests in two joint ventures (the "Joint Venture Assets") that each own one hotel, the Westin Virginia Beach and the Hilton Garden Inn Blacksburg.

The following table presents certain additional information about the properties we owned at December 31, 2014:

Property	Location	Number of Rooms	Contract Purchase Price (In thousands)			Ownership Percentage of Hotel			Purchase Price per Room (In thousands)
Baltimore Courtyard	Baltimore, MD	205	$	41,000		100	%		$	200.00
Providence Courtyard	Providence, RI	216	$	35,500		100	%		$	164.35
Stratford Homewood Suites	Stratford, CT	135	$	16,500		100	%		$	122.22
Georgia Tech Hotel	Atlanta, GA	252	$	8,500		NA		(3)	$	33.73	(1)
Westin Virginia Beach	Virginia Beach, VA	236	$	3,465		30.53	%		$	14.68	(2)
Hilton Garden Inn Blacksburg	Blacksburg, VA	137	$	1,535		24.00	%		$	11.20	(2)
		1,181	$	106,500	(4)
(1) Represents the purchase price per room for the leasehold interest in the property
(2) Represents the purchase price per room for the equity interest in the joint venture
(3) The Company owns the leasehold interest in the property and accounts for it as an operating lease
(4) Represents the contract purchase price for the hotels. The aggregate purchase price for the total net operating assets acquired was $110.1 million.

NA - not applicable

Debt

On March 21, 2014, the Company, through indirect wholly owned subsidiaries of our OP, obtained a loan from German American Capital Corporation in the amount of $45.5 million secured by mortgages on the Baltimore Courtyard and the Providence Courtyard.

The following table sets forth the debt obligations secured by the Baltimore Courtyard and Providence Courtyard as of December 31, 2014:

Use of Proceeds	Principal Balance		Debt per Room	Interest Rate	Maturity Date
Baltimore Courtyard & Providence Courtyard	$	45,500,000	$108,076	Fixed at 4.30%	April 2019

The Company’s promissory notes payable as of December 31, 2014 are as follows:

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Use of Proceeds	Principal Balance		Debt per Room	Interest Rate	Maturity Date
Barceló acquisition	$	63,074,000	$53,407	Fixed at 6.80%	See below
Property improvement plan	$	1,775,000	$1,503	Fixed at 4.50%	March 2019

______________________________________________________________________________________________

The promissory notes payable for the Barceló acquisition originally consisted of the Portfolio Owned Assets and Joint Venture Assets promissory notes which had a maturity date of within ten business days after the Company raised equal to or greater than $150.0 million in common equity from the Offering. During the year ended December 31, 2014, the Company entered into an amendment to the Portfolio Owned Assets and Joint Venture Assets promissory notes whereby the promissory notes were combined into one note (the "Barceló Promissory Note") with an outstanding principal amount of $63.1 million. The Barceló Promissory Note has a maturity date of within ten business days after the Company raises $70.0 million in common equity from the Offering after the closing of the Grace Acquisition and payment of all acquisition related expenses (including payments to our Advisor and its affiliates), which has not yet occurred. There are no principal payments under the Barceló Promissory Note payable for 2015 and 2016, unless the contingent payment feature above is satisfied by raising equal to or greater than $70.0 million in common equity from the Offering after the closing of the Grace Acquisition and payment of all acquisition related expenses (including payments to our Advisor and its affiliates). An aggregate of $3.5 million of deferred consideration in connection with the acquisition of the Barceló Portfolio is due concurrently with the Barceló Promissory Note.

Item 3. Legal Proceedings.

We are not a party to any material pending legal proceedings.

Item 4. Mine Safety Disclosures.

Not applicable.

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PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our shares of common stock are not traded on a national securities exchange. There currently is no public market for our shares and there may never be one. Even if a stockholder is able to find a buyer for his or her shares, the stockholder may not sell his or her shares unless the buyer meets applicable suitability and minimum purchase standards and the sale does not violate state securities laws. Our charter also prohibits the ownership of more than 9.8% in value of the aggregate of the outstanding shares of our stock or more than 9.8% (in value or in number of shares, whichever is more restrictive) of any class or series of shares of our stock by a single investor, unless exempted by our board of directors, which may inhibit large investors from desiring to purchase shares from stockholders. Pursuant to our Offering, we are selling shares of our common stock to the public at a price of $25.00 per share and at $23.75 per share pursuant to our DRIP.

In order for FINRA members and their associated persons to participate in the offering and sale of shares of common stock pursuant to our Offering, we are required pursuant to FINRA Rule 2310(b)(5) to disclose in each annual report distributed to stockholders a per share estimated value of the shares, the method by which it was developed and the date of the data used to develop the estimated value. In addition, we prepare annual statements of estimated share values to assist fiduciaries of retirement plans subject to the annual reporting requirements of the Employee Retirement Income Security Act of 1974 in the preparation of their reports relating to an investment in our shares. During our Offering, the value of the shares is deemed to be the offering price of $25.00 per share (without regard to purchase price discounts for certain categories of purchasers), as adjusted for any special distribution of net sales proceeds. There is no public trading market for the shares at this time, and there can be no assurance that stockholders would receive $25.00 per share if such a market did exist and they sold their shares or that they will be able to receive such amount for their shares in the future. Nor does this deemed value reflect the distributions that stockholders would be entitled to receive if our properties were sold and the sale proceeds were distributed upon liquidation of our Company. Such a distribution upon liquidation may be less than $25.00 per share primarily due to the fact that the funds initially available for investment in properties were reduced from the gross offering proceeds in order to pay selling commissions and dealer manager fees, organization and offering expenses, and acquisitions and advisory fees.

Holders

As of March 15, 2015, we had 15,095,634 shares of common stock outstanding held by a total of 8,651 stockholders.

Distributions

The Company intends to elect and qualify to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with the tax year ended December 31, 2014. If the Company qualifies for taxation as a REIT, it generally will not be subject to federal corporate income tax as long as it distributes all of its REIT taxable income to its stockholders. REITs are subject to a number of other organizational and operational requirements. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. The Company's hotels are leased to a TRS which is owned by the OP. A TRS is subject to federal, state and local income taxes.

On February 3, 2014, the Company's board of directors declared distributions payable to stockholders of record each day during the applicable month at a rate equal to $0.0000465753 per day, or $1.70 per annum, per share of common stock. The first distribution was paid in May 2014 to holders of record in April 2014. The distributions are payable by the fifth day following each month end to stockholders of record at the close of business each day during the prior month. Additionally, our organizational documents permit us to pay distributions from unlimited amounts of any source and we may use sources other than operating cash flows to fund distributions, including proceeds from our Offering, which may reduce the amount of capital we ultimately invest in properties or other permitted investments and negatively impact the value of our stockholders' investment.

Cash used to pay our distributions may be generated from funds received from property operating results, refinancings, the sale of our preferred and common stock and contributions from our Advisor. During the year ended December 31, 2014, cash used to pay our distributions was generated from proceeds from common stock and common stock issued under the DRIP. Following the Grace Acquisition, we expect that we will use funds received from operating activities to pay a greater proportion of our distributions and will be able to reduce, and in the future eliminate, the use of funds from the sale of common stock to pay distributions. Distribution payments are dependent on the availability of funds. Our board of directors may reduce the amount of distributions to be paid or suspend distribution payments at any time, therefore distribution payments are not assured. As of December 31, 2014 and 2013, distributions paid totaled $3.5 million and $0, respectively.

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Share-based Compensation

The Company has an employee and director incentive restricted share plan (the “RSP”), which provides the Company with the ability to grant awards of restricted shares to the Company’s directors, officers and employees (if the Company ever has direct employees); employees of the Advisor and its affiliates; employees of entities that provide services to the Company; directors of the Advisor or of entities that provide services to the Company; or certain consultants to the Advisor and its affiliates. The total number of shares of common stock granted under the RSP shall not exceed 5% of the Company’s authorized shares of common stock pursuant to the offering and in any event will not exceed 4.0 million shares (as such number may be adjusted for stock splits, stock dividends, combinations and similar events).

Restricted share awards entitle the recipient to receive shares of common stock from the Company under terms that provide for vesting over a specified period of time or upon attainment of pre-established performance objectives. Such awards would typically be forfeited with respect to the unvested shares upon the termination of the recipient’s employment or other relationship with the Company. Restricted shares may not, in general, be sold or otherwise transferred until restrictions are removed and the shares have vested. Holders of restricted shares may receive cash distributions prior to the time that the restrictions on the restricted shares have lapsed. Any distributions payable in shares of common stock shall be subject to the same restrictions as the underlying restricted shares. The fair value of the restricted shares will be expensed over the vesting period of five years.

The RSP also provides for the automatic grant of 1,333 restricted shares of common stock to each of the independent directors, without any further action by the Company’s board of directors or the stockholders, on the date of initial election to the board of directors and on the date of each annual stockholder’s meeting. Restricted stock issued to independent directors will vest over a five-year period following the first anniversary of the date of grant in increments of 20% per annum.

As of December 31, 2014 and 2013, the Company has granted 6,665 and 0 restricted shares of common stock, respectively.

Recent Sale of Unregistered Equity Securities

We did not sell any equity securities that were not registered under the Securities Act during the period ended December 31, 2014.

Use of Proceeds from Sales of Registered Securities

On January 7, 2014, the we commenced our IPO on a "reasonable best efforts" basis of up to 80,000,000 shares of common stock, $0.01 par value per share, at a price of $25.00 per share, subject to certain volume and other discounts, pursuant to a registration statement on Form S-11 (File No. 333-190698), as amended (the "Registration Statement"), filed with the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended. The Registration Statement also covers up to 21,052,631 shares of common stock available pursuant to the DRIP under which our common stockholders may elect to have their distributions reinvested in additional shares of our common stock. On February 3, 2014, we received and accepted subscriptions in excess of the minimum offering amount of $2.0 million in Offering proceeds, broke escrow and issued shares of common stock to the initial investors who were admitted as stockholders. As of December 31, 2014, we had 10.2 million shares of common stock outstanding and had received total gross proceeds from the IPO of approximately $252.9 million, including shares issued under the DRIP.

At December 31, 2014, we had incurred organization and offering costs in the amounts set forth below (in thousands):

	Year Ended December 31,
(In thousands)	2014		2013
Selling commissions and dealer manager fees	$	23,954	$	—
Other offering costs	5,936		1,505
Total offering costs	$	29,890	$	1,505

Other organization and offering costs include non-recurring legal and due diligence fees related to the initial process of acquiring an effective Registration Statement. As of December 31, 2014, cumulative offering costs included $31.4 million of offering costs reimbursements incurred from the Advisor and Dealer Manager, including commission and dealer manager fees. We are obligated to reimburse our Advisor or its affiliates, as applicable, for organization and offering costs paid by them on our behalf, provided that our Advisor is obligated to reimburse us to the extent organization and offering costs (excluding selling commissions and the dealer manager fee) incurred by us in our Offering exceed 2.0% of gross offering proceeds. Selling commissions and dealer manager fees cannot exceed 10.0% of the offering price. As a result, the cumulative offering costs paid

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by us cannot exceed 12.0% of the gross proceeds determined at the end of the Offering. Cumulative offering costs, net of unpaid amounts, were less than the 12.0% threshold as of December 31, 2014.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Our common stock is currently not listed on a national securities exchange and we will not seek to list our stock until the time our independent directors believe that the listing of our stock would be in the best interest of the Company. In order to provide stockholders with the benefit of some interim liquidity, our board of directors has adopted our SRP, which enables our stockholders to sell their shares back to us, subject to the significant conditions and limitations in our SRP. Our Sponsor, our Advisor, our Property Manager, our Sub-Property Manager, our directors and their affiliates are prohibited from receiving a fee on any share repurchases. The terms of our SRP are more flexible in cases involving the death or disability of a stockholder.

Repurchases of shares of our common stock, when requested, are at our sole discretion and generally will be made quarterly until our Advisor begins calculating NAV. Prior to the NAV pricing date, we will limit the number of shares repurchased during any calendar year to 5% of the weighted average number of shares of common stock outstanding during the prior calendar year. In addition, funds available for our SRP may not be sufficient to accommodate all requests. Due to these limitations, we cannot guarantee that we will be able to accommodate all repurchase requests. Funding for our SRP will be derived from proceeds we maintain from the sale of shares under the DRIP and other operating funds, if any, as our board of directors, in its sole discretion, may reserve for this purpose.

Unless the shares of our common stock are being repurchased in connection with a stockholder’s death or disability, the purchase price for shares repurchased under our SRP will be as set forth below until our Advisor begins calculating NAV. We do not currently anticipate obtaining appraisals for our investments (other than investments in transactions with our Sponsor, our Advisor, our Property Manager, our Sub-Property Manager, our directors or their respective affiliates) prior to the NAV pricing date and, accordingly, the estimated value of our investments should not be viewed as an accurate reflection of the fair market value of our investments nor will they represent the amount of net proceeds that would result from an immediate sale of our assets. Commencing with the NAV pricing date, each of our properties will be appraised annually and our Advisor will be responsible for calculating our quarterly NAV at the end of the day on which we file our quarterly financial report. Our board of directors will review the NAV calculation quarterly. Once we begin calculating NAV, to the extent we repurchase shares pursuant to our SRP, such repurchases will be at the applicable per share NAV at the time of such repurchase.

Only those stockholders who purchased their shares from us or received their shares from us (directly or indirectly) through one or more non-cash transactions may be able to participate in our SRP. In other words, once our shares are transferred for value by a stockholder, the transferee and all subsequent holders of the shares are not eligible to participate in our SRP. Prior to the time our Advisor begins calculating NAV, we will repurchase shares on the last business day of each quarter (and in all events on a date other than a dividend payment date). Prior to the time our Advisor begins calculating NAV, the price per share that we will pay to repurchase shares of our common stock, in each case, as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to our common stock, will be as follows:

• for stockholders who have continuously held their shares of our common stock for at least one year, the price will be the lower of $23.13 and 92.5% of the amount paid for each such share;

• for stockholders who have continuously held their shares of our common stock for at least two years, the price will be the lower of $23.75 and 95.0% of the amount paid for each such share;

• for stockholders who have continuously held their shares of our common stock for at least three years, the price will be the lower of $24.38 and 97.5% of the amount paid for each such share; and

• for stockholders who have held their shares of our common stock for at least four years, the price will be the lower of $25.00 and 100.0% of the amount that our stockholders paid for each share.

Upon the death or disability of a stockholder, upon request, we will waive the one-year holding requirement that otherwise will apply to redemption requests made prior to the NAV pricing date. Shares repurchased in connection with the death or disability of a stockholder will be repurchased at a purchase price equal to the price actually paid for the shares during the offering, or if not engaged in the offering, the per share purchase price will be based on the greater of $25.00 or the then-current NAV of the shares as determined by our board of directors (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to our common stock). In addition, we may waive the holding period in the event of a stockholder’s bankruptcy or other exigent circumstances.

After the NAV pricing date, stockholders may make daily requests that we repurchase all or a portion (but generally at least 25% of a stockholder’s shares) of their shares pursuant to our SRP. At such time, we will limit shares repurchased during any calendar year to 5% of the weighted average number of shares outstanding during the prior calendar year. In addition, our stockholders will only be able to have their shares repurchased to the extent that we have sufficient liquid assets. Most of our assets will consist of properties which cannot generally be readily liquidated without impacting our ability to realize full value upon their disposition. Therefore, we may not always have sufficient liquid resources to satisfy all repurchase requests. Following

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the NAV pricing date, in order to provide liquidity for repurchases, we intend to maintain 5% of our NAV in excess of $1.0 billion in cash, cash equivalents and other short-term investments and certain types of real estate related assets that can be liquidated more readily than properties, or collectively, liquid assets. However, our stockholders should not expect that we will maintain liquid assets at or above these levels. To the extent that we maintain borrowing capacity under a line of credit, such available amount will be included in calculating our liquid assets.

Whether our Advisor has begun NAV calculations or not, our SRP immediately will terminate if our shares are listed on any national securities exchange. In addition, our board of directors may amend, suspend (in whole or in part) or terminate our SRP at any time upon 30 days’ notice. Further, our board of directors reserves the right, in its sole discretion, to reject any requests for repurchases. As of December 31, 2014, no shares were eligible to be redeemed under the SRP.

Item 6. Selected Financial Data.

The following selected financial data as of December 31, 2014, and the years ended December 31, 2014 and 2013, should be read in conjunction with the accompanying consolidated/combined financial statements of American Realty Capital Hospitality Trust, Inc. and the notes thereto and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" below. The Predecessor represents hospitality assets and operations owned by Barceló Crestline Corporation and its consolidated subsidiaries. The selected financial data for the consolidated financial statements of the Company as of and for the year ended December 31, 2013 is not presented as we had not broken escrow, purchased our first properties or commenced operations as of December 31, 2013.

Balance sheet data (In thousands)	Successor		Predecessor
	December 31, 2014		December 31, 2013		December 31, 2012
Total real estate investments, at cost	$	98,545	$	147,531	$	144,843
Total assets	333,374		135,242		136,009
Mortgage notes payable	45,500		41,449		38,400
Total liabilities	131,579		46,746		43,879
Total equity	201,795		88,496		92,130

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	Successor			Predecessor
	For the Period from March 21 to December 31, 2014			For the Period from January 1 to March 20, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
Operating data (In thousands)
Total revenues	$	34,871		$	8,245		$	39,797		$	39,785
Operating expenses:
Rooms	5,411			1,405			6,340			6,092
Food and beverage	3,785			1,042			4,461			4,500
Management fees - related party	1,498			289			1,471			1,419
Other property-level operating costs	13,049			3,490			15,590			15,437
Depreciation and amortization	2,796			994			5,105			5,170
Loss on disposal of property and equipment	—			—			74			—
Lease expense	3,879			933			4,321			4,312
Total operating expenses	30,418			8,153			37,362			36,930
Income from operations	4,453			92			2,435			2,855
Other income (expenses):
Interest revenue	103			—			—			1
Interest expense	(5,958		)	(531		)	(2,265		)	(2,884		)
Acquisition and transaction related costs	(10,884		)	—			—			—
Loss on change in fair value of interest rate swaps	—			—			—			(400		)
Equity in earnings (losses) of unconsolidated entities	352			(166		)	(65		)	(442		)
General and administrative	(2,316		)	—			—			—
Total other expenses	(18,703		)	(697		)	(2,330		)	(3,725		)
Net income (loss)	$	(14,841	)	$	(605	)	$	105		$	(870	)
Other data:
Cash flows provided by (used in) operations	$	(9,650	)	$	(556	)	$	5,818		$	5,875
Cash flows used in investing activities	(122,082		)	$	(551	)	(2,273		)	(795		)
Cash flows provided by (used in) financing activities	263,593			(937		)	(677		)	(3,314		)

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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with our accompanying consolidated/combined financial statements. The following information contains forward-looking statements, which are subject to risks and uncertainties. Should one or more of these risks or uncertainties materialize, actual results may differ materially from those expressed or implied by the forward-looking statements. Please see "Forward-Looking Statements" elsewhere in this report for a description of these risks and uncertainties.

Overview

American Realty Capital Hospitality Trust, Inc. was incorporated on July 25, 2013 as a Maryland corporation and intends to qualify as a REIT beginning with the taxable year ended December 31, 2014. We were formed primarily to acquire lodging properties in the midscale limited service, extended stay, select service, upscale select service, and upper upscale full service segments within the hospitality sector. We have no limitation as to the brand of franchise or license with which our hotels will be associated. All such properties may be acquired by us alone or jointly with another party. We may also originate or acquire first mortgage loans secured by real estate and invest in other real estate-related debt. As of December 31, 2014, we have acquired interests in six hotels through fee simple, leasehold and joint venture interests, which we refer to as the Barceló Portfolio.

On January 7, 2014, we commenced our IPO on a "reasonable best efforts" basis of up to 80,000,000 shares of common stock, $0.01 par value per share, at a price of $25.00 per share, subject to certain volume and other discounts, pursuant to the Registration Statement, filed with the SEC under the Securities Act. The Registration Statement also covers up to 21,052,631 shares of common stock available pursuant to the DRIP under which our common stockholders may elect to have their distributions reinvested in additional shares of common stock.

Until the NAV pricing date, the per share purchase price in the IPO will be up to $25.00 per share (including the maximum allowed to be charged for commissions and fees) and shares issued under the DRIP will initially be equal to $23.75 per share, which is 95% of the initial per share offering price in the IPO. Thereafter, the per share purchase price will vary quarterly and will be equal to our NAV per share plus applicable commissions and fees in the case of the primary offering and the per share purchase price in the DRIP will be equal to the NAV per share. On February 3, 2014, we received and accepted subscriptions in excess of the minimum offering amount of $2.0 million in Offering proceeds, broke escrow and issued shares of common stock to the initial investors who were admitted as stockholders. As of December 31, 2014, we had 10.2 million shares of stock outstanding and had received total gross proceeds from the IPO of approximately $252.9 million, including shares issued under the DRIP. As of December 31, 2014, the aggregate value of all the common stock outstanding was $254.0 million based on a per share value of $25.00 (or $23.75 for shares issued under the DRIP).

Substantially all of our business is conducted through the OP. We are the sole general partner and hold substantially all of the OP Units. Additionally, the Special Limited Partner contributed $2,020 to the OP in exchange for 90 OP Units, which represents a nominal percentage of the aggregate OP ownership. The holders of OP Units have the right to convert OP Units for the cash value of a corresponding number of shares of common stock or, at the option of the OP, a corresponding number of shares of common stock in accordance with the limited partnership agreement of the OP. The remaining rights of the limited partner interests are limited, however, and do not include the ability to replace the general partner or to approve the sale, purchase or refinancing of the OP's assets.

We have no direct employees. We have retained the Advisor to manage certain aspects of our affairs on a day-to-day basis. The Property Manager serves as our property manager and the Property Manager has retained the Sub-Property Manager, an entity under common control with the parent of the Sponsor to provide services, including locating investments, negotiating financing and operating certain hotel assets in our portfolio. The Dealer Manager, an entity under common control with the parent of our Sponsor serves as the dealer manager of the offering. The Advisor, Special Limited Partner, Property Manager, Sub-Property Manager and Dealer Manager are related parties and receive fees, distributions and other compensation for services related to the Offering and the investment and management our assets.

The results of operations for the period from January 1 to March 20, 2014 for the Barceló Portfolio (the "Predecessor") and for the period from March 21 to December 31, 2014 for us are not necessarily indicative of the results for the entire year. Certain prior period amounts have been reclassified to conform to current period presentation.

Grace Acquisition

On May 23, 2014, we entered into a Real Estate Sale Agreement to acquire the 126 hotels from the sellers of the Grace Portfolio. On November 11, 2014, the Real Estate Sale Agreement was amended and restated to incorporate all amendments made to that date (the "Amended Purchase Agreement"). The Amended Purchase Agreement reduced the number of hotels to be

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acquired to the 116 hotels currently comprising the Grace Portfolio for an aggregate purchase price of $1.808 billion, exclusive of closing costs and changed the scheduled close date to February 27, 2015.

As of December 31, 2014, the acquisition of the Grace Portfolio had not been completed. On February 27, 2015, we acquired the Grace Portfolio, and as anticipated pursuant to the terms of the Amended Purchase Agreement, we funded approximately $230.1 million of the purchase price with cash generated through our Offering, funding approximately $903.9 million through the assumption of the Assumed Grace Indebtedness comprising the Assumed Grace Mortgage Loan and the Assumed Grace Mezzanine Loan, and approximately $227.0 million through the Additional Grace Mortgage Loan. The Assumed Grace Mortgage Loan is approximately $801.1 million at an interest rate of London Interbank Offered Rate ("LIBOR") plus 3.11%, or 3.28% as of February 27, 2015, and the Assumed Grace Mezzanine Loan is approximately $102.8 million at an interest rate of LIBOR plus 4.77% or 4.94% as of February 27, 2015. The Assumed Grace Indebtedness is secured by 96 of the 116 hotels in the Grace Portfolio and matures on May 1, 2016, subject to three (one-year) extension rights which, if all three are exercised, result in an outside maturity date of May 1, 2019. The Additional Grace Mortgage Loan is secured by 20 of the 116 hotels in the Portfolio and an additional hotel property already owned by a subsidiary of our OP and part of the Barceló Portfolio. The Additional Grace Mortgage Loan will mature on March 6, 2017, subject to a one-year extension right, which, if exercised, would result in an outside maturity date of March 6, 2018 and has an interest rate equal to the greater of (i) a floating rate of interest equal to LIBOR plus 6.00% and (ii) 6.25%, or 6.25% as of February 27, 2015.

The remaining $447.1 million of the contract purchase price was satisfied by the issuance of the Grace Preferred Equity Interests in two newly-formed Delaware limited liability companies, each of which is an indirect subsidiary of our company and an indirect owner of the Grace Portfolio. The holders of the Grace Preferred Equity Interests are entitled to monthly distributions at a rate of 7.50% per annum for the first 18 months following closing and 8.00% per annum thereafter. On liquidation, the holders of the Grace Preferred Equity Interests will be entitled to receive their original value (as reduced by redemptions) prior to any distributions being made to us or our shareholders. After the earlier to occur of either (i) the date of repayment in full of our currently outstanding unsecured obligations in the original principal amount of approximately $63.1 million (together with the approximately $3.5 million deferred payment with respect to the March 2014 acquisition of the Georgia Tech Hotel & Conference Center, which is due concurrently), which represents the Barceló Acquisition Promissory Note (See Note 7 - Promissory Notes Payable), or (ii) the date the gross amount of IPO proceeds received by us following the acquisition of the Grace Portfolio and payment of all acquisition related expenses (including payments to our Advisor and its affiliates) exceeds $100.0 million, we will be required to use 35.0% of any IPO proceeds to redeem the Grace Preferred Equity Interests at par, up to a maximum of $350.0 million in redemptions for any 12-month period. We will also be required, in certain circumstances, to apply debt proceeds to redeem the Grace Preferred Equity Interests at par. As of February 27, 2018, we will be required to have redeemed 50.0% of the Grace Preferred Equity Interests, and we will be required to redeem 100.0% of the Grace Preferred Equity Interests remaining outstanding at the earlier of (i) 90 days following the stated maturity date (including extension options) under the Assumed Grace Indebtedness, and (ii) February 27, 2019. In addition, we will have the right, at our option, to redeem the Grace Preferred Equity Interests, in whole or in part, at any time at par. The holders of the Grace Preferred Equity Interests will have certain consent rights over major actions by us relating to the Grace Portfolio. If we are unable to satisfy the redemption, distribution or other requirements of the Grace Preferred Equity Interests (including if there is a default under the related guarantees provided by our company, our operating partnership and the individual principals of the parent of our Sponsor), the holders of the Grace Preferred Equity Interests have certain rights, including the ability to assume control of the operations of the Grace Portfolio through the assumption of control of the two newly-formed Delaware limited liability companies. Due to the fact that the Grace Preferred Equity Interests will be mandatorily redeemable and certain of their other characteristics, the Grace Preferred Equity Interests will be treated as debt in accordance with accounting principles generally accepted in the United States of America ("GAAP").

Significant Accounting Estimates and Critical Accounting Policies

Principles of Consolidation and Basis of Presentation

The accompanying consolidated/combined financial statements include our accounts and our subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. In determining whether we have a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity for which we have the primary beneficiary.

The Predecessor represents hospitality assets and operations owned by Barceló Crestline Corporation and its consolidated subsidiaries ("BCC"), which historically have been maintained in various legal entities. Historically, financial statements have not been prepared for the Predecessor as a discrete stand-alone entity. The accompanying consolidated/combined financial statements for the Predecessor as of December 31, 2013, for the period from January 1 to March 20, 2014 and for the year ended December 31, 2013 have been derived from the historical accounting records of BCC and reflect the assets, liabilities,

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equity, revenue and expenses directly attributable to the Predecessor, as well as allocations deemed reasonable by management, to present the combined financial position, results of operations, changes in equity, and cash flows of the Predecessor on a stand-alone basis. Included in the accompanying consolidated/combined statement of operations for the period from March 21 to December 31, 2014 is $0.2 million of costs related to us for the period from January 1 to March 20, 2014.

Real Estate Investments and Below-Market Lease

We allocate the purchase price of properties acquired in real estate investments to tangible and identifiable intangible assets acquired based on their respective fair values at the date of acquisition. Tangible assets include land, land improvements, buildings and fixtures. We utilize various estimates, processes and information to determine the property value. Estimates of value are made using customary methods, including data from appraisals, comparable sales, discounted cash flow analysis and other methods. Amounts allocated to land, land improvements, buildings and fixtures are based on purchase price allocation studies performed by independent third parties or our analysis of comparable properties in our portfolio. Identifiable intangible assets and liabilities, as applicable, are typically related to contracts, including operating lease agreements, ground lease agreements and hotel management agreements, which will be recorded at fair value.

In making estimates of fair values for purposes of allocating the purchase price, we utilize a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. We also consider information obtained about each property as a result of our pre-acquisition due diligence in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed.

Investments in real estate that are not considered to be business combinations and are recorded at cost. Improvements and replacements are capitalized when they extend the useful life of the asset. Costs of repairs and maintenance are expensed as incurred. Depreciation of our assets is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings, 15 years for land improvements, five years for fixtures and the shorter of the useful life or the remaining lease term for leasehold interests.

We are required to make subjective assessments as to the useful lives of our assets for purposes of determining the amount of depreciation to record on an annual basis with respect to our investments in real estate. These assessments have a direct impact on our net income because if we were to shorten the expected useful lives of our investments in real estate, we would depreciate these investments over fewer years, resulting in more depreciation expense and lower net income on an annual basis.

A disposal of one of our components or a group of our components is required to be reported in discontinued operations only if the disposal represents a strategic shift that has, or will have, a major effect on our operations and financial results. We are required to present, for each comparative period, the assets and liabilities of a disposal group that includes a discontinued operation separately in the asset and liability sections, respectively, of the statement of financial position. As a result, the operations of sold properties through the date of their disposal will be included in continuing operations, unless the sale represents a strategic shift. However, the gain or loss on the sale of a property will be reported separately below income from continuing operations.

The below-market lease intangible is based on the difference between the market rent and the contractual rent and is discounted to a present value using an interest rate reflecting our current assessment of the risk associated with the lease acquired. Acquired lease intangible assets are amortized over the remaining lease term. The amortization of a below-market lease is recorded as an increase to rent expense on the consolidated/combined statements of operations.

Impairment of Long Lived Assets and Investments in Unconsolidated Entities

When circumstances indicate the carrying value of a property may not be recoverable, we review the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. The estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of demand, competition and other factors. If impairment exists, due to the inability to recover the carrying value of a property, an impairment loss will be recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income. No such impairment losses were recorded in the periods presented.

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Revenue Recognition

Hotel revenue is recognized as earned, which is generally defined as the date upon which a guest occupies a room or utilizes the hotel services.

Income Taxes

We intend to elect and qualify to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with our tax year ended December 31, 2014. In order to qualify as a REIT, we must annually distribute to our stockholders 90% of our REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding net capital gain, and must comply with various other organizational and operational requirements. If we qualify for taxation as a REIT, we generally will not be subject to federal corporate income tax on that portion of our REIT taxable income that we distribute to our stockholders and complies with various other organizational and operational requirements applicable to it as a REIT. Even if we qualify for taxation as a REIT, it may be subject to certain state and local taxes on its income, property tax and federal income and excise taxes on its undistributed income. Our hotels are leased to a taxable REIT subsidiary ("TRS") which is a wholly owned subsidiary of the OP. The TRS is subject to federal, state and local income taxes.

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for net operating loss, capital loss, and tax credit carryovers. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which such amounts are expected to be realized or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period when the new rate is enacted. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of available evidence, including future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies.

GAAP prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken in a tax return. We must determine whether it is "more-likely-than-not" that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Once it is determined that a position meets the more-likely-than-not recognition threshold, the position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement in order to determine the amount of benefit to recognize in the financial statements. This accounting standard applies to all tax positions related to income taxes. We recognize accrued interest related to unrecognized tax benefits in interest expense and penalties in operating expenses.

Reportable Segments

We have determined that we have one reportable segment, with activities related to investing in real estate. Our investments in real estate generate room revenue and other income through the operation of the properties, which comprise 100% of the total consolidated/combined revenues. Management evaluates the operating performance of our investments in real estate on an individual property level, none of which represent a reportable segment.

Revenue Performance Metrics

We measure hotel revenue performance by evaluating revenue metrics such as:

• Occupancy percentage (“Occ”)

• Average Daily Rate (“ADR”)

• Revenue per Available room (“RevPAR”)

Occ, ADR, and RevPAR are commonly used, non-GAAP, measures within the hotel industry to evaluate hotel performance. RevPAR is defined as the product of the ADR and Occ (and also as the quotient of room revenue and available rooms). RevPAR does not include food and beverage or other revenues generated by the hotels. We evaluate individual hotel RevPAR performance on an absolute basis with comparisons to budget, to prior periods and to the competitive set in the market, as well as on a company-wide and regional basis.

Results of Operations

The results of operations for the accompanying consolidated/combined financial statements discussed below include the combined results for us and the Predecessor for the year endedDecember 31, 2014 and the results of the Predecessor for the year ended December 31, 2013. The cash flows for the accompanying consolidated/combined financial statements discussed

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below include only the results for us for the period from March 21 to December 31, 2014 and the results for the Predecessor for the year ended December 31, 2013.

The Barceló Portfolio consists of (i) three wholly owned hotel assets, the Baltimore Courtyard, the Providence Courtyard and the Stratford Homewood Suites; (ii) one leased asset, the Georgia Tech Hotel; and (iii) equity interests in two joint ventures that each own one hotel, the Westin Virginia Beach and the Hilton Garden Inn Blacksburg.

Comparison of the Year Ended December 31, 2014 to the Year Ended December 31, 2013

Room revenues for the portfolio were $32.2 million for the year endedDecember 31, 2014, compared to room revenues of $30.5 million for the year ended December 31, 2013. RevPAR for the total portfolio increased 6.2% year-over-year for the year endedDecember 31, 2014. The RevPAR growth rates reflect the percentage change from the prior year’s results.

Occ, ADR and RevPAR results are presented in the following tables to reflect certain operating information for the portfolio.

	Year Ended
Total Portfolio	December 31, 2014			December 31, 2013
Number of rooms	1,181			1,181
Occ	74.3		%	71.3		%
ADR	$	140.44		$	137.94
RevPAR	$	104.40		$	98.33
RevPAR growth rate	6.2		%	NA

	Year Ended
Consolidated Assets	December 31, 2014			December 31, 2013
Number of rooms	556			556
Occ	75.7		%	74.6		%
ADR	$	147.77		$	145.62
RevPAR	$	111.86		$	108.56
RevPAR growth rate	3.0		%	NA

	Year Ended
Unconsolidated Joint Ventures	December 31, 2014			December 31, 2013
Number of rooms	373			373
Occ	72.7		%	69.5		%
ADR	$	129.39		$	125.81
RevPAR	$	94.13		$	87.39
RevPAR growth rate	7.7		%	NA

	Year Ended
Leasehold Interest	December 31, 2014			December 31, 2013
Number of rooms	252			252
Occ	73.7		%	66.8		%
ADR	$	139.97		$	137.70
RevPAR	$	103.14		$	91.94
RevPAR growth rate	12.2		%	NA

The RevPAR rates for the year ended December 31, 2014 compared to the year ended December 31, 2013 is the result of the growth in the hotels’ ADR and occupancy, particularly at the Baltimore Courtyard due to now completed renovations to the lobby and improvements to the restaurant and bar and higher RevPAR growth in the greater Baltimore market. These renovations also resulted in a lower occupancy at the hotel in 2013. Also contributing to the higher RevPAR was an increase in both transient and group occupied rooms at the Georgia Tech Hotel as a result of higher occupancy overall in the Atlanta market and the efforts of the Sub-Property Manager to improve the operations of the hotel which included appointing a new hotel general manager. Occupancy also increased at the Westin Virginia Beach primarily as a result of an increase in occupancy in the Virginia Beach market. These increases were offset by a decrease in RevPAR at Stratford Homewood Suites which had a higher occupancy than normal in the first quarter of 2013 as a result of people displaced from their homes by Hurricane Sandy.

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Other non-room operating revenues for the portfolio include food and beverage (16.6% and 15.7% of total revenues for the year ended December 31, 2014 and 2013, respectively) and other ancillary revenues such as conference center, market, parking, telephone and cancellation fees (8.7% and 7.6% of total revenues for the year ended December 31, 2014 and 2013, respectively). The increase compared to 2013 is primarily driven by higher occupancy and group related revenue, such as group meetings and conferences, at the Georgia Tech Hotel.

Hotel operating expenses increased slightly for the year ended December 31, 2014 compared to the year ended December 31, 2013 mainly due to increased room and other property-level expenses at the Baltimore Courtyard and Georgia Tech Hotel as a result of higher occupancy.

Cash Flows for the Period from March 21 to December 31, 2014

Net cash used in operating activities for the period from March 21 to December 31, 2014 was $9.7 million. Cash outflows were primarily driven by a net loss of $14.8 million, which was, in turn, largely the result of the amount of transaction fees related to the acquisition of the Barceló Portfolio and the Grace Acquisition and an increase in prepaid expenses and other assets of $7.9 million as a result of prepaid acquisition expenses for the Grace Acquisition and the receivable from the Dealer Manager for the shares sold on the last day of the year of $1.6 million. These were offset by depreciation and amortization of $2.8 million, an increase in due to affiliates of $5.0 million, mainly related to services provided to us related to the Grace Acquisition and an increase in accounts payable and accrued expenses of $5.0 million related to the deferred payment and contingent consideration from the acquisition of the Barceló Portfolio.

Net cash used in investing activities for the period from March 21 to December 31, 2014 was $122.1 million. Cash outflows were primarily driven by the acquisition of the Barceló Portfolio for $41.4 million, the deposit on the Grace Acquisition of $75.0 million, an increase in restricted cash of $2.0 million related to requirements of the new mortgage note payable and $3.7 million of improvements at the properties, primarily due to renovations at the Stratford Homewood Suites.

Net cash provided by financing activities for the period from March 21 to December 31, 2014 was $263.6 million. Cash inflows were primarily driven by proceeds from the mortgage note payable of $45.5 million and proceeds from the issuance of common stock of $249.6 million. These were offset by the payment of offering costs of $28.1 million and the payment of deferred financing fees of $2.6 million. During the period from March 21 to December 31, 2014, we received proceeds of $40.5 million from an affiliate note payable to fund the deposit on the Grace Acquisition which was then repaid in full.

Cash Flows for the Predecessor for the Year Ended December 31, 2013

Net cash provided by operating activities for the year ended December 31, 2013 was $5.8 million. Cash inflows were primarily driven by depreciation and amortization of $5.1 million, offset by a decrease in accounts payable and accrued expenses of $0.2 million and in prepaid expenses and other assets of $0.5 million.

Net cash used in investing activities for the year ended December 31, 2013 was $2.3 million. Cash outflows primarily were driven by the purchases of property and equipment related to renovations at the Baltimore Courtyard of $3.4 million and a decrease in restricted cash of $1.2 million.

Net cash used by financing activities for the year ended December 31, 2013 was $0.7 million. Cash inflows were primarily driven by contributions from the members of the Predecessor of $0.2 million and proceeds from the mortgage note payable of $3.4 million which was used to pay for the Baltimore Courtyard renovations. These were offset by distributions to the members of the Predecessor of $3.9 million and $0.4 million of repayments of the mortgage note payable.

Liquidity and Capital Resources

We are offering and selling to the public in our primary offering up to 80,000,000 shares of our common stock at up to $25.00 per share (subject to certain volume discounts). We also are offering up to 21,052,631 shares of common stock under our DRIP, initially at $23.75 per share, which is 95.0% of the primary offering price. We reserve the right to reallocate the shares of common stock we are offering between our primary offering and the DRIP.

On February 3, 2014, we had raised proceeds sufficient to break escrow in connection with our Offering. We received and accepted aggregate subscriptions in excess of the $2.0 million minimum and issued shares of common stock to our initial investors who were simultaneously admitted as stockholders. We purchased our first properties and commenced our real estate operation on March 21, 2014. As of December 31, 2014, we owned the Barceló Portfolio through fee simple, leasehold and joint venture interests with an aggregate purchase price of approximately $110.1 million. As of December 31, 2014, we had 10.2 million shares of common stock outstanding, including share issued under the DRIP for total gross proceeds of $252.9 million since the date of inception.

As of December 31, 2014, we had cash of $131.9 million and our principal demands for cash were to fund the portion of the purchase price of the Grace Acquisition we expected to cover with cash generated through the Offering and to pay our operating and administrative expenses, continuing debt service obligations and distributions to our stockholders.

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We expect to make substantial capital improvements to our hotel properties, including the hotels in the Grace Portfolio. In connection with the acquisition of the Grace Portfolio, our franchisors required property improvements plans, or PIPs, which set forth their renovation requirements. In addition, pursuant to the terms of the Assumed Grace Indebtedness, we are required to make an aggregate of $73.5 million in periodic PIP reserve deposits during 2015 and 2016 to cover a portion of the estimated costs of the PIPs on the total 96 hotels collateralizing that debt. In addition, pursuant to a guaranty entered into in connection with the Assumed Grace Indebtedness, we are required to guarantee the difference between (i) the cost of the PIPs with respect to those 96 hotels during the 24-month period following the acquisition of the Grace Portfolio, estimated to be $102.0 million, and (ii) the amount actually deposited into the PIP reserve with respect to the Assumed Grace Indebtedness. Pursuant to the terms of the Additional Grace Mortgage Loan, we are required to make an aggregate of $20.0 million in periodic PIP reserve deposits during 2015 and 2016 to cover a portion of the estimated costs of the PIPs on the total 21 hotels collateralizing that debt. The Grace Indebtedness also requires us to deposit 4.0% of the gross revenue of the hotels into a separate account for the ongoing replacement or refurbishment of furniture, fixtures and equipment at the hotels. We expect to fund capital expenditure from proceeds from the Offering and cash provided by operations. However, if liquidity from these sources is insufficient to cover our commitments, it may be necessary to obtain additional funds by borrowing, refinancing properties or liquidating our investment in one or more properties. There is no assurance that such funds will be available, or if available, that the terms will be acceptable to us or commercially reasonable.

We have acquired, and intend to continue acquiring our assets with cash and mortgage or other debt, but we also may acquire assets free and clear of permanent mortgage or other indebtedness by paying the entire purchase price for the asset in cash or in OP Units.

We use debt financing as a source of capital. Under our charter, the maximum amount of our total indebtedness may not exceed 300% of our total "net assets" (as defined in our charter) as of the date of any borrowing, which is generally expected to be approximately 75% of the cost of our investments; however, we may exceed that limit if such excess is approved by a majority of our independent directors and disclosed to stockholders in our next quarterly report following such borrowing along with justification for exceeding such limit. This charter limitation, however, does not apply to individual real estate assets or investments.

Prior to our entry into the Grace Acquisition agreement in May 2014, a majority of our independent directors waived the total portfolio leverage requirement of our charter with respect to the Grace Acquisition should such total portfolio leverage exceed 300% of our total “net assets” (as defined in our charter) upon closing of the Grace Acquisition.

As of December 31, 2014, we had a secured mortgage note payable of $45.5 million and promissory notes payable of $64.8 million. As of February 27, 2015, our debt obligations had increased to $1,688.3 million (including the Grace Preferred Equity Interests, which are treated as debt for accounting purposes) due to the acquisition of the Grace Portfolio. Accordingly, following the acquisition of the Grace Portfolio, our total portfolio leverage (which includes the Grace Preferred Equity Interests) significantly exceeded this 300% limit, and we expect it will continue to do so for some time. We intend to use substantially all available offering proceeds following the Grace Acquisition to reduce our borrowings to our intended limit, which is below the 300% maximum limit. Following the acquisition of the Grace Portfolio in February 2015, the principal amount of our outstanding secured financing, which excludes the Grace Preferred Equity Interests, is approximately 60% of the total value of our real estate investments and our other assets.

As of December 31, 2014, all of the cash distributions paid since the commencement of the Offering had been funded from Offering proceeds including Offering proceeds which were reinvested in common stock issued pursuant to the DRIP. We anticipate that, following the completion of the Grace Acquisition, adequate cash will be generated from operations to fund our operating and administrative expenses, continuing debt service obligations and the payment of distributions, but there is no assurance we will be able to do so. Our ability to finance our operations is subject to some uncertainties. Our ability to generate working capital is dependent on our ability to attract and retain hotel brands and the economic and business environments of the various markets in which our properties are located. Our ability to sell our assets is partially dependent upon the state of real estate markets and the ability of purchasers to obtain financing at reasonable commercial rates, as well as our ability to obtain the consent of the holders of the Grace Preferred Equity Interests with respect to some of our properties and to meet any applicable requirements of the Grace Indebtedness. In general, our policy will be to pay distributions from cash flow from operations. However, if we have not generated sufficient cash flow from our operations and other sources, such as from borrowings, advances from our Advisor, our Advisor’s deferral, suspension and/or waiver of its fees and expense reimbursements, to fund distributions, we may use and have used the Offering proceeds. Moreover, our board of directors may change this policy, in its sole discretion, at any time.

Potential future sources of capital include secured or unsecured financings from banks or other lenders, establishing additional lines of credit, proceeds from the sale of properties and undistributed cash flow. Note that, currently, we have not identified any additional sources of financing and there is no assurance that such sources of financings will be available on favorable terms or at all.

Acquisitions

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Our Advisor evaluates potential acquisitions of real estate and real estate related assets and engages in negotiations with sellers and borrowers on our behalf.  Investors should be aware that after a purchase contract is executed that contains specific terms, the property will not be purchased until the successful completion of due diligence and fully negotiated binding agreements. During this period, we may decide to temporarily invest any unused proceeds from common stock offerings in certain investments that could yield lower returns than the properties. These lower returns may affect our ability to make distributions.

Funds from Operations and Modified Funds from Operations

Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts ("NAREIT"), an industry trade group, has promulgated a measure known as funds from operations ("FFO"), which we believe to be an appropriate supplemental measure to reflect the operating performance of a REIT. The use of FFO is recommended by the REIT industry as a supplemental performance measure. FFO is not equivalent to our net income or loss as determined under GAAP.

We define FFO, a non-GAAP measure, consistent with the standards established by the White Paper on FFO approved by the Board of Governors of NAREIT, as revised in February 2004 (the "White Paper"). The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding gains or losses from sales of real estate and asset impairment writedowns, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO. Our FFO calculation complies with NAREIT’s policy described above.

The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time, especially if such assets are not adequately maintained or repaired and renovated as required by relevant circumstances and/or expected by customers or franchisors for operational purposes in order to maintain the value disclosed. We believe that, since real estate values historically rise and fall with market conditions, including inflation, interest rates, the business cycle, unemployment and consumer spending, presentations of operating results for a REIT using historical accounting for depreciation may not be fully informative. Additionally, we believe it is appropriate to disregard impairment charges, as this is a fair value adjustment that is largely based on market fluctuations and assessments regarding general market conditions which can change over time. An asset will only be evaluated for impairment if certain impairment indicators exist and if the carrying, or book value, exceeds the total estimated undiscounted future cash flows (including operating revenues, net proceeds on the sale of the property, and any other ancillary cash flows at a property or group level under GAAP) from such asset. Determinations of whether impairment charges have been incurred are based partly on anticipated operating performance, because estimated undiscounted future cash flows from a property, including estimated future net operating revenues, net proceeds on the sale of the property, and certain other ancillary cash flows, are taken into account in determining whether an impairment charge has been incurred. While impairment charges are excluded from the calculation of FFO as described above, because impairments are based on estimated undiscounted future cash flows and the relatively limited term of our operations, it could be difficult to recover any impairment charges.

Historical accounting for real estate involves the use of GAAP. Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in GAAP. Nevertheless, we believe that the use of FFO, which excludes the impact of depreciation and amortization and impairments, provides a more complete understanding of our performance to investors and to management, and when compared year over year, reflects the impact on our operations from trends in occupancy rates, ADR, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income. However, FFO and modified funds from operations ("MFFO"), as described below, should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income or in its applicability in evaluating our operating performance. The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the non-GAAP FFO and MFFO measures and the adjustments to GAAP in calculating FFO and MFFO.

There have been changes in the accounting and reporting promulgations under GAAP that were put into effect in 2009 subsequent to the establishment of NAREIT's definition of FFO, such as the change to expense as incurred rather than capitalize and depreciate acquisition fees and expenses incurred for business combinations. Management believes these fees and expenses do not affect our overall long-term operating performance. Publicly registered, non-listed REITs typically have a significant amount of acquisition activity and are substantially more dynamic during their initial years of investment and operation, but have a limited and defined acquisition period. Due to the above factors and other unique features of publicly registered, non-listed REITs, the Investment Program Association (the "IPA"), an industry trade group, has standardized a measure known as MFFO, which the IPA has recommended as a supplemental measure for publicly registered non-listed REITs and which we believe to be another appropriate supplemental measure to reflect the operating performance of a non-listed REIT having the characteristics described above. MFFO is not equivalent to our net income or loss as determined under GAAP,

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and MFFO may not be a useful measure of the impact of long-term operating performance on value if we continue to purchase a significant amount of new assets. We believe that, because MFFO excludes costs that we consider more reflective of investing activities and other non-operating items included in FFO and also excludes acquisition fees and expenses that affect operations only in periods in which properties are acquired, MFFO can provide, on a going forward basis, an indication of the sustainability (that is, the capacity to continue to be maintained) of our operating performance after the period in which we are acquiring properties and once our portfolio is stabilized. By providing MFFO, we believe we are presenting useful information that assists investors and analysts to better assess the sustainability of our operating performance after our offering has been completed and our portfolio has been stabilized. We also believe that MFFO is a recognized measure of sustainable operating performance by the non-listed REIT industry.

We define MFFO, a non-GAAP measure, consistent with the IPA’s Guideline 2010-01, Supplemental Performance Measure for Publicly Registered, Non-Listed REITs: Modified Funds from Operations, or the Practice Guideline, issued by the IPA in November 2010. The Practice Guideline defines MFFO as FFO further adjusted for the following items, as applicable, included in the determination of GAAP net income: acquisition fees and expenses; amounts relating to amortization of above and below market leases and liabilities (which are adjusted in order to reflect such payments from a GAAP accrual basis to a cash basis of disclosing the lease payments); accretion of discounts and amortization of premiums on debt investments; mark-to-market adjustments included in net income; gains or losses included in net income from the extinguishment or sale of debt, hedges, foreign exchange, derivatives or securities holdings where trading of such holdings is not a fundamental attribute of the business plan, unrealized gains or losses resulting from consolidation from, or deconsolidation to, equity accounting, and after adjustments for consolidated and unconsolidated partnerships and joint ventures, with such adjustments calculated to reflect MFFO on the same basis. The accretion of discounts and amortization of premiums on debt investments, gains and losses on hedges, foreign exchange, derivatives or securities holdings, unrealized gains and losses resulting from consolidations, as well as other listed cash flow adjustments are adjustments made to net income in calculating the cash flows provided by operating activities and, in some cases, reflect gains or losses which are unrealized and may not ultimately be realized.

Our MFFO calculation complies with the IPA’s Practice Guideline described above. In calculating MFFO, we exclude acquisition related expenses, fair value adjustments of derivative financial instruments and the adjustments of such items related to noncontrolling interests. Under GAAP, acquisition fees and expenses are characterized as operating expenses in determining operating net income during the period in which the asset is acquired. These expenses are paid in cash by us and therefore such funds will not be available to invest in other assets, pay operating expenses or fund distributions. MFFO that excludes such costs and expenses would only be comparable to that of non-listed REITs that have completed their acquisition activities and have similar operating characteristics as us. Further, under GAAP, certain contemplated non-cash fair value and other non-cash adjustments are considered operating non-cash adjustments to net income in determining cash flow from operating activities. In addition, we view fair value adjustments of derivatives as items which are unrealized and may not ultimately be realized. We view both gains and losses from dispositions of assets and fair value adjustments of derivatives as items which are not reflective of ongoing operations and are therefore typically adjusted for when assessing operating performance. While we are responsible for managing interest rate, hedge and foreign exchange risk, we will retain an outside consultant to review all our hedging agreements. Inasmuch as interest rate hedges are not a fundamental part of our operations, we believe it is appropriate to exclude such gains and losses in calculating MFFO, as such gains and losses are not reflective of ongoing operations. The purchase of properties, and the corresponding expenses associated with that process, is a key operational feature of our business plan to generate operational income and cash flows in order to make distributions to investors.

We believe that management’s use of MFFO and the adjustments used to calculate it allow us to present our performance in a manner that reflects certain characteristics that are unique to non-listed REITs, which have defined acquisition periods and targeted exit strategies, and allow us to evaluate our performance against other non-listed REITs. For example, acquisitions costs are funded from the proceeds of our Offering and other financing sources and not from operations. By excluding expensed acquisition costs, the use of MFFO provides information consistent with management’s analysis of the operating performance of the properties.

Presentation of this information is intended to provide useful information to investors as they compare the operating performance of different REITs, although it should be noted that not all REITs calculate FFO and MFFO the same way. Accordingly, comparisons with other REITs may not be meaningful. Furthermore, FFO and MFFO are not necessarily indicative of cash flow available to fund cash needs and should not be considered as an alternative to net income (loss) or income (loss) from continuing operations as an indication of our performance, as an alternative to cash flows from operations, as an indication of our liquidity, or indicative of funds available to fund our cash needs including our ability to make distributions to our stockholders. FFO and MFFO should be reviewed in conjunction with other GAAP measurements as an indication of our performance. MFFO has limitations as a performance measure in an ongoing offering such as our Offering where the price of a share of common stock is a stated value and there is no NAV determination during the offering phase, except to the extent we commence calculating NAV prior to the closing of our Offering.

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Neither the SEC, NAREIT nor any other regulatory body has passed judgment on the acceptability of the adjustments that we use to calculate FFO or MFFO. In the future, the SEC, NAREIT or another regulatory body may decide to standardize the allowable adjustments across the non-listed REIT industry and we would have to adjust our calculation and characterization of FFO or MFFO.

The table below reflects the items deducted or added to net loss in our calculation of FFO and MFFO for the period from March 21 to December 31, 2014 (in thousands)⁽¹⁾:

	For the Period from March 21 to December 31, 2014
Net loss (in accordance with GAAP)	$	(14,841	)
Depreciation and amortization	2,796
Depreciation and amortization of unconsolidated entities	343
FFO	(11,702		)
Acquisition fees and expenses	10,884
Amortization of below-market lease obligation	340
MFFO	$	(478	)

__________________________________________________________________________

⁽¹⁾ The results for the Predecessor have not been presented as the Predecessor was not a REIT.

Distributions

On February 3, 2014, our board of directors declared distributions payable to stockholders of record each day during the applicable month at a rate equal to $0.00465753425 per day, or $1.70 per annum, per share of common stock. The first distribution was paid in May 2014 to record holders in April 2014. The distributions are payable by the fifth day following each month end to stockholders of record at the close of business each day during the prior month.

The below table shows the distributions paid on shares outstanding during the year ended December 31, 2014 (in thousands).

Payment Date	Weighted Average Shares Outstanding (1)	Amount Paid in Cash		Amount Issued under DRIP
January 2, 2014	—	$	—	$	—
February 3, 2014	9	—		—
March 3, 2014	88	—		—
April 1, 2014	111	—		—
May 1, 2014	182	21		5
June 2, 2014	378	41		15
July 2, 2014	637	61		31
August 1, 2014	1,457	141		83
September 2, 2014	2,715	238		167
October 1, 2014	4,252	342		264
November 3, 2014	6,189	486		415
December 1, 2014	8,257	620		540
Total		$	1,950	$	1,520

_____________________________________________________________________

⁽¹⁾ Represents the weighted average shares outstanding for the month related to the respective payment date.

The following table shows the sources for the payment of distributions to common stockholders for the years presented (in thousands)⁽¹⁾:

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	Year Ended December 31,
	2014					2013
Distributions:
Cash distributions paid	$	1,950				$	—
Distributions reinvested	1,520					—
Total distributions	$	3,470				$	—
Source of distribution coverage:
Cash flows provided by operations	$	—		—	%	$	—	—	%
Proceeds from issuance of common stock, including offering proceeds which were reinvested in common stock issued pursuant to the DRIP	3,470			100.0	%	—		—	%
Total sources of distributions	$	3,470		100.0	%	$	—	—	%
Cash flows used in operations (GAAP)	$	(9,650	)			$	—
Net loss (GAAP)	$	(14,841	)			$	—

______________________________________________________________________________________________

⁽¹⁾ The results for the Predecessor were not included in the above table as these results would not impact the sources of distributions.

The following table compares cumulative distributions paid to cumulative net income (in accordance with GAAP) for the period from July 25, 2013 (date of inception) through December 31, 2014 (in thousands)⁽¹⁾:

	For the Period from July 25, 2013 (date of inception) to
	December 31, 2014
Distributions paid:
Common stockholders in cash and DRIP	$	3,470
Total distributions paid	$	3,470
Reconciliation of net loss:
Revenues	$	34,871
Depreciation and amortization	(2,796		)
Other operating expenses	(27,622		)
Acquisition and transaction related	(10,884		)
Other non-operating expenses	(7,825		)
Income tax	(591		)
Net loss (in accordance with GAAP)	$	(14,847	)
Cash flows used in operations	$	(9,651	)
FFO	$	(11,708	)

___________________________________________________________________________

⁽¹⁾ The results for the Predecessor were not included in the above table as these results would not impact the sources of distributions.

For the period from our inception in July 2013 through December 31, 2014, we funded all of our distributions with proceeds from our IPO, including proceeds from our IPO which were reinvested in common stock issued pursuant to our DRIP. To the extent we pay distributions in excess of cash flows provided by operations, our stockholders' investment in our common stock may be adversely impacted. See "Risk Factors - Distributions paid from sources other than our cash flows from operations, particularly from proceeds of our IPO, will result in us having fewer funds available for the acquisition of properties and other real estate-related investments and may dilute our stockholders' interests in us, which may adversely affect our ability to fund future distributions with cash flows from operations and may adversely affect our stockholders' overall return." under Item 1A in this Annual Report on Form 10-K.

Contractual Obligations

We have the following contractual obligations as of December 31, 2014:

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Debt Obligations:

The following is a summary of our mortgage note payable obligation as of December 31, 2014 (in thousands):

	Total		2015		2016-2018		2019
Principal payments due on mortgage note payable	$	45,500	$	—	$	—	$	45,500
Interest payments due on mortgage note payable	8,598		1,984		5,956		658
Total	$	54,098	$	1,984	$	5,956	$	46,158

Interest payments due on our mortgage note payable are held in a restricted depository account at the lender during the month prior to being due to the lender.

The following is a summary of our promissory notes payable obligations as of December 31, 2014 (in thousands):

	Total		2015		2016-2018		2019
Principal payments due on promissory notes payable (1)	$	64,849	$	63,074	$	—	$	1,775
Interest payments due on promissory notes payable (1)	2,157		1,880		243		34
Total	$	67,006	$	64,954	$	243	$	1,809

_________________________________________________________________________

⁽¹⁾ The promissory notes for the acquisition of the Barceló Portfolio (the "Barceló Promissory Note") originally consisted of the Portfolio Owned Assets and Joint Venture Assets promissory notes which had a maturity date of within ten business days upon the Company raising equal to or greater than $150.0 million in common equity from the Offering. During the year ended December 31, 2014, the Company entered into an amendment to the Portfolio Owned Assets and Joint Venture Assets promissory notes whereby the promissory notes were combined into one note with an outstanding principal amount of $63.1 million. The maturity date of the Barceló Portfolio promissory notes is within ten business days upon our company raising equal to or greater than $70.0 million in gross proceeds from the Offering in common equity from the Offering after the closing of the Grace Acquisition, and payment of all acquisition related expenses (including payments to our Advisor and its affiliates), which has not yet occurred. There are no principal payments under the Barceló Promissory Note payable for 2014 and 2015, unless the contingent payment feature above is satisfied by raising equal to or greater than $70.0 million in common equity from the Offering after the closing of the Grace Acquisition and payment of all acquisition related expenses (including payments to our Advisor and its affiliates). We anticipate the full principal repayment will occur by the end of the second quarter of 2015.

Lease Obligations:

The following table reflects the minimum base rental cash payments due from us over the next five years and thereafter for our lease arrangements as of December 31, 2014 (in thousands):

	Total		2015		2016-2018		2019		Thereafter
Lease payments due on Georgia Tech Hotel lease	$	82,133	$	4,400	$	13,200	$	4,400	$	60,133

Election as a REIT

We intend to elect and qualify to be taxed as a REIT commencing with our taxable year ended December 31, 2014. In order to qualify as a REIT, we must annually distribute to our stockholders 90% of our REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding net capital gain. If we qualify as a REIT, we generally will not be subject to U.S. federal income tax on that portion of our taxable income or capital gain which is distributed to our stockholders. Our hotels are leased to a TRS which is owned by the OP. A TRS is subject to federal, state and local income taxes. If we fail to remain qualified for taxation purposes as a REIT in any subsequent year after electing REIT status and do not qualify for certain statutory relief provisions, our income for that year will be taxed at regular corporate rates, and we may be precluded from qualifying for treatment as a REIT for the four-year period following our failure to qualify as a REIT. Such an event could materially and adversely affect our net income and cash available for distribution. However, we believe that we will be organized and will operate in a manner that will enable us to qualify for treatment as a REIT beginning with our taxable year ended December 31, 2014 and we intend to continue to operate so as to remain qualified as a REIT thereafter.

59

Inflation

We may be adversely impacted by increases in operating costs due to inflation that may not be offset by increased room rates.

Related Party Transactions and Agreements

We have entered into agreements with affiliates of our Sponsor, whereby we may pay certain fees or reimbursements to our Advisor, its affiliates and entities under common control with our Advisor in connection with acquisition and financing activities, sales and maintenance of common stock under our Offering, transfer agency services, asset and property management services and reimbursement of operating and offering related costs. See Note 12 - Related Party Transactions and Arrangements to our accompanying consolidated/combined financial statements included in this Annual Report on Form 10-K for a discussion of the various related party transactions, agreements and fees.

In connection with the Grace Acquisition, we estimate we will pay approximately $46.0 million to our Advisor, its affiliates and entities under common control with our Advisor.

Also in connection with the financing of the Grace Acquisition and the acquisition of the Barceló Portfolio, certain individual principals of the parent of our Sponsor, namely Nicholas Schorsch, William Kahane, Michael Weil and Peter Budko, were required to provide certain personal guarantees and indemnities.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

The market risk associated with financial instruments and derivative financial instruments is the risk of loss from adverse changes in market prices or interest rates. Our long-term debt, which consists of secured financings, bears interest at fixed rates. Our interest rate risk management objectives are to limit the impact of interest rate changes in earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, from time to time, we may enter into interest rate hedge contracts such as swaps, collars and treasury lock agreements in order to mitigate our interest rate risk with respect to various debt instruments. We would not hold or issue these derivative contracts for trading or speculative purposes. We may also be exposed to foreign currency fluctuations as a result of any investments in hotels located in Canada and Mexico.

As of December 31, 2014, our debt included a fixed-rate secured mortgage financing, with a carrying value and fair value of $45.5 million and $44.6 million, respectively, and fixed-rate promissory note financing, with a carrying value and fair value of $64.8 million. Changes in market interest rates on our fixed-rate debt impact the fair value of the notes, but they have no impact on interest incurred or cash flow. For instance, if interest rates rise 100 basis points and our fixed rate debt balance remains constant, we expect the fair value of our obligation to decrease, the same way the price of a bond declines as interest rates rise. The sensitivity analysis related to our fixed–rate debt assumes an immediate 100 basis point move in interest rates from their December 31, 2014 levels, with all other variables held constant. A 100 basis point increase in market interest rates would result in a decrease in the fair value of our fixed-rate mortgage debt by $1.7 million. A 100 basis point decrease in market interest rates would result in an increase in the fair value of our fixed-rate mortgage debt by $1.8 million.

These amounts were determined by considering the impact of hypothetical interest rate changes on our borrowing costs, and, assuming no other changes in our capital structure. As the information presented above includes only those exposures that existed as of December 31, 2014, it does not consider exposures or positions arising after that date. The information represented herein has limited predictive value. Future actual realized gains or losses with respect to interest rate fluctuations will depend on cumulative exposures, hedging strategies employed and the magnitude of the fluctuations.

Item 8. Financial Statements and Supplementary Data.

See our Consolidated Financial Statements beginning on page F-1 of this Annual Report on Form 10-K.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

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Item 9A. Controls and Procedures.

Disclosure Controls and Procedures

In accordance with Rules 13a-15(b) and 15d-15(b) of the Exchange Act, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded, as of the end of such period, that our disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in our reports that we file or submit under the Exchange Act.

Internal Control Over Financial Reporting

Management's Annual Reporting on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act.

In connection with the preparation of our Form 10-K, our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2014. In making that assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (1992).

Based on its assessment, our management concluded that, as of December 31, 2014, our internal control over financial reporting was effective.

The rules of the SEC do not require, and this annual report does not include, an attestation report of our independent registered public accounting firm regarding internal control over financial reporting.

Changes in Internal Control Over Financial Reporting

During the fourth quarter of fiscal year ended December 31, 2014, there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item9B. Other Information.

None.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance.

We have adopted a Code of Ethics that applies to all of our executive officers and directors, including but not limited to, our principal executive officer and principal financial officer. A copy of our Code of Ethics may be obtained, free of charge, by sending a written request to our executive office at 405 Park Avenue, 14th Floor, New York, NY 10022, Attention: Chief Financial Officer.

The information required by this Item is incorporated by reference to our definitive proxy statement to be filed with the SEC with respect to our 2015 annual meeting of stockholders.

Item 11. Executive Compensation.

The information required by this Item is incorporated by reference to our definitive proxy statement to be filed with the SEC with respect to our 2015 annual meeting of stockholders.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this Item is incorporated by reference to our definitive proxy statement to be filed with the SEC with respect to our 2015 annual meeting of stockholders.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information required by this Item is incorporated by reference to our definitive proxy statement to be filed with the SEC with respect to our 2015 annual meeting of stockholders.

Item 14. Principal Accounting Fees and Services.

The information required by this Item is incorporated by reference to our definitive proxy statement to be filed with the SEC with respect to our 2015 annual meeting of stockholders.

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PART IV

Item 15. Exhibits and Financial Statement Schedules.

(a) Financial Statement Schedules

See the Index to Consolidated/Combined Financial Statements at page F-1 of this report.

The following financial statement schedule is included herein at page F-32 of this report:

Schedule III — Real Estate and Accumulated Depreciation

(b) Exhibits

EXHIBIT INDEX

The following exhibits are included in this Annual Report on Form 10-K for the year ended December 31, 2014 (and are numbered in accordance with Item 601 of Regulation S-K).

Exhibit No.	Description
1.1 (4)	Exclusive Dealer Manager Agreement, dated as of January 7, 2014, among the Company, American Realty Capital Hospitality Advisors, LLC and Realty Capital Securities, LLC
3.1 (3)	Articles of Amendment and Restatement of American Realty Capital Hospitality Trust, Inc.
3.2 (1)	Bylaws of American Realty Capital Hospitality Trust, Inc.
4.1 (4)	Agreement of Limited Partnership of American Realty Capital Hospitality Operating Partnership, L.P., dated as of January 7, 2014
10.1 (4)	Advisory Agreement dated as of January 7, 2014, by and among the Company, American Realty Capital Hospitality Operating Partnership, L.P. and American Realty Capital Hospitality Advisors, LLC.
10.2 (7)	Employee and Director Incentive Restricted Share Plan of the Company
10.3 (3)	Form of Restricted Share Award Agreement Pursuant to the Employee and Director Incentive Restricted Share Plan of the Company.
10.4 (2)	Form Operating Lease Agreement between the Company and the Company’s TRSs.
10.5 (4)	Agreement of Purchase and Sale, dated January 30, 2014, by and between Barceló Crestline Corporation and ARC Hospitality TRS Holding, LLC
10.6 (4)	Agreement of Purchase and Sale, dated January 30, 2014, by and between HFP Hotel Owner II, LLC, CSB Stratford, LLC, CC Technology Square, LLC, ARC Hospitality Baltimore LLC, ARC Hospitality Providence LLC, ARC Hospitality Stratford LLC and ARC Hospitality TRS GA Tech LLC.
10.7 (4)	First Amendment to Agreement of Purchase and Sale, dated March 11, 2014, by and between Barceló Crestline Corporation and ARC Hospitality TRS Holding, LLC
10.8 (4)	First Amendment to Agreement of Purchase and Sale, dated March 11, 2014, by and between HFP Hotel Owner II, LLC, CSB Stratford, LLC, CC Technology Square, LLC, ARC Hospitality Baltimore LLC, ARC Hospitality Providence LLC, ARC Hospitality Stratford LLC and ARC Hospitality TRS GA Tech LLC
10.9 (4)	Second Amendment to Agreement of Purchase and Sale, dated March 21, 2014, by and between HFP Hotel Owner II, LLC, CSB Stratford, LLC, CC Technology Square, LLC, ARC Hospitality Baltimore LLC, ARC Hospitality Providence LLC, ARC Hospitality Stratford LLC and ARC Hospitality TRS GA Tech LLC
10.10 (4)	Promissory Note, dated March 21, 2014, given by American Realty Capital Hospitality Operating Partnership L.P. in favor of Crestline Hotels & Resorts, LLC
10.11 (4)	Promissory Note, dated March 21, 2014, given by American Realty Capital Hospitality Operating Partnership L.P. in favor of Barceló Crestline Corporation
10.12 (4)	Promissory Note, dated March 21, 2014, given by American Realty Capital Hospitality Operating Partnership L.P. in favor of Barceló Crestline Corporation

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Exhibit No.	Description
10.13 (5)	Loan Agreement dated as of March 21, 2014 between GERMAN AMERICAN CAPITAL CORPORATION, ARC HOSPITALITY BALTIMORE, LLC and ARC HOSPITALITY PROVIDENCE, LLC
10.14 (5)	Guaranty of Recourse Obligations dated as of March 21, 2014 by AMERICAN REALTY CAPITAL HOSPITALITY OPERATING PARTNERSHIP, L.P., AR CAPITAL, LLC and certain individuals for the benefit of GERMAN AMERICAN CAPITAL CORPORATION
10.15 (4)	Guaranty of Recourse Obligations dated as of April 8, 2014 by DANIEL A. HOFFLER, LOUIS S. HADDAD and AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC. for the benefit of GERMAN AMERICAN CAPITAL CORPORATION
10.16 (5)	PERMANENT LOAN CROSS INDEMNITY dated as of April 1, 2014, by TCA BLOCK 7, INC., ARMADA/HOFFLER PROPERTIES II, L.L.C., DANIEL A. HOFFLER, LOUIS S. HADDAD , CHRI VIRGINIA BEACH HOTEL (A/H) MINORITY HOLDING, LLC, AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC., HAMPTON W COMPANY, LLC, HAMPTON UNIVERSITY, LEGACY HOSPITALITY, LLC, and VB CITY HOTELS LLC.
10.17 (5)	Promissory Note, dated May 27, 2014, given by American Realty Capital Hospitality Trust, Inc. in favor of CARP, LLC
10.18 (6)	First Amendment to Promissory Notes, dated August 25, 2014, between American Realty Capital Hospitality Operating Partnership, L.P. and Barceló Crestline Corporation
10.19 (6)	Amended and Restated Real Estate Sale Agreement, dated November 11, 2014, by and among American Realty Capital Hospitality Portfolio Member, LLC, ARC Hospitality Portfolio I Owner, LLC, ARC Hospitality Portfolio I TFGL Owner, LLC, ARC Hospitality Portfolio I BHGL Owner, LLC, ARC Hospitality Portfolio I PXGL Owner, LLC, ARC Hospitality Portfolio I GBGL Owner, LLC, ARC Hospitality Portfolio I NFGL Owner, LLC, ARC Hospitality Portfolio I MBGL 1000 Owner, LLC, ARC Hospitality Portfolio I MBGL 950 Owner, LLC, ARC Hospitality Portfolio I NTC Owner, LP, ARC Hospitality Portfolio I DLGL Owner, LP, ARC Hospitality Portfolio I SAGL Owner, LP, ARC Hospitality Portfolio II Owner, LLC, ARC Hospitality Portfolio II NTC Owner, LP, W2007 Equity Inns Realty, LLC, W2007 Equity Inns Realty, L.P., W2007 EQI Urbana Partnership, L.P., W2007 EQI Seattle Partnership, L.P., W2007 EQI Savannah 2 Partnership, L.P., W2007 EQI Rio Rancho Partnership, L.P., W2007 EQI Orlando Partnership, L.P., W2007 EQI Orlando 2 Partnership, L.P., W2007 EQI Naperville Partnership, L.P., W2007 EQI Milford Partnership, L.P., W2007 EQI Louisville Partnership, L.P., W2007 EQI Knoxville Partnership, L.P., W2007 EQI Jacksonville Partnership I, L.P., W2007 EQI Indianapolis Partnership, L.P., W2007 EQI Houston Partnership, L.P., W2007 EQI HI Austin Partnership, L.P., W2007 EQI East Lansing Partnership, L.P., W2007 EQI Dalton Partnership, L.P., W2007 EQI College Station Partnership, L.P., W2007 EQI Carlsbad Partnership, L.P., W2007 EQI Augusta Partnership, L.P. and W2007 EQI Asheville Partnership, L.P.
10.20 (8)	Indemnification Agreement between American Realty Capital Hospitality Trust, Inc. and each of Robert H. Burns, Edward T. Hoganson, William M. Kahane, Jonathan P. Mehlman, Stanley R. Perla, Abby M. Wenzel, certain other individuals who are former directors and officers of American Realty Capital Hospitality Trust, Inc., American Realty Capital Hospitality Advisors, LLC, AR Capital, LLC and RCS Capital Corporation, dated as of December 31, 2014
10.21 (8)	Amended and Restated Limited Liability Company Agreement of ARC Hospitality Portfolio I Holdco, LLC dated February 27, 2015
10.22 (8)	Amended and Restated Limited Liability Company Agreement of ARC Hospitality Portfolio II Holdco, LLC dated February 27, 2015
10.23 (8)	Assumption and Release Agreement (Mezzanine) dated February 27, 2015 by and among WNT MEZZ I, LLC, ARC HOSPITALITY PORTFOLIO I MEZZ, LP, U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-MZ MEZZANINE TRUST, COMMERCIAL MEZZANINE PASS-THROUGH CERTIFICATES, WHITEHALL STREET GLOBAL REAL ESTATE LIMITED PARTNERSHIP 2007, and WHITEHALL PARALLEL GLOBAL REAL ESTATE LIMITED PARTNERSHIP 2007, AMERICAN REALTY CAPITAL HOSPITALITY OPERATING PARTNERSHIP, L.P., and AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

64

Exhibit No.	Description
10.24 (8)	Assumption and Release Agreement dated February 27, 2015 by and among W2007 EQUITY INNS REALTY, LLC, W2007 EQUITY INNS REALTY, L.P., ARC HOSPITALITY PORTFOLIO I OWNER, LLC, ARC HOSPITALITY PORTFOLIO I BHGL OWNER, LLC, ARC HOSPITALITY PORTFOLIO I PXGL OWNER, LLC, ARC HOSPITALITY PORTFOLIO I GBGL OWNER, LLC, ARC HOSPITALITY PORTFOLIO I NFGL OWNER, LLC, ARC HOSPITALITY PORTFOLIO I MBGL 1000 OWNER, LLC, ARC HOSPITALITY PORTFOLIO I MBGL 950 OWNER, LLC, ARC HOSPITALITY PORTFOLIO I NTC OWNER, LP, ARC HOSPITALITY PORTFOLIO I DLGL OWNER, LP, ARC HOSPITALITY PORTFOLIO I SAGL OWNER, LP, U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, WHITEHALL STREET GLOBAL REAL ESTATE LIMITED PARTNERSHIP 2007, WHITEHALL PARALLEL GLOBAL REAL ESTATE LIMITED PARTNERSHIP 2007, AMERICAN REALTY CAPITAL HOSPITALITY OPERATING PARTNERSHIP, L.P., a Delaware limited partnership and AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.
10.25 (8)	Supplemental Agreement dated February 27, 2015, by and among American Realty Capital Hospitality Operating Partnership, L.P., American Realty Capital Hospitality Trust, Inc., Nicholas S. Schorsch, William M. Kahane, Edward M. Weil, Jr., Peter M. Budko, Whitehall Street Global Real Estate Limited Partnership 2007, Whitehall Parallel Global Real Estate Limited Partnership 2007, among others.
10.26 (8)	Payment Guaranty Agreement dated as of February 27, 2015 by AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC. to and for the benefit of U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.
10.27 (8)	Loan Agreement dated as of February 27, 2015 between the borrowers listed on schedule II thereto, Ladder Capital Finance LLC and Deutsche Bank AG, New York Branch.
10.28 (8)	Guaranty dated as of February 27, 2015 by AMERICAN REALTY CAPITAL HOSPITALITY OPERATING PARTNERSHIP, L.P., AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC., Nicholas S. Schorsch, William M. Kahane, Edward M. Weil, Jr., Peter M. Budko for the benefit of W2007 EQUITY INNS SENIOR MEZZ, LLC.
10.29 (8)	Guaranty dated as of February 27, 2015, by AMERICAN REALTY CAPITAL HOSPITALITY OPERATING PARTNERSHIP, L.P., AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC., Nicholas S. Schorsch, William M. Kahane, Edward M. Weil, Jr., Peter M. Budko for the benefit of W2007 EQUITY INNS PARTNERSHIP, L.P. and W2007 EQUITY INNS TRUST.
10.30 (8)	Environmental Indemnity Agreement dated as of February 27, 2015 by AMERICAN REALTY CAPITAL HOSPITALITY OPERATING PARTNERSHIP, L.P., AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC., Nicholas S. Schorsch, William M. Kahane, Edward M. Weil, Jr., Peter M. Budko for the benefit of W2007 EQUITY INNS SENIOR MEZZ, LLC
10.31 (8)	Environmental Indemnity Agreement dated as of February 27, 2015, by AMERICAN REALTY CAPITAL HOSPITALITY OPERATING PARTNERSHIP, L.P., AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC., Nicholas S. Schorsch, William M. Kahane, Edward M. Weil, Jr., Peter M. Budko for the benefit of W2007 EQUITY INNS PARTNERSHIP, L.P. and W2007 EQUITY INNS TRUST.
10.32 (8)	Mandatory Redemption Guaranty dated as of February 27, 2015 by AMERICAN REALTY CAPITAL HOSPITALITY OPERATING PARTNERSHIP, L.P., AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC., Nicholas S. Schorsch, William M. Kahane, Edward M. Weil, Jr., Peter M. Budko for the benefit of W2007 EQUITY INNS SENIOR MEZZ, LLC
10.33 (8)	Mandatory Redemption Guaranty dated as of February 27, 2015, by AMERICAN REALTY CAPITAL HOSPITALITY OPERATING PARTNERSHIP, L.P., AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC., Nicholas S. Schorsch, William M. Kahane, Edward M. Weil, Jr., Peter M. Budko for the benefit of W2007 EQUITY INNS PARTNERSHIP, L.P. and W2007 EQUITY INNS TRUST.
16.1 (9)	Letter dated February 3, 2014 from Grant Thornton to the U.S. Securities and Exchange Commission
21.1 (8)	List of Subsidiaries
31.1 (8)	Certification of the Principal Executive Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 (8)	Certification of the Principal Financial Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

65

Exhibit No.	Description
32 (8)	Written statements of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101 (8)	XBRL (eXtensible Business Reporting Language). The following materials from American Realty Capital Hospitality Trust, Inc.'s Quarterly Report on Form 10-K for the year ended December 31, 2014, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive Loss, (iii) the Consolidated Statements of Changes in Stockholders' Equity, (iv) the Consolidated Statements of Cash Flows and (v) the Notes to the Consolidated Financial Statements.

1. Filed as an exhibit to Pre-Effective Amendment No. 1 to the Company's Registration Statement on From S-11/A with the SEC on October 4, 2013.

2. Filed as an exhibit to Pre-Effective Amendment No. 2 to the Company's Registration Statement on Form S-11/A with the SEC on November 14, 2013.

3. Filed as an exhibit to Pre-Effective Amendment No. 3 to the Company’s Registration Statement on Form S-11/A with the SEC on December 9, 2013.

4. Filed as an exhibit to the Company’s Form 10-K filed with the SEC on April 7, 2014.

5. Filed as an exhibit to the Company’s Form 10-Q filed with the SEC on August 14, 2014.

6. Filed as an exhibit to the Company’s Form 10-Q filed with the SEC on November 14, 2014.

7. Filed as an exhibit to the Company’s Form 8-A filed with the SEC on March 4, 2015.

8. Filed herewith.

9. Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on February 4, 2014.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized this 31st day of March, 2015.

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.
By	/s/ Jonathan P. Mehlman
	Jonathan P. Mehlman
	CHIEF EXECUTIVE OFFICER AND PRESIDENT

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Name	Capacity	Date
/s/ Jonathan P. Mehlman	Chief Executive Officer and President (Principal Executive Officer)	March 31, 2015
Jonathan P. Mehlman
/s/ Edward T. Hoganson	Chief Financial Officer, Treasurer and Secretary (Principal Financial Officer and Principal Accounting Officer)	March 31, 2015
Edward T. Hoganson
/s/ William M. Kahane	Executive Chairman of the Board of Directors	March 31, 2015
William M. Kahane
/s/ Stanley R. Perla	Lead Independent Director	March 31, 2015
Stanley R. Perla
/s/ Abby M. Wenzel	Independent Director	March 31, 2015
Abby M. Wenzel
/s/ Robert H. Burns	Independent Director	March 31, 2015
Robert H. Burns

67

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

INDEX TO FINANCIAL STATEMENTS

American Realty Capital Hospitality Trust, Inc.
Audited Consolidated/Combined Financial Statements:
Report of Independent Registered Public Accounting Firm	F-2
Consolidated/Combined Balance Sheets as of December 31, 2014 and December 31, 2013	F-3
Consolidated/Combined Statements of Operations and Comprehensive Income (Loss) of the Successor for the Period from March 21 to December 31, 2014 and of the Predecessor for the Period from January 1 to March 20, 2014 and for the Year Ended December 31, 2013	F-4
Consolidated/Combined Statement of Changes in Equity for the Year Ended December 31, 2014	F-5
Consolidated/Combined Statements of Cash Flows of the Successor for the Period from March 21 to December 31, 2014 and of the Predecessor for the Year Ended December 31, 2013	F-6
Notes to Consolidated/Combined Financial Statements	F-8

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

American Realty Capital Hospitality Trust, Inc.:

We have audited the accompanying consolidated balance sheet as of December 31, 2014 (successor) and the combined balance sheet as of December 31, 2013 (predecessor) of American Realty Capital Hospitality Trust, Inc. and subsidiaries, and the related consolidated statement of operations and comprehensive income (loss), changes in equity, and cash flows for the period from March 21, 2014 to December 31, 2014 (successor) and the combined statements of operations and comprehensive income (loss), changes in equity, and cash flows for the period from January 1, 2014 to March 20, 2014 and the year ended December 31, 2013 (predecessor). In connection with the audits of the consolidated and combined financial statements, we have also audited the financial statement schedule III. These consolidated and combined financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated and combined financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated and combined financial statements referred to above present fairly, in all material respects, the financial position of American Realty Capital Hospitality Trust, Inc. and subsidiaries as of December 31, 2014 and 2013, and the results of their operations and their cash flows for the period from March 20, 2014 to December 31, 2014, the period from January 1, 2014 to March 21, 2014 and the year ended December 31, 2013 in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered with relation to the basic consolidated and combined financial statements taken as a whole, presents fairly, with all material respects, the information set forth therein.

/s/ KPMG LLP

McLean, Virginia

March 31, 2015

F-2

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

CONSOLIDATED/COMBINED BALANCE SHEETS

(In thousands, except for share and per share data)

	Successor			Predecessor
	December 31, 2014			December 31, 2013
ASSETS
Real estate investments:
Land	$	12,061		$	15,878
Buildings and improvements	81,176			118,356
Furniture, fixtures and equipment	5,308			13,297
Total real estate investments	98,545			147,531
Less: accumulated depreciation and amortization	(2,796		)	(31,390		)
Total real estate investments, net	95,749			116,141
Cash and cash equivalents	131,861			10,520
Acquisition deposit	75,000			—
Restricted cash	3,437			1,522
Investments in unconsolidated entities	5,475			4,381
Below-market lease asset, net	8,060			—
Prepaid expenses and other assets	11,801			1,830
Deferred financing fees, net	1,991			848
Total Assets	$	333,374		$	135,242
LIABILITIES AND EQUITY
Mortgage note payable	$	45,500		$	41,449
Promissory notes payable	64,849			—
Accounts payable and accrued expenses	14,219			5,297
Due to affiliates	7,011			—
Total liabilities	131,579			46,746
Equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued and outstanding	—			—
Common stock, $0.01 par value, 300,000,000 shares authorized, 10,163,206 and 8,888 shares issued and outstanding, respectively	102			—
Additional paid-in capital	221,379			—
Deficit	(19,686		)	—
Members' equity	—			88,496
Total equity	201,795			88,496
Total Liabilities and Equity	$	333,374		$	135,242

The accompanying notes are an integral part of these statements.

F-3

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

CONSOLIDATED/COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(In thousands, except for share and per share data)

	Successor			Predecessor
	For the Period from March 21 to December 31, 2014			For the Period from January 1 to March 20, 2014			Year Ended December 31, 2013
Revenues
Rooms	$	26,163		$	6,026		$	30,489
Food and beverage	5,612			1,543			6,267
Other	3,096			676			3,041
Total revenue	34,871			8,245			39,797
Operating expenses
Rooms	5,411			1,405			6,340
Food and beverage	3,785			1,042			4,461
Management fees - related party	1,498			289			1,471
Other property-level operating expenses	13,049			3,490			15,590
Depreciation and amortization	2,796			994			5,105
Gain on disposal of assets	—			—			74
Rent	3,879			933			4,321
Total operating expenses	30,418			8,153			37,362
Income from operations	4,453			92			2,435
Other income (expenses)
Interest income	103			—			—
Interest expense	(5,958		)	(531		)	(2,265		)
Acquisition and transaction related costs	(10,884		)	—			—
Equity in earnings (losses) of unconsolidated entities	352			(166		)	(65		)
General and administrative	(2,316		)	—			—
Total other income (expenses)	(18,703		)	(697		)	(2,330		)
Net income (loss) before taxes	(14,250		)	(605		)	105
Provision for income taxes	591			—			—
Net income (loss) and comprehensive income (loss)	$	(14,841	)	$	(605	)	$	105
Basic and diluted net loss per share	$	(5.25	)	NA			NA
Basic and diluted weighted average shares outstanding	2,826,352			NA			NA

___________________________________________________

NA - not applicable

The accompanying notes are an integral part of these statements.

F-4

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

CONSOLIDATED/COMBINED STATEMENT OF CHANGES IN EQUITY

(In thousands, except for share data)

	Common Stock
	Number of Shares	Par Value		Additional Paid-in Capital			Deficit			Total Stockholders' Equity			Members' Equity			Total
Balance, December 31, 2013	8,888	$	—	$	200		$	(6	)	$	194		$	88,496		$	88,690
Issuance of common stock	105,609	1		2,417			—			2,418			—			2,418
Net loss	—	—		—			—			—			(605		)	(605		)
Distributions	—	—		—			—			—			(800		)	(800		)
Common stock offering costs, commissions and dealer manager fees	—	—		(1,529		)	—			(1,529		)	—			(1,529		)
Balance, March 20, 2014	114,497	1		1,088			(6		)	1,083			87,091			88,174
Proceeds received from Successor for the assets of Predecessor	—	—		—			—			—			(87,091		)	(87,091		)
Issuance of common stock	9,984,711	100		248,615			—			248,715			—			248,715
Net loss	—	—		—			(14,841		)	(14,841		)	—			(14,841		)
Dividends paid or declared	—	—		—			(4,839		)	(4,839		)	—			(4,839		)
Common stock issued through Distribution Reinvestment Plan	63,998	1		1,520			—			1,521			—			1,521
Share-based payments	—	—		22			—			22			—			22
Common stock offering costs, commissions and dealer manager fees	—	—		(29,866		)	—			(29,866		)	—			(29,866		)
Balance, December 31, 2014	10,163,206	$	102	$	221,379		$	(19,686	)	$	201,795		$	—		$	201,795

The accompanying notes are an integral part of these statements.

F-5

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

CONSOLIDATED/COMBINED STATEMENTS OF CASH FLOWS

(In thousands)

	Successor			Predecessor
	For the Period from March 21 to December 31, 2014			For the Period from January 1 to March 20, 2014			Year Ended December 31, 2013
Cash flows from operating activities:
Net income (loss)	$	(14,841	)	$	(605	)	$	105
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization	2,796			994			5,105
Amortization of deferred financing costs	595			75			196
Amortization of below-market lease obligation	340			—			—
Accretion of deferred consideration	71			—			—
Accretion of contingent consideration	116			—			—
Loss on disposal of property and equipment	—			—			74
Equity in (earnings) losses of unconsolidated entities	(352		)	166			65
Distribution from unconsolidated affiliates	257			—			—
Share-based payments	22			—			—
Changes in assets and liabilities:
Prepaid expenses and other assets	(7,923		)	(581		)	455
Restricted cash	(783		)	—			—
Due to affiliates	5,042			—			—
Accounts payable and accrued expenses	5,010			(605		)	(182		)
Net cash (used in) provided by operating activities	(9,650		)	(556		)	5,818
Cash flows from investing activities:
Acquisition of hotel assets of the Predecessor	(41,388		)	—			—
Real estate investment improvements and purchases of property and equipment	(3,659		)	(83		)	(3,436		)
Acquisition deposit	(75,000		)	—			—
(Increase) decrease in restricted cash	(2,035		)	(468		)	1,163
Net cash used in investing activities	(122,082		)	(551		)	(2,273		)
Cash flows from financing activities:
Proceeds from issuance of common stock, net	249,569			—			—
Payments of offering costs	(28,071		)	—			—
Dividends paid	(1,950		)	—			—
Contributions from members	—			—			227
Distribution to members	—			(800		)	(3,922		)
Affiliate financing advancement	2,570			—			—
Affiliate financing repayment	(3,214		)	—			—
Proceeds from affiliate note payable used to fund acquisition deposit	40,500			—			—
Repayment of affiliate note payable used to fund acquisition deposit	(40,500		)	—			—
Payments of mortgage note payable	—			(137		)	(391		)
Proceeds from mortgage note payable	45,500			—			3,440
Proceeds from promissory note payable	1,775			—			—
Deferred financing fees	(2,586		)	—			(31		)
Net cash provided by (used in) financing activities	263,593			(937		)	(677		)
Net change in cash	131,861			(2,044		)	2,868
Cash and cash equivalents, beginning of period	—			10,520			7,652
Cash and cash equivalents, end of period	$	131,861		$	8,476		$	10,520

F-6

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

CONSOLIDATED/COMBINED STATEMENTS OF CASH FLOWS

(In thousands)

	Successor		Predecessor
	For the Period from March 21 to December 31, 2014		For the Period from January 1 to March 20, 2014		Year Ended December 31, 2013
Supplemental disclosure of cash flow information:
Interest paid	$	4,645	$	458	$	1,548
Taxes paid	$	760	—		—
Non-cash investing and financing activities:
Reclassification of deferred offering costs to additional paid-in capital	$	1,505	$	—	$	—
Offering costs in due to affiliates	$	1,969	$	—	$	—
Offering costs in accounts payable and accrued expenses	$	512	$	—	$	—
Real estate investment improvements and purchases of property and equipment in accounts payable and accrued expenses	$	1,033	$	—	$	—
Proceeds receivable from share sales (1)	$	1,564	$	—	$	—
Seller financing of real estate investments	$	58,074	$	—	$	—
Seller financing of investment in unconsolidated entities	$	5,000	$	—	$	—
Contingent consideration on acquisition	$	2,268	$	—	$	—
Deferred consideration on acquisition	$	3,400	$	—	$	—
Dividends declared but not paid	$	1,368	$	—	$	—
Common stock issued through distribution reinvestment plan	$	1,520	$	—	$	—

___________________________________________________

⁽¹⁾ The proceeds receivable from the sale of shares of common equity was received by the Company prior to the filing date of this Annual Report on Form 10-K.

The accompanying notes are an integral part of these statements.

F-7

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS

Note 1 - Organization

American Realty Capital Hospitality Trust, Inc. (the "Company") was incorporated on July 25, 2013 as a Maryland corporation and intends to qualify as a real estate investment trust for U.S. federal income tax purposes ("REIT") beginning with the taxable year ended December 31, 2014. The Company was formed primarily to acquire lodging properties in the midscale limited service, extended stay, select service, upscale select service, and upper upscale full service segments within the hospitality sector. The Company has no limitation as to the brand of franchise or license with which the Company's hotels will be associated. All such properties may be acquired by the Company alone or jointly with another party. The Company may also originate or acquire first mortgage loans secured by real estate and invest in other real estate-related debt. As of December 31, 2014, the Company has acquired interests in six hotels through fee simple, leasehold and joint venture interests (the "Barceló Portfolio").

On January 7, 2014, the Company commenced its initial public offering ("IPO" or the "Offering") on a "reasonable best efforts" basis of up to 80,000,000 shares of common stock, $0.01 par value per share, at a price of $25.00 per share, subject to certain volume and other discounts, pursuant to a registration statement on Form S-11 (File No. 333-190698), as amended (the "Registration Statement"), filed with the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended. The Registration Statement also covers up to 21,052,631 shares of common stock available pursuant to the Distribution Reinvestment Plan (the "DRIP") under which the Company's common stockholders may elect to have their distributions reinvested in additional shares of the Company's common stock.

Until the filing of the Company's second quarterly financial filing with the SEC, pursuant to the Securities Exchange Act of 1934, as amended, following the earlier to occur of (i) the Company's acquisition of at least $2.0 billion in total investment portfolio assets or (ii) January 7, 2016, the per share purchase price in the IPO will be up to $25.00 per share (including the maximum allowed to be charged for commissions and fees) and shares issued under the DRIP will initially be equal to $23.75 per share, which is 95% of the initial per share offering price in the IPO. Thereafter, the per share purchase price will vary quarterly and will be equal to the Company's net asset value ("NAV") per share plus applicable commissions and fees in the case of the primary offering, and the per share purchase price in the DRIP will be equal to the NAV per share. On February 3, 2014, the Company received and accepted subscriptions in excess of the minimum offering amount of $2.0 million in Offering proceeds, broke escrow and issued shares of common stock to the initial investors who were admitted as stockholders. As of December 31, 2014, the Company had 10.2 million shares of common stock outstanding and had received total gross proceeds from the IPO of approximately $252.9 million, including shares issued under the DRIP. As of December 31, 2014, the aggregate value of all the common stock outstanding was $254.0 million based on a per share value of $25.00 (or $23.75 for shares issued under the DRIP).

Substantially all of the Company's business is conducted through American Realty Capital Hospitality Operating Partnership, L.P. (the "OP"), a Delaware limited partnership. The Company is the sole general partner and holds substantially all of the units of limited partner interests in the OP ("OP Units"). Additionally, American Realty Capital Hospitality Special Limited Partner, LLC (the "Special Limited Partner") contributed $2,020 to the OP in exchange for 90 OP Units, which represents a nominal percentage of the aggregate OP ownership. The holders of OP Units have the right to convert OP Units for the cash value of a corresponding number of shares of common stock or, at the option of the OP, a corresponding number of shares of common stock of the Company in accordance with the limited partnership agreement of the OP. The remaining rights of the limited partner interests are limited, however, and do not include the ability to replace the general partner or to approve the sale, purchase or refinancing of the OP's assets.

The Company has no direct employees. The Company has retained American Realty Capital Hospitality Advisors, LLC (the "Advisor") to manage certain aspects of its affairs on a day-to-day basis. American Realty Capital Hospitality Properties, LLC (the "Property Manager") serves as the Company's property manager and the Property Manager has retained Crestline Hotels & Resorts, LLC (the "Sub-Property Manager"), an entity under common control with the parent of American Realty Capital IX, LLC, (the "Sponsor") to provide services, including locating investments, negotiating financing and operating certain hotel assets in the Company's portfolio. Realty Capital Securities, LLC (the "Dealer Manager"), an entity under common control with the parent of the Sponsor serves as the dealer manager of the offering. The Advisor, Special Limited Partner,

F-8

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS

Property Manager, Sub-Property Manager and Dealer Manager are related parties and receive fees, distributions and other compensation for services related to the Offering and the investment and management of the Company's assets.

Grace Acquisition

On May 23, 2014, the Company entered into a Real Estate Sale Agreement to acquire (the "Grace Acquisition") the fee simple or leasehold interests in 126 hotels (the "Grace Portfolio") from W2007 Equity Inns Realty, LLC, W2007 Equity Inns Realty, L.P., W2007 EQI Urbana Partnership, L.P., W2007 EQI Seattle Partnership, L.P., W2007 EQI Savannah 2 Partnership, L.P., W2007 EQI Rio Rancho Partnership, L.P., W2007 EQI Orlando Partnership, L.P., W2007 EQI Orlando 2 Partnership, L.P., W2007 EQI Naperville Partnership, L.P., W2007 EQI Milford Partnership, L.P., W2007 EQI Louisville Partnership, L.P., W2007 EQI Knoxville Partnership, L.P., W2007 EQI Jacksonville Partnership I, L.P., W2007 EQI Indianapolis Partnership, L.P., W2007 EQI Houston Partnership, L.P., W2007 EQI HI Austin Partnership, L.P., W2007 EQI East Lansing Partnership, L.P., W2007 EQI Dalton Partnership, L.P., W2007 EQI College Station Partnership, L.P., W2007 EQI Carlsbad Partnership, L.P., W2007 EQI Augusta Partnership, L.P. and W2007 EQI Asheville Partnership, L.P. (collectively, the “Sellers”) which are indirectly owned by one or more Whitehall Real Estate Funds, an investment arm controlled by The Goldman Sachs Group, Inc.

On November 11, 2014, the Real Estate Sale Agreement was amended and restated to incorporate all amendments made to that date (the "Amended Purchase Agreement"). The Amended Purchase Agreement reduced the number of hotels to be acquired to the 116 hotels currently comprising the Grace Portfolio for an aggregate purchase price of $1.808 billion, exclusive of closing costs and subject to certain adjustments at closing and changed the scheduled close date to February 27, 2015.

As of December 31, 2014, the acquisition of the Grace Portfolio had not been completed. On such date the Company anticipated funding, pursuant to the terms of the Amended Purchase Agreement, approximately $230.1 million of the purchase price with cash generated through the Offering, funding approximately $903.9 million through the assumption of existing mortgage and mezzanine indebtedness (comprising the "Assumed Grace Mortgage Loan" and the "Assumed Grace Mezzanine Loan" and, collectively, the "Assumed Grace Indebtedness") and funding approximately $227.0 million through additional mortgage financing (the "Additional Grace Mortgage Loan" and, together with the Assumed Grace Indebtedness, the "Grace Indebtedness"). The Assumed Grace Mortgage Loan that the Company expected to assume is for $801.1 million at an interest rate of London Interbank Offered Rate ("LIBOR") plus 3.11% and the Assumed Grace Mezzanine Loan that the Company expected to assume is for $102.8 million at an interest rate of LIBOR plus 4.77%. The Assumed Grace Indebtedness will be secured by 96 of the 116 hotels in the Grace Portfolio and mature on May 1, 2016, subject to three (one-year) extension rights which, if all three are exercised, result in an outside maturity date of May 1, 2019. The Additional Grace Mortgage Loan will be secured by 20 of the 116 hotels in the Grace Portfolio and an additional hotel property already owned by a subsidiary of the OP and part of the Barceló Portfolio. The Additional Grace Mortgage Loan will mature on March 6, 2017, subject to a one-year extension right, which, if exercised, would result in an outside maturity date of March 6, 2018 and will have an interest rate equal to the greater of (i) a floating rate of interest equal to LIBOR plus 6.00% and (ii) 6.25%.

In addition, we anticipated that the remaining $447.1 million of the contract purchase price would be satisfied by the issuance of the preferred equity interests (the "Grace Preferred Equity Interests") in two newly-formed Delaware limited liability companies, ARC Hospitality Portfolio I Holdco, LLC and ARC Hospitality Portfolio II Holdco, LLC, each of which will be an indirect subsidiary of the Company and an indirect owner of the Grace Portfolio. The holders of the Grace Preferred Equity Interests will be entitled to monthly distributions at a rate of 7.50% per annum for the first 18 months following closing and 8.00% per annum thereafter. On liquidation, the holders of the Grace Preferred Equity Interests will be entitled to receive their original value (as reduced by redemptions) prior to any distributions being made to the Company or the Company's shareholders. After the earlier to occur of either (i) the date of repayment in full of the Company's currently outstanding unsecured obligations in the original principal amount of approximately $63.1 million (together with the approximately $3.5 million deferred payment with respect to the March 2014 acquisition of the Georgia Tech Hotel & Conference Center, which is due concurrently), which represents the Barceló Acquisition Promissory Note (See Note 7 - Promissory Notes Payable), or (ii) the date the gross amount of IPO proceeds received by the Company following the acquisition of the Grace Portfolio and payment of all acquisition related expenses (including payments to the Advisor and its affiliates) exceeds $100.0 million, the Company will be required to use 35.0% of any IPO proceeds to redeem the Grace Preferred Equity Interests at par, up to a maximum of $350.0 million in redemptions for any 12-month period. The Company will also be required, in certain circumstances, to apply debt proceeds to redeem the Grace Preferred Equity Interests at par. As of February 27, 2018, the Company will be required to have redeemed 50.0% of the Grace Preferred Equity Interests, and the Company will be required to redeem 100.0% of the Grace Preferred Equity Interests remaining outstanding at the earlier of (i) 90 days following the stated

F-9

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS

maturity date (including extension options) under the Grace Indebtedness, and (ii) February 27, 2019. In addition, the Company will have the right, at its option, to redeem the Grace Preferred Equity Interests, in whole or in part, at any time at par. The holders of the Grace Preferred Equity Interests will have certain consent rights over major actions by the Company relating to the Grace Portfolio. If the Company is unable to satisfy the redemption, distribution or other requirements of the Grace Preferred Equity Interests (including if there is a default under the related guarantees provided by the Company, the OP and the individual principals of the parent of the Sponsor), the holders of the Grace Preferred Equity Interests have certain rights, including the ability to assume control of the operations of the Grace Portfolio through the assumption of control of the two newly-formed Delaware limited liability companies. Due to the fact that the Grace Preferred Equity Interests will be mandatorily redeemable and certain of their other characteristics, the Grace Preferred Equity Interests will be treated as debt in accordance with accounting principles generally accepted in the United States of America ("GAAP").

The transaction closed as planned on February 27, 2015, see Note 16 - Subsequent Events.

Note 2 - Summary of Significant Accounting Policies

The results of operations for the period from January 1 to March 20, 2014 for the Barceló Portfolio (the "Predecessor") and for the period from March 21 to December 31, 2014 for the Company (the "Successor") are not necessarily indicative of the results for the entire year because of the impact of seasonal or short-term variations related to the hotel industry. Certain prior period amounts have been reclassified to conform to current period presentation.

Basis of Accounting

The accompanying consolidated financial statements of the Company are prepared on the accrual basis of accounting in accordance with GAAP.

Development Stage Company

On February 3, 2014, the Company raised proceeds sufficient to break escrow in connection with its IPO. The Company received and accepted aggregate subscriptions in excess of the minimum $2.0 million and issued shares of common stock to its initial investors who were admitted as stockholders. The Company acquired the Barceló Portfolio through fee simple, leasehold and joint venture interests and commenced operations on March 21, 2014, and as of such date was no longer considered to be a development stage company.

Principles of Consolidation/Combination and Basis of Presentation

The accompanying consolidated/combined financial statements include the accounts of the Company and its subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity for which the Company is the primary beneficiary.

The Predecessor represents hospitality assets and operations owned by Barceló Crestline Corporation and its consolidated subsidiaries ("BCC"), which historically have been maintained in various legal entities. Historically, financial statements have not been prepared for the Predecessor as a discrete stand-alone entity. The accompanying consolidated/combined financial statements for the Predecessor as of December 31, 2013, for the period from January 1 to March 20, 2014 and for the year ended December 31, 2013 have been derived from the historical accounting records of BCC and reflect the assets, liabilities, equity, revenue and expenses directly attributable to the Predecessor, as well as allocations deemed reasonable by management, to present the combined financial position, results of operations, changes in equity, and cash flows of the Predecessor on a stand-alone basis. Included in the accompanying consolidated/combined statement of operations for the period from March 21 to December 31, 2014 is $0.2 million of costs related to the Company for the period from January 1 to March 20, 2014.

F-10

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS

Use of Estimates

The preparation of the accompanying consolidated/combined financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding purchase price allocations to record investments in real estate, the useful lives of real estate and real estate taxes, as applicable.

Real Estate Investments and Below-Market Lease

The Company allocates the purchase price of properties acquired in real estate investments to tangible and identifiable intangible assets acquired based on their respective fair values at the date of acquisition. Tangible assets include land, land improvements, buildings and fixtures. The Company utilizes various estimates, processes and information to determine the property value. Estimates of value are made using customary methods, including data from appraisals, comparable sales, discounted cash flow analysis and other methods. Amounts allocated to land, land improvements, buildings and fixtures are based on purchase price allocation studies performed by independent third parties or on the Company’s analysis of comparable properties in the Company’s portfolio. Identifiable intangible assets and liabilities, as applicable, are typically related to contracts, including operating lease agreements, ground lease agreements and hotel management agreements, which will be recorded at fair value.

In making estimates of fair values for purposes of allocating the purchase price, the Company utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. The Company also considers information obtained about each property as a result of the Company’s pre-acquisition due diligence in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed.

Investments in real estate that are not considered to be business combinations are recorded at cost. Improvements and replacements are capitalized when they extend the useful life of the asset. Costs of repairs and maintenance are expensed as incurred. Depreciation of the Company's assets is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings, 15 years for land improvements, five years for fixtures and the shorter of the useful life or the remaining lease term for leasehold interests.

The Company is required to make subjective assessments as to the useful lives of the Company’s assets for purposes of determining the amount of depreciation to record on an annual basis with respect to the Company’s investments in real estate. These assessments have a direct impact on the Company’s net income because if the Company were to shorten the expected useful lives of the Company’s investments in real estate, the Company would depreciate these investments over fewer years, resulting in more depreciation expense and lower net income on an annual basis.

A disposal of a component of the Company or a group of components of the Company is required to be reported in discontinued operations only if the disposal represents a strategic shift that has, or will have, a major effect on the Company's operations and financial results. The Company is required to present, for each comparative period, the assets and liabilities of a disposal group that includes a discontinued operation separately in the asset and liability sections, respectively, of the statement of financial position. As a result, the operations of sold properties through the date of their disposal will be included in continuing operations, unless the sale represents a strategic shift. However, the gain or loss on the sale of a property will be reported separately below income from continuing operations.

The below-market lease intangible is based on the difference between the market rent and the contractual rent and is discounted to a present value using an interest rate reflecting the Company's current assessment of the risk associated with the lease acquired. See Note 5. Acquired lease intangible assets are amortized over the remaining lease term. The amortization of a below-market lease is recorded as an increase to rent expense on the consolidated/combined statements of operations.

Impairment of Long Lived Assets and Investments in Unconsolidated Entities

When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to

F-11

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS

result from the property’s use and eventual disposition. The estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of demand, competition and other factors. If impairment exists, due to the inability to recover the carrying value of a property, an impairment loss will be recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less the estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income. No such impairment losses were recorded in the periods presented.

Cash and Cash Equivalents

Cash and cash equivalents includes cash in bank accounts as well as investments in highly-liquid money market funds with original maturities of three months or less. The Federal Deposit Insurance Corporation ("FDIC"), only insures amounts up to $250,000 per depositor per insured bank. The Company expects to have cash and cash equivalents and restricted cash deposited in certain financial institutions in excess of federally insured levels.

Restricted Cash

Restricted cash consists of amounts required under mortgage agreements for future capital improvements to owned assets, future interest and property tax payments and excess cash flow deposits due to mortgage agreement restrictions. For purposes of the statement of cash flows, changes in restricted cash caused by changes to the amount needed for future capital improvements are treated as investing activities and changes related to future interest and real estate tax payments and excess cash flow deposits are treated as operating activities.

Deferred Financing Fees

Deferred financing fees represent commitment fees, legal fees and other costs associated with obtaining commitments for financing. These fees are amortized over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing fees are expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not be successful.

Variable Interest Entities

Accounting Standards Codification ("ASC") 810, Consolidation contains the guidance surrounding the definition of variable interest entities ("VIE"), the definition of variable interests and the consolidation rules surrounding VIEs. In general, VIEs are entities in which equity investors lack the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. The Company has variable interests in VIEs through its investments in entities which own the Westin Virginia Beach Town Center (the "Westin Virginia Beach") and the Hilton Garden Inn Blacksburg.

Once it is determined that the Company holds a variable interest in an entity, GAAP requires that the Company perform a qualitative analysis to determine (i) which entity has the power to direct the matters that most significantly impact the VIE’s financial performance; and (ii) if the Company has the obligation to absorb the losses of the VIE that could potentially be significant to the VIE or the right to receive the benefits of the VIE that could potentially be significant to the VIE. The entity that has both of these characteristics is deemed to be the primary beneficiary and is required to consolidate the VIE (See Note 4 - Variable Interest Entities and Investments in Unconsolidated Entities).

The Company classifies the distributions from its investments in unconsolidated entities in the consolidated/combined statement of cash flows based upon an evaluation of the specific facts and circumstances of each distribution. For example, distributions of cash generated by property operations are classified as cash flows from operating activities. However, distributions received as a result of property sales are classified as cash flows from investing activities.

Revenue Recognition

Hotel revenue is recognized as earned, which is generally defined as the date upon which a guest occupies a room or utilizes the hotel services.

F-12

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS

Income Taxes

The Company intends to elect and qualify to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with its tax year ended December 31, 2014. In order to qualify as a REIT, the Company must annually distribute to its stockholders 90% of its REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding net capital gain, and must comply with various other organizational and operational requirements. If the Company qualifies for taxation as a REIT, it generally will not be subject to federal corporate income tax on that portion of its REIT taxable income that it distributes to its stockholders. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income, property tax and federal income and excise taxes on its undistributed income. The Company's hotels are leased to a taxable REIT subsidiary ("TRS") which is a wholly owned subsidiary of the OP. The TRS is subject to federal, state and local income taxes.

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for net operating loss, capital loss, and tax credit carryovers. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which such amounts are expected to be realized or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period when the new rate is enacted. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of available evidence, including future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies.

GAAP prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken in a tax return. The Company must determine whether it is "more-likely-than-not" that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Once it is determined that a position meets the more-likely-than-not recognition threshold, the position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement in order to determine the amount of benefit to recognize in the financial statements. This accounting standard applies to all tax positions related to income taxes. The Company recognizes accrued interest related to unrecognized tax benefits in interest expense and penalties in operating expenses.

Earnings/Loss per Share

The Company calculates basic income or loss per share by dividing net income or loss for the period by the weighted-average shares of its common stock outstanding for a respective period. Diluted income per share takes into account the effect of dilutive instruments, such as stock options and unvested stock awards, except when doing so would be anti-dilutive.

Advertising Costs

The Company expenses advertising costs as incurred. These costs were $0.4 million combined between the Predecessor and the Company for the year ended December 31, 2014 and $0.4 million for the Predecessor for the year ended December 31, 2013.

Allowance for Doubtful Accounts

Receivables consist principally of trade receivables from customers and are generally unsecured and are due within 30 to 90 days. The Company records a provision for uncollectible accounts using the allowance method. Expected credit losses associated with trade receivables are recorded as an allowance for doubtful accounts. The allowance for doubtful accounts is estimated based upon historical patterns of credit losses for aged receivables as well as specific provisions for certain identifiable, potentially uncollectible balances. When internal collection efforts on accounts have been exhausted, the accounts are written off and the associated allowance for doubtful accounts is reduced. Trade receivable balances, net of the allowance for doubtful accounts, are included in prepaid expenses and other assets in the accompanying consolidated/combined balance sheets, and are as follows (in thousands):

F-13

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS

	Successor			Predecessor
	December 31, 2014			December 31, 2013
Trade receivables	$	1,388		$	788
Allowance for doubtful accounts	(45		)	(26		)
Trade receivables, net of allowance	$	1,343		$	762

Reportable Segments

The Company has determined that it has one reportable segment, with activities related to investing in real estate. The Company’s investments in real estate generate room revenue and other income through the operation of the properties, which comprise 100% of the total consolidated/combined revenues. Management evaluates the operating performance of the Company’s investments in real estate on an individual property level, none of which represent a reportable segment.

Recently Issued Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-08 Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360) - Reporting Discontinued Operations and Disclosure of Disposal of Components of an Entity. Under this standard, a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations only if the disposal represents a strategic shift that has, or will have, a major effect on an entity’s operations and financial results. In addition, it requires an entity to present, for each comparative period, the assets and liabilities of a disposal group that includes a discontinued operation separately in the asset and liability sections, respectively, of the statement of financial position. As a result, the operations of sold properties through the date of their disposal will be included in continuing operations, unless the sale represents a strategic shift. However, the gain or loss on the sale of a property will be reported separately below income from continuing operations. The Company adopted this ASU as of January 1, 2014. No prior year restatements are permitted for this change in policy. For purposes of earnings per share calculation, beginning in 2014 gains and losses on property sales will be included in continuing operations.

On May 28, 2014, the FASB issued ASU 2014-09 Revenue from Contracts with Customers ("ASU 2014-09"), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

In August 2014, the FASB issued ASU 2014-15 Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”), which describes how an entity should assess its ability to meet obligations and sets rules for how this information should be disclosed in the financial statements. The standard provides accounting guidance that will be used along with existing auditing standards. The adoption of ASU 2014-15 becomes effective for the Company on its fiscal year ending December 31, 2016, and all subsequent annual periods. Early adoption is permitted. The adoption of ASU 2014-15 is not expected to have a material effect on the Company's consolidated financial statements.

Note 3 - Business Combination

On March 21, 2014, the Company acquired the Barceló Portfolio through fee simple, leasehold and joint venture interests. The aggregate purchase price of the Barceló Portfolio was approximately $110.1 million, exclusive of closing costs. The Barceló Portfolio consists of (i) three wholly owned hotel assets (the "Portfolio Owned Assets"), the Baltimore Courtyard Inner Harbor Hotel (the "Baltimore Courtyard"), the Courtyard Providence Downtown Hotel (the "Providence Courtyard") and the Homewood Suites by Hilton Stratford (the "Stratford Homewood Suites"); (ii) one leased asset, the Georgia Tech Hotel & Conference Center (the "Georgia Tech Hotel"); and (iii) equity interests in two joint ventures (the "Joint Venture Assets") that each own one hotel, the Westin Virginia Beach and the Hilton Garden Inn Blacksburg.

F-14

The following table presents the allocation of the assets acquired and liabilities assumed by the Company as of March 21, 2014 (in thousands):

	Successor
Assets acquired and liabilities assumed	As of March 21, 2014
Land	$	12,061
Buildings and improvements	77,605
Below-market lease obligation	8,400
Furniture, fixtures and equipment	5,220
Restricted cash	619
Investment in unconsolidated entities	5,380
Prepaid expenses and other assets	2,314
Accounts payable and accrued expenses	(1,469		)
Total operating assets acquired, net	110,130
Contingent consideration on acquisition	(2,268		)
Seller financing of real estate investments	(58,074		)
Seller financing of investment in unconsolidated entities	(5,000		)
Deferred consideration	(3,400		)
Total assets acquired, net	$	41,388

The Company is finalizing the fair value of certain tangible and intangible assets acquired and adjustments may be made to the preliminary purchase price allocation shown above. Pro forma information as if the above acquisitions during the year ended December 31, 2014 had been consummated on January 1, 2013 have not been presented as the results for the Predecessor for the period from January 1 to March 20, 2014 and the year ended December 31, 2013 representing substantially all of the Company's operations are included in the consolidated/combined statements of operations.

Contingent consideration included as part of the acquisition is payable to BCC in 2016 based on the operating results of the Baltimore Courtyard, Providence Courtyard and Stratford Homewood Suites. Additionally, deferred consideration payable to BCC of $3.0 million and $0.5 million is payable within ten business days after the date the Company raises $70.0 million in common equity from the Offering excluding any common equity raised on or prior to the closing of the Grace Acquisition and payment of all acquisition related expenses (including payments to the Advisor and its affiliates) (See Note 11 - Commitments and Contingencies for further information on the preceding). The fair value of the contingent consideration on acquisition of $2.3 million and the deferred consideration of $3.4 million are included in accounts payable and accrued expenses (See Note 8) and the seller financing of real estate investments and seller financing of investment in unconsolidated entities are included in promissory notes payable (See Note 7) on the accompanying consolidated/combined balance sheets.

Note 4 - Variable Interest Entities and Investments in Unconsolidated Entities

The Company's accompanying consolidated/combined financial statements and the Predecessor's combined financial statements include investments in (i) an entity that owns the Westin Virginia Beach and (ii) an entity that owns the Hilton Garden Inn Blacksburg.

The Company as of December 31, 2014 and the Predecessor as of December 31, 2013 have a 24.00% non-controlling interest (but with certain veto and approval rights) in BSE/AH Blacksburg Hotel, LLC (the "HGI Blacksburg JV"), an entity that owns the assets of the Hilton Garden Inn Blacksburg. The HGI Blacksburg JV has a loan with an original principal balance of $13.0 million (the "Blacksburg Loan"). In addition, BCC is a party to the First Amended and Restated Guaranty of Payment dated April 17, 2011 (the "Blacksburg Payment Guaranty") in connection with the Blacksburg Loan, which is partially supported by a Construction Loan Indemnity from the other partners in the HGI Blacksburg JV dated March 10, 2008 (the "Blacksburg Cross Indemnity"). In connection with the acquisition of its non-controlling interest in the HGI Blacksburg JV, on March 21, 2014, the Company entered into an Indemnity Agreement (the "BCC Indemnity") pursuant to which the Company agreed to indemnify BCC against liabilities arising under the Blacksburg Payment Guaranty and/or the Blacksburg Cross Indemnity. The outstanding balance of the Blacksburg Loan was $10.1 million and $10.7 million as of December 31, 2014 and December 31, 2013, respectively.

Under the Blacksburg Payment Guaranty, BCC is jointly liable to the lender, along with four other parties, for payment of any Blacksburg Loan deficiencies. The Blacksburg Payment Guaranty remains in effect until the Blacksburg Loan is repaid.

F-15

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS

Under the Blacksburg Cross Indemnity, each of the joint venture owners of the hotel agrees to be responsible for its pro rata share of any liabilities under the Blacksburg Payment Guaranty, and to be 100% responsible for any liabilities caused by it. Thus, so long as each of the other parties to the Blacksburg Cross Indemnity remains solvent, the Company, through the BCC Indemnity, should never be liable for anything more than the Company’s pro rata share of losses, or 100% of the losses the Company caused.

The Company as of December 31, 2014 and the Predecessor as of December 31, 2013 have a 30.53% non-controlling interest (but with certain veto and approval rights) in TCA Block 7 Hotel, LLC (the "Westin Virginia Beach JV"), an entity that owns the assets of the Westin Virginia Beach. On April 8, 2014, a loan in connection with the hotel was refinanced and Notes A and B of that loan were paid off. Upon payment in full of Notes A and B, Note C for $7.0 million and related accrued interest of $0.5 million were forgiven. On April 8, 2014, Westin Virginia Beach JV entered into a $20.7 million loan (the "Westin Virginia Beach Loan") with an unaffiliated lender. In addition, the Company is a party to a Guaranty of Recourse Obligations dated April 8, 2014 (the "Westin Virginia Beach Non-Recourse Carve-out Guaranty") in connection with the Westin Virginia Beach Loan, which is partially supported by a permanent loan cross indemnity from the other partners in the Westin Virginia Beach JV dated April 1, 2014 (the "Westin Virginia Beach Cross Indemnity"). The outstanding balance of the prior loans was $26.6 million as of December 31, 2013, and the outstanding balance of the Westin Virginia Beach Loan was $20.5 million as of December 31, 2014.

Under the Westin Virginia Beach Non-Recourse Carve-out Guaranty, the Company, along with two other parties, would be liable to the lender for repayment for part or all of the loan upon occurrence of events triggering non-recourse carve-out liability. Pursuant to the Westin Virginia Beach Cross Indemnity, each of the joint venture partners is obligated to pay its pro rata share of any losses incurred by the parties to the Westin Virginia Beach Non-Recourse Carve-out Guaranty, except to the extent that any such loss is caused by one of those parties, in which case that party is responsible for 100% of the losses. Therefore, so long as each of the other parties remains solvent, the Company should never be liable for anything more than its pro rata share of losses, or 100% of the losses it caused. The Westin Virginia Beach Non-Recourse Carve-out Guaranty remains in place until the Westin Virginia Beach Loan is repaid.

The Company considers these entities to be VIEs. The Company has concluded it is not the primary beneficiary with the power to direct activities that most significantly impact economic performance of the entities, and accordingly, has not consolidated the entities. The Company has accounted for the entities under the equity method of accounting and included them in investments in unconsolidated entities in the accompanying consolidated/combined balance sheets.

The Company’s and Predecessor's investments in unconsolidated entities as of December 31, 2014 and December 31, 2013, respectively, consist of the following (in thousands):

			Investment in Partnership
			Successor		Predecessor		Successor		Predecessor
Partnership	Ownership Interest		December 31, 2014		December 31, 2013		For the Period from March 21 to December 31, 2014		For the Period from January 1 to March 20, 2014			Year Ended December 31, 2013
HGI Blacksburg JV	24.00	%	$	1,631	$	893	$	110	$	(35	)	$	79
Westin Virginia Beach JV	30.53	%	3,844		3,488		242		(131		)	(144		)
Total			$	5,475	$	4,381	$	352	$	(166	)	$	(65	)

The Company received a capital distribution of $0.24 million from the Westin Virginia Beach JV for the year ended December 31, 2014. No distributions were recorded during the year ended December 31, 2013.

During the period from March 21 to December 31, 2014, the Company received a capital distribution of $0.01 million from the HGI Blacksburg JV. No distributions were recorded during the year ended December 31, 2013.

The maximum exposure to loss as a result of the Company’s and Predecessor's investments in unconsolidated entities as of December 31, 2014 and December 31, 2013, respectively, is as follows (in thousands)⁽¹⁾:

F-16

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS

	Partnership Loan Balance				Investment in Partnership				Partnership Maximum Exposure to Loss
	Successor		Predecessor		Successor		Predecessor		Successor		Predecessor
Partnership	December 31, 2014		December 31, 2013		December 31, 2014		December 31, 2013		December 31, 2014		December 31, 2013
HGI Blacksburg JV	$	10,063	$	10,663	$	1,631	$	893	$	11,694	$	11,556
Westin Virginia Beach JV	20,540		26,576		3,844		3,488		24,384		30,064
Total	$	30,603	$	37,239	$	5,475	$	4,381	$	36,078	$	41,620

______________________________________________________________________________________________

⁽¹⁾ Represents the Company's maximum exposure to loss at each unconsolidated entity should the loss be caused by the Company. As a result of the Blacksburg Payment Guaranty, the Blacksburg Cross Indemnity, the Westin Virginia Beach Non-Recourse Carve-out Guaranty and the Westin Virginia Beach Cross Indemnity, the Company and Predecessor have a maximum exposure to loss of the outstanding loan balance at the entity as well as their investment in the entity.

Below is the summarized financial information for the HGI Blacksburg JV as of December 31, 2014 and December 31, 2013 and for the period from January 1 to March 20, 2014, for the period from March 21 to December 31, 2014 and for the year ended December 31, 2013 (in thousands):

	Successor		Predecessor
(in thousands)	December 31, 2014		December 31, 2013
Total Assets	$	14,659	$	14,835
Total Liabilities	10,482		11,113

	Successor			Predecessor
	For the Period from March 21 to December 31, 2014			For the period from January 1 to March 20, 2014			Year Ended December 31, 2013
Hotel revenue	$	3,981		$	687		$	4,440
Operating income (loss)	887			(47		)	794
Interest expense	(340		)	(97		)	(465		)
Net income (loss)	$	547		$	(144	)	$	329
Company's share of net income (loss)	132			(35		)	79
Additional amortization expense (1)	(22		)	—			—
Company's share of net income (loss)	$	110		$	(35	)	$	79

____________________________________________________________________________

⁽¹⁾ Amortization of the purchase price of the Company’s original interest in the HGI Blacksburg JV, less the Company's share of the JV's deficit, which resulted in a basis difference of $0.6 million.

Below is the summarized financial information for the Westin Virginia Beach JV as of December 31, 2014 and December 31, 2013 and for the period from January 1 to March 20, 2014, for the period from March 21 to December 31, 2014 and for the year ended December 31, 2013 (in thousands):

	Successor		Predecessor
(in thousands)	December 31, 2014		December 31, 2013
Total Assets	$	30,816	$	31,035
Total Liabilities	22,168		28,991

F-17

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS

	Successor			Predecessor
	For the Period from March 21 to December 31, 2014			For the Period from January 1 to March 20, 2014			Year Ended December 31, 2013
Hotel revenue	$	10,146		$	2,070		$	11,232
Operating income (loss)	2,150			(67		)	1,228
Interest income	—			—			2
Interest expense	(994		)	(304		)	(1,429		)
Forgiveness of debt	7,522			—			—
Net income (loss)	$	8,678		$	(371	)	$	(199	)
Company's share of net income (loss)	2,650			(113		)	(61		)
Additional amortization expense (1)	(111		)	(18		)	(83		)
Unrecognized gain by JV (2)	(2,297		)	—			—
Company's share of net income (loss)	$	242		$	(131	)	$	(144	)

_________________________________________________________________________

⁽¹⁾ Amortization of the purchase price of the Predecessor’s original interest in the Westin Virginia Beach JV, less the Predecessor’s share of the partnership’s deficit, which resulted in a basis difference of $3.4 million and the Company’s original interest in the Westin Virginia Beach JV, less the Company's share of the JV's deficit, which resulted in a basis difference of $3.6 million.

⁽²⁾ Represents gain recorded by the JV for the forgiveness of debt which is not recognized by the Company.

Note 5 - Leases

In October 2001, the Predecessor, through a wholly owned subsidiary, entered into an operating lease agreement to lease the Georgia Tech Hotel, which opened in August 2003. On March 21, 2014, the Company acquired the Predecessor's interest in the lease. The lease has an initial term of 30 years from the opening date, with a 10-year extension option. The lease requires the Company to pay rent equal to (i) a fixed minimum rent plus (ii) an additional rent based upon a specified percentage of revenues to the extent they exceed a specified threshold. The Company is responsible for paying all of the hotel operating expenses including all personnel costs, impositions, utility charges, insurance premiums, and payments for funding furniture, fixtures and equipment reserves. Rent expense for the Georgia Tech Hotel attributable to the Successor for the period from March 21 to December 31, 2014 was $3.9 million. In connection with the acquisition of the Georgia Tech Hotel lease, the Company has allocated a value to the below-market lease intangible based on the difference between the market rent and the rental commitments. During the year endedDecember 31, 2014, $0.3 million has been amortized to rent expense. Rent expense attributable to the Predecessor for the period from January 1 to March 20, 2014 and the year ended December 31, 2013 was $0.9 million and $4.3 million, respectively.

The future minimum rental commitments for the Georgia Tech Hotel are as follows (in thousands):

	Minimum Rental Commitments		Amortization of Lease Intangible to Rent Expense
Year ended December 31, 2015	$	4,400	$	433
Year ended December 31, 2016	4,400		433
Year ended December 31, 2017	4,400		433
Year ended December 31, 2018	4,400		433
Year ended December 31, 2019	4,400		433
Thereafter	60,133		5,895
Total	$	82,133	$	8,060

F-18

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS

Note 6 - Mortgage Note Payable

The Company’s and the Predecessor's mortgage note payable as of December 31, 2014 and December 31, 2013 consist of the following, respectively (in thousands):

Successor
	Outstanding Mortgage Note Payable
Encumbered Properties	December 31, 2014		Interest Rate	Payment	Maturity
Baltimore Courtyard & Providence Courtyard	$	45,500	4.3%	Interest Only, Principal paid at Maturity	April 2019

Predecessor
	Outstanding Mortgage Note Payable
Encumbered Properties	December 31, 2013		Interest Rate	Payment	Maturity
Baltimore Courtyard & Providence Courtyard	$	41,449	4.55% plus the greater of (i) three-month LIBOR or (ii) a LIBOR floor of 0.50%(1)	Principal and Interest	January 2016

______________________________________________________________________________________________

⁽¹⁾5.05% at December 31, 2013

The Predecessor's mortgage note payable was paid off concurrently with the acquisition of the Barceló Portfolio by the Company. Interest expense related to the mortgage note payable attributable to the Successor for the period from March 21 to December 31, 2014 was $1.6 million. Interest expense attributable to the Predecessor for the period from January 1 to March 20, 2014 and the year ended December 31, 2013 was $0.5 million and $2.1 million, respectively.

Note 7 - Promissory Notes Payable

The Company’s promissory notes payable as of December 31, 2014 are as follows (in thousands):

	Outstanding Promissory Notes Payable
Use of Proceeds	December 31, 2014		Interest Rate		Payment	Maturity
Barceló acquisition	$	63,074	6.8	%	Interest Only	See below
Property improvement plan	1,775		4.5	%	Interest Only	March 2019
Grace Acquisition deposit	—		6.0	%	Interest Only	May 2015

______________________________________________________________________________________________

The promissory notes payable for the Barceló acquisition originally consisted of the Portfolio Owned Assets and Joint Venture Assets promissory notes which had a maturity date of within ten business days upon the Company raising equal to or greater than $150.0 million in common equity from the Offering. During the year ended December 31, 2014, the Company entered into an amendment to the Portfolio Owned Assets and Joint Venture Assets promissory notes whereby the promissory notes were combined into one note (the "Barceló Promissory Note") with an outstanding principal amount of $63.1 million. The Barceló Promissory Note has a maturity date of within ten business days after the Company raises $70.0 million in common equity from the Offering after the closing of the Grace Acquisition and payment of all acquisition related expenses (including

payments to the Advisor and its affiliates). There are no principal payments under the Barceló Promissory Note payable for 2015 and 2016, unless the contingent payment feature above is satisfied by raising equal to or greater than $70.0 million in common equity from the Offering after the closing of the Grace Acquisition and payment of all acquisition related expenses

(including payments to the Advisor and its affiliates).

F-19

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS

The Barceló Promissory Note is payable to BCC and the property improvement plan promissory note is payable to the Sub-Property Manager.

In connection with entering into the Grace Acquisition, the Company paid a $50.0 million customary earnest money deposit on May 27, 2014 which was partially funded by a $40.5 million draw on a $45.0 million promissory note with CARP, LLC, an entity under common control with the Sponsor (the "Affiliate Promissory Note"), which had a maturity date of May 27, 2015. As of December 31, 2014, the Affiliate Promissory Note had been repaid in full.

Interest expense related to promissory notes payable attributable to the Company for the period from March 21 to December 31, 2014 was $3.6 million. No interest expense related to promissory notes payable was incurred by the Predecessor for the year ended December 31, 2013 as the Predecessor did not have any promissory notes.

Note 8 - Accounts Payable and Accrued Expenses

The following is a summary of the components of accounts payable and accrued expenses (in thousands):

	Successor		Predecessor
	December 31, 2014		December 31, 2013
Trade accounts payable and accrued expenses	$	7,412	$	2,745
Contingent consideration from Barceló Acquisition (see Note 11)	2,384		—
Deferred payment for Barceló Acquisition (see Note 11)	3,471		—
Accrued salaries and related liabilities	952		819
Georgia Tech Hotel lease obligation	—		1,733
Total	$	14,219	$	5,297

Note 9 - Common Stock

The Company had 10,163,206 shares and 8,888 shares of common stock outstanding and had received total proceeds of $252.9 million and $0.2 million as of December 31, 2014 and December 31, 2013, respectively.

On February 3, 2014, the Company's board of directors declared distributions payable to stockholders of record each day during the applicable month at a rate equal to $0.0000465753 per day, or $1.70 per annum, per share of common stock. The first distribution was paid in May 2014 to holders of record in April 2014. The distributions are payable by the fifth day following each month end to stockholders of record at the close of business each day during the prior month.

Share Repurchase Program

The Company has a Share Repurchase Program (the "SRP") that enables stockholders to sell their shares of common stock originally purchased from the Company to the Company. Under the SRP, stockholders may request that the Company redeem all or any portion, subject to certain minimum conditions described below, if such repurchase does not impair the Company’s capital or operations.

Except in connection with a stockholder’s death, disability, bankruptcy or other involuntary exigent circumstance, prior to the time that the shares of common stock are listed on a national securities exchange and until the Company begins to calculate its NAV, the repurchase price per share will depend on the length of time investors have held such shares as follows: after one year from the purchase date — the lower of $23.13 or 92.5% of the amount they actually paid for each share; after two years from the purchase date — the lower of $23.75 or 95.0% of the amount they actually paid for each share; after three years from the purchase date —  the lower of $24.38 or 97.5% of the amount they actually paid for each share; and after four years from the purchase date — the lower of $25.00 or 100.0% of the amount they actually paid for each share (in each case, as adjusted for any stock distributions, combinations, splits and recapitalizations).

Once the Company begins to calculate its NAV, the price per share that the Company will pay to repurchase the Company’s shares of common stock on the last day of each quarter, will be the Company’s per share NAV of common stock for the quarter, calculated after the close of business on each day the Company makes its quarterly financial filing. Subject to limited

F-20

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS

exceptions, stockholders whose shares of common stock are repurchased within the first four months from the date of purchase will be subject to a short-term trading fee of 2.0% of the aggregate per share NAV of the shares of common stock repurchased.

The board of directors may reject a request for repurchase, at any time. Purchases under the SRP by the Company will be limited in any calendar year to 5.0% of the weighted average number of shares outstanding during the prior calendar year. In addition, funds available for the Company's SRP are limited and may not be sufficient to accommodate all requests. Due to these limitations, we cannot guarantee that we will be able to accommodate all repurchase requests.

When a stockholder requests a repurchase and the repurchase is approved, the Company will reclassify such obligation from equity to a liability based on the settlement value of the obligation. Shares purchased under the SRP will have the status of authorized but unissued shares. As of December 31, 2014 and December 31, 2013, no shares had been repurchased or requested to be repurchased.

Distribution Reinvestment Plan

Pursuant to the DRIP, stockholders may elect to reinvest distributions by purchasing shares of common stock in lieu of receiving cash. No dealer manager fees or selling commissions are paid with respect to shares purchased pursuant to the DRIP. Participants purchasing shares pursuant to the DRIP have the same rights and are treated in the same manner as if such shares were issued pursuant to the primary Offering. The board of directors may designate that certain cash or other distributions be excluded from the DRIP. The Company has the right to amend or suspend any aspect of the DRIP or terminate the DRIP with ten days’ notice to participants. Shares issued under the DRIP are recorded to equity in the accompanying balance sheets in the period distributions are paid. There were 63,998 shares issued under the DRIP as of December 31, 2014. No shares were issued under the DRIP as of December 31, 2013.

Note 10 - Fair Value Measurements

In accordance with ASC 820, certain assets and liabilities are recorded at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability between market participants in an orderly transaction on the measurement date. The market in which the reporting entity would sell the asset or transfer the liability with the greatest volume and level of activity for the asset or liability is known as the principal market. When no principal market exists, the most advantageous market is used. This is the market in which the reporting entity would sell the asset or transfer the liability with the price that maximizes the amount that would be received or minimizes the amount that would be paid. Fair value is based on assumptions market participants would make in pricing the asset or liability. Generally, fair value is based on observable quoted market prices or derived from observable market data when such market prices or data are available. When such prices or inputs are not available, the reporting entity should use valuation models.

The Company’s financial instruments recorded at fair value on a recurring basis are categorized based on the priority of the inputs used to measure fair value. The inputs used in measuring fair value are categorized into three levels, as follows:

• Level 1 - Inputs that are based upon quoted prices for identical instruments traded in active markets.

• Level 2 - Inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar investments in markets that are not active, or models based on valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the investment.

• Level 3 - Inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety.

F-21

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS

The Company is required to disclose the fair value of financial instruments which it is practicable to estimate. The fair value of cash and cash equivalents, accounts receivable and accounts payable and accrued expenses approximate their carrying amounts due to the relatively short maturity of these items. The following table shows the carrying values and the fair values of material non-current liabilities that qualify as financial instruments, determined in accordance with the authoritative guidance for disclosures about fair value of financial instruments (in thousands):

	Successor				Predecessor
	December 31, 2014				December 31, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Mortgage note payable	$	45,500	$	44,582	$	41,449	$	38,921
Promissory notes payable	64,849		64,849		—		—
Contingent consideration on acquisition	2,384		2,384		—		—
Deferred consideration	3,471		3,471		—		—
Total	$	116,204	$	115,286	$	41,449	$	38,921

The fair value of the mortgage note payable was determined using the discounted cash flow method and applying current market rates and is classified as level 3 under the fair value hierarchy. The fair values of the promissory notes payable were determined to equal their carrying amounts as these amounts are expected to be repaid within a year. The fair value of the contingent consideration on acquisition and deferred consideration was determined to equal their carrying amounts using level 3 inputs, as these amounts are accreted using current market rates.

Note 11 - Commitments and Contingencies

Litigation

In the ordinary course of business, the Company may become subject to litigation or claims. There are no material legal proceedings pending or known to be contemplated against the Company at the date of this filing.

Environmental Matters

In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. The Company has acquired the Barceló Portfolio through fee simple, leasehold and joint venture interests and as of December 31, 2014, has not been notified by any governmental authority of any non-compliance, liability or other claim and is not aware of any other environmental condition that it believes will have a material adverse effect on the results of operations.

Contingent Consideration

Included as part of the acquisition of the Barceló Portfolio is a contingent consideration payable to BCC based on the operating results of the Baltimore Courtyard, Providence Courtyard and Stratford Homewood Suites. The amount payable is calculated by applying a capitalization rate of 8.4% to the excess earnings before interest, taxes, depreciation and amortization ("EBITDA") earned in the second year after the acquisition over an agreed upon target. If this target EBITDA is not met, no amount will be due to BCC, but if the EBITDA earned is higher than forecasted, the amount due to BCC could be higher than the liability recorded in the consolidated/combined balance sheets as of December 31, 2014.

Deferred Consideration

Included as part of the acquisition of the Barceló Portfolio is deferred consideration payable to BCC of $3.0 million and $0.5 million which was payable on March 21, 2015 and March 21, 2016, respectively. As part of the amendment to the Portfolio Owned Assets and Joint Venture Assets promissory notes, the full amount of $3.5 million is now payable within ten business days after the date the Company raises $70.0 million in common equity from the Offering after the closing of the Grace Acquisition and payment of all acquisition related expenses (including payments to the Advisor and its affiliates). The deferred consideration does not bear interest.

F-22

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS

Note 12 - Related Party Transactions and Arrangements

As of December 31, 2014, the Special Limited Partner owned 8,888 shares of the Company’s outstanding common stock. The Advisor and its affiliates are entitled to a variety of fees, and may incur and pay costs and fees on behalf of the Company for which they are entitled to reimbursement. The Company had a payable due to affiliates related to operating and Offering costs of $7.0 million and $0.6 million as of December 31, 2014 and December 31, 2013, respectively.

Fees Paid in Connection with the Offering

The Dealer Manager is paid fees and compensation in connection with the sale of the Company's common stock in the Offering. The Dealer Manager is paid a selling commission of up to 7.0% of the per share purchase price of the Company’s offering proceeds before reallowance of commissions earned by participating broker-dealers. In addition, the Dealer Manager is paid up to 3.0% of the gross proceeds from the sale of shares, before reallowance to participating broker-dealers, as a dealer-manager fee. The Dealer Manager may reallow its dealer-manager fee to participating broker-dealers. Alternatively, a participating broker dealer may elect to receive a fee equal to 7.5% of the gross proceeds from the sale of shares by such participating broker dealer, with 2.5% thereof paid at the time of such sale and 1.0% thereof paid on each anniversary of the closing of such sale up to and including the fifth anniversary of the closing of such sale. If this option is elected, the dealer manager fee will be reduced to 2.5% of gross proceeds.

The table below shows the fees incurred from and payable to the Dealer Manager for the Offering during the year ended December 31, 2014 and 2013, respectively, and the associated payable as of December 31, 2014 and December 31, 2013, which is recorded in due to affiliates on the Company's consolidated/combined balance sheets (in thousands):

	Year Ended   December 31,				Payable as of
	2014		2013		December 31, 2014		December 31, 2013
Total commissions and fees incurred from the Dealer Manager	$	24,099	$	—	$	153	$	—

The Company had a receivable from the Dealer Manager for proceeds from the IPO of $1.6 million as of December 31, 2014 which is recorded in prepaid expenses and other assets on the Company's consolidated/combined balance sheets. No amount were receivable as of December 31, 2013.

The Advisor and its affiliates are paid compensation and/or receive reimbursement for services relating to the Offering, including transfer agency services provided by an affiliate of the Dealer Manager. The Company is responsible for Offering and related costs up to a maximum of 2.0% of gross proceeds received from the Offering, measured at the end of the Offering. Offering costs in excess of the 2.0% cap as of the end of the Offering are the Advisor’s responsibility. As of December 31, 2014 and December 31, 2013, Offering and related costs exceeded 2.0% of gross proceeds received from the Offering by $2.4 million and $1.5 million, respectively, due to the ongoing nature of the Offering.

All Offering costs incurred by the Company or its affiliated entities on behalf of the Company have been charged to additional paid-in capital on the accompanying consolidated/combined balance sheets. Offering costs were reclassified from deferred costs to stockholders’ equity when the Company commenced its Offering, and included all expenses incurred by the Company in connection with its Offering as of such date. As of December 31, 2013, such costs totaled $1.5 million. The table below shows compensation and reimbursements incurred and payable to the Advisor and its affiliates for services relating to the Offering during the year ended December 31, 2014 and 2013, respectively, and the associated amounts payable as of December 31, 2014 and December 31, 2013, which is recorded in due to affiliates on the Company's consolidated/combined balance sheets (in thousands):

F-23

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS

	Year Ended   December 31,				Payable as of
	2014		2013		December 31, 2014		December 31, 2013
Total compensation and reimbursement for services provided by the Advisor and its affiliates relating to the Offering	$	3,915	$	644	$	1,885	$	644

In addition to the above, the Company incurred Offering related expenses at the Georgia Tech Hotel, in which the Company owns the leasehold interest. The table below shows the fees incurred from and payable to Georgia Tech Hotel during the year ended December 31, 2014 and 2013, respectively, and the associated payable as of December 31, 2014 and December 31, 2013, which is recorded in due to affiliates on the Company's consolidated/combined balance sheets (in thousands):

	Year Ended   December 31,				Payable as of
	2014		2013		December 31, 2014		December 31, 2013
Total offering related costs incurred to leased hotel	$	60	$	—	$	60	$	—

Fees Paid in Connection With the Operations of the Company

Fees Paid to the Advisor

The Advisor receives an acquisition fee of 1.5% of the contract purchase price of each acquired property and 1.5% of the amount advanced for any loan or other investment. The Advisor may also be reimbursed for expenses incurred in the process of acquiring properties, in addition to third-party costs the Company may pay directly to, or reimburse the Advisor for. Additionally, the Company may reimburse the Advisor for legal expenses it or its affiliates directly incur in the process of acquiring properties in an amount not to exceed 0.1% of the contract purchase price of the Company’s assets acquired. Once the proceeds from the Offering have been fully invested, the aggregate amount of acquisition fees and financing coordination fees (as described below) may not exceed 1.9% of the contract purchase price, for any new investments, including reinvested proceeds, and the amount advanced for any loan or other investment, for all assets acquired. In no event will the total of all acquisition fees, acquisition expenses and any financing coordination fees (as described below) payable with respect the Company's portfolio exceed 4.5% of the contract purchase price or 4.5% of the amount advanced for a loan or other investment, in the aggregate for all Company investments.

If the Advisor provides services in connection with the origination or refinancing of any debt that the Company obtains and uses to acquire properties or to make other permitted investments, or that is assumed, directly or indirectly, in connection with the acquisition of properties, the Company will pay the Advisor or its assignees a financing coordination fee equal to 0.75% of the amount available and/or outstanding under such financing, subject to certain limitations.

The table below depicts the acquisition and financing coordination fees charged by the Advisor in connection with the operations of the Company for the year ended December 31, 2014 and 2013, respectively, and the associated payable as of December 31, 2014 and December 31, 2013, which is recorded in due to affiliates on the Company's consolidated/combined balance sheets (in thousands):

F-24

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS

	Year Ended   December 31,				Payable as of
	2014		2013		December 31, 2014		December 31, 2013
Acquisition fees	$	1,598	$	—	$	—	$	—
Financing coordination fees	815		—		—		—
	$	2,413	$	—	$	—	$	—

For its asset management services, the Company causes the OP to issue (subject to periodic approval by the board of directors) to the Advisor performance-based restricted partnership units of the OP ("Class B Units") on a quarterly basis in an amount equal to:

• the cost of the Company’s assets or the lower of the cost of assets and the applicable quarterly NAV, once the Company begins calculating NAV, multiplied by

•0.1875%, divided by

•the value of one share of common stock as of the last day of such calendar quarter, which is equal initially to $22.50 (the Offering price minus selling commissions and dealer manager fees) and, at such time as the Company calculates NAV, to per share NAV.

The Advisor is entitled to receive distributions on the vested and unvested Class B Units it receives in connection with its asset management subordinated participation at the same rate as distributions received on the Company’s common stock. Such distributions are in addition to the incentive fees the Advisor and its affiliates may receive from the Company, including, without limitation, the annual subordinated performance fee and the subordinated participation in net sales proceeds, the subordinated incentive listing distribution or the subordinated distribution upon termination of the advisory agreement, each as described below.

The restricted Class B Units do not become unrestricted Class B Units until certain performance conditions are satisfied, including the adjusted market value of the OP’s assets plus applicable distributions equals or exceeds the aggregate capital contributed by investors plus an amount equal to a 6.0% cumulative, pre-tax, non-compounded annual return to investors. Asset management services were performed by the Advisor for the year endedDecember 31, 2014, and 27,821 Class B Units have been issued as of December 31, 2014.

Fees Paid to the Sponsor

In connection with entering into the Grace Acquisition, the Company paid a $50.0 million customary earnest money deposit on May 27, 2014 which was partially funded by a $40.5 million draw on a $45.0 million promissory note with CARP, LLC, an entity under common control with the Sponsor (the "Affiliate Promissory Note"), which had a maturity date of May 27, 2015. As of December 31, 2014, the Affiliate Promissory Note had been repaid in full. See Note 7.

The table below shows the interest expense paid by the Company during the year ended December 31, 2014 and the associated payable as of December 31, 2014, which is recorded in due to affiliates on the Company's consolidated/combined balance sheets, and the interest expense paid by the Predecessor for the year ended December 31, 2013 and the associated payable as of December 31, 2013 (in thousands):

	Year Ended   December 31,				Payable as of
	2014		2013		December 31, 2014		December 31, 2013
Interest payment related to the Grace deposit promissory note	$	151	$	—	$	—	$	—

F-25

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS

Fees Paid to the Property Manager

The Company pays a property management fee of up to 4.0% of the monthly gross receipts from the Company's properties to the Property Manager. The Property Manager, in turn, pays a portion of the property management fees to the Sub-Property Manager or a third-party sub-property manager, as applicable. The Company also reimburses the Sub-Property Manager or a third-party sub-property manager, as applicable, for property level expenses, as well as fees and expenses of such sub-property manager. However, the Company will not reimburse such sub-property managers for general overhead costs or for the wages and salaries and other employee-related expenses of employees of such sub-property managers, other than employees or subcontractors who are engaged in the on-site operation, management, maintenance or access control of the Company’s properties.

The Company also will pay to the Sub-Property Manager an annual incentive fee equal to 15% of the amount by which the operating profit from the properties managed by the Sub-Property Manager for such fiscal year (or partial fiscal year) exceeds 8.5% of the total investment of such properties. The Company may, in the future, pay similar fees to third-party sub-property managers. No incentive fee was payable by the Company during the year ended December 31, 2014.

For these purposes, “total investment” means the sum of (i) the price paid to acquire the property, including closing costs, conversion costs, and transaction costs; (ii) additional invested capital; and (iii) any other costs paid in connection with the acquisition of the property, whether incurred pre- or post-acquisition.

The Predecessor paid the Sub-Property Manager a similar property management fee and incentive fee.

The table below shows the management fees and reimbursable expenses incurred by the Company during the year ended December 31, 2014 and the associated payable as of December 31, 2014, which is recorded in due to affiliates on the Company's consolidated/combined balance sheets, and the management fees and reimbursable expenses incurred by the Predecessor for the year ended December 31, 2013 and the associated payable as of December 31, 2013, which is recorded in accounts payable and accrued expenses on the Predecessor's consolidated/combined balance sheets (in thousands):

	Year Ended   December 31,				Payable as of
	2014		2013		December 31, 2014		December 31, 2013
Total management fees and reimbursable expenses incurred from Sub-Property Manager	$	2,579	$	2,445	$	228	$	158
Total management fees incurred from Property Manager	262		—		20		—
	$	2,841	$	2,445	$	248	$	158

The Company pays the Sub-Property Manager interest on the promissory notes payable for the property improvement plan relating to the Barceló Portfolio. See Note 7. The table below shows the interest expense paid by the Company during the year ended December 31, 2014, and the associated payable as of December 31, 2014, which is recorded in due to affiliates on the Company's consolidated/combined balance sheets, and the interest expense paid by the Predecessor during the year ended December 31, 2013 and the associated payable as of December 31, 2013, which is recorded in accounts payable and accrued expenses on the Predecessor's consolidated/combined balance sheets (in thousands):

	Year Ended   December 31,				Payable as of
	2014		2013		December 31, 2014		December 31, 2013
Interest related to the Property improvement plan promissory note	$	63	$	—	$	20	$	—

Fees Paid to Other Affiliates

The Company entered into an agreement with RCS Capital, the investment banking and capital markets division of the Dealer Manager ("RCS Capital") to provide strategic advisory services and investment banking services required in the

F-26

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS

ordinary course of the Company's business, such as performing financial analysis, evaluating publicly traded comparable companies and assisting in developing a portfolio composition strategy, a capitalization structure to optimize future liquidity options and structuring operations. The Company has recorded the payment of the costs associated with this agreement of $0.9 million in prepaid expenses and other assets on the Company's consolidated/combined balance sheets and amortizes the costs associated with this agreement over the estimated remaining life of the Offering.

RCS Advisory Services, LLC ("RCS Advisory") is paid compensation for services provided to the Company on behalf of the Advisor based on time and expenses incurred. Additionally, the Company entered into a $1.0 million agreement with RCS Advisory to provide transaction management services in connection with the Grace Acquisition.  As of December 31, 2014, the Company had paid $0.6 million on account of this agreement.  The Company will pay an additional $0.1 million under this agreement, after which no further amounts will become due.

The Company entered into an agreement with RCS Capital to provide strategic and financial advice and assistance in connection with the Grace Acquisition, such as performing financial advisory and analysis services, due diligence and negotiation of the financial aspects of the acquisition. The Company will be charged 0.25% of the total transaction value for these services and has accrued $4.5 million associated with this agreement for the year endedDecember 31, 2014 and the associated payable, which is recorded in due to affiliates on the Company's consolidated/combined balance sheets.

The table below depicts related party fees and reimbursements charged by the Dealer Manager and RCS Advisory in connection with the operations of the Company for the year ended December 31, 2014 and 2013, respectively, and the associated payable as of December 31, 2014 and December 31, 2013 (in thousands):

	Year Ended   December 31,				Payable as of
	2014		2013		December 31, 2014		December 31, 2013
Transaction fees and expenses	$	5,270	$	—	$	4,645	$	—
Advisory and investment banking fee	460		—		—		—
Total related party fees and reimbursements	$	5,730	$	—	$	4,645	$	—

In order to increase operating cash flows and the ability to pay distributions from operating cash flows, the Advisor may elect to waive certain fees. Because the Advisor may waive certain fees, cash flow from operations that would have been paid to the Advisor may be available to pay distributions to stockholders. The fees that may be forgiven are not deferrals and accordingly, will not be paid to the Advisor. In certain instances, to improve the Company’s working capital, the Advisor may elect to absorb a portion of the Company’s general and administrative costs. No expenses were absorbed by the Advisor for the year ended December 31, 2014.

The Company reimburses the Advisor’s costs of providing administrative services, subject to the limitation that the Company will not reimburse the Advisor for any amount by which the Company’s operating expenses at the end of the four preceding fiscal quarters exceeds the greater of (a) 2.0% of average invested assets and (b) 25.0% of net income other than any additions to reserves for depreciation, bad debt, impairment or other similar non-cash reserves and excluding any gain from the sale of assets for that period. Additionally, the Company reimburses the Advisor for personnel costs in connection with other services; however, the Company will not reimburse the Advisor for personnel costs, including executive salaries, in connection with services for which the Advisor receives acquisition fees, acquisition expenses or real estate commissions.

The Advisor at its election may also contribute capital to enhance the Company’s cash position for working capital and distribution purposes. Any contributed capital amounts are not reimbursable to the Advisor. Further, any capital contributions are made without any corresponding issuance of common or preferred shares. There were no contributions to capital from the Advisor for the year ended December 31, 2014 and 2013.

Fees Paid in Connection with the Liquidation or Listing of the Company’s Real Estate Assets

The Company may pay the Advisor an annual subordinated performance fee calculated on the basis of the Company’s total return to stockholders, payable monthly in arrears, such that for any year in which the Company’s total return on stockholders’ capital exceeds 6.0% per annum, the Advisor will be entitled to 15.0% of the excess total return but not to exceed 10.0% of the

F-27

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS

aggregate total return for such year. This fee will be payable only upon the sale of assets, other disposition or refinancing of such assets, which results in the return on stockholders’ capital exceeding 6.0% per annum. No subordinated performance fees were incurred during the year ended December 31, 2014.

The Company may pay a brokerage commission to the Advisor on the sale of property, not to exceed the lesser of 2.0% of the contract sale price of the property and 50.0% of the total brokerage commission paid if a third-party broker is also involved; provided, however, that in no event may the real estate commissions paid to the Advisor, its affiliates and unaffiliated third parties exceed the lesser of 6.0% of the contract sales price and a reasonable, customary and competitive real estate commission, in each case, payable to the Advisor if the Advisor or its affiliates, as determined by a majority of the independent directors, provided a substantial amount of services in connection with the sale. No such fees were incurred during the year ended December 31, 2014.

The Company will pay the Special Limited Partner a subordinated participation in the net sales proceeds of the sale of real estate assets of 15.0% of the remaining net sale proceeds after return of capital contributions to investors plus payment to investors of a 6.0% cumulative, pre-tax, non-compounded annual return on the capital contributed by investors. The Special Limited Partner will not be entitled to the subordinated participation in net sale proceeds unless the Company’s investors have received a 6.0% cumulative non-compounded return on their capital contributions plus the return of their capital. No such participation became due and payable during the year ended December 31, 2014.

If the common stock of the Company is listed on a national exchange, the Company will pay the Special Limited Partner a subordinated incentive listing distribution of 15.0% of the amount by which the Company’s market value plus distributions exceeds the aggregate capital contributed by investors plus an amount equal to a 6.0% cumulative, pre-tax non-compounded annual return to investors. The Special Limited Partner will not be entitled to the subordinated incentive listing fee unless investors have received a 6.0% cumulative, pre-tax non-compounded return on their capital contributions plus the return of their capital. No such distributions were incurred during the year ended December 31, 2014. Neither the Special Limited Partner nor any of its affiliates can earn both the subordination participation in the net sale proceeds and the subordinated incentive listing distribution.

Upon termination or non-renewal of the Advisory agreement with the Advisor, with or without cause, the Special Limited Partner will be entitled to receive distributions from the OP equal to 15.0% of the amount by which the sum of the Company’s market value plus distributions exceeds the sum of the aggregate capital contributed by investors plus an amount equal to a 6.0% cumulative, pre-tax, non-compounded annual return to investors. The Special Limited Partner may elect to defer its right to receive a subordinated distribution upon termination until either a listing on a national securities exchange or other liquidity event occurs. No such distributions were incurred during the year ended December 31, 2014.

Note 13 - Economic Dependency

Under various agreements, the Company has engaged or will engage the Advisor and its affiliates to provide certain services that are essential to the Company, including asset management services, supervision of the management, asset acquisition and disposition decisions, the sale of shares of common stock available for issue, transfer agency services, as well as other administrative responsibilities for the Company including accounting services and investor relations.

As a result of these relationships, the Company is dependent upon the Advisor and its affiliates. In the event that these companies are unable to provide the Company with the respective services, the Company will be required to find alternative providers of these services.

Note 14 - Income Taxes

We intend to elect and qualify to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with our tax year ended December 31, 2014. In order to qualify as a REIT, we must annually distribute to our stockholders 90% of our REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding net capital gain, and must comply with various other organizational and operational requirements. Distributions to stockholders for the tax year ended December 31, 2014 were all deemed to be return of capital.

F-28

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS

The components of income tax expense for the year ended December 31, 2014 are presented in the following table, in thousands. There was no income tax expense for the year ended December 31, 2013.

	Year Ended December 31,
	2014			2013
Current:
Federal	$	633		$	—
State	91			—
	724			—
Deferred:
Federal	(116		)	—
State	(17		)	—
	(133		)	—
Income tax expense	$	591		$	—

A reconciliation of the statutory federal income tax benefit of the Company's income tax expense is presented in the following table, in thousands. There was no income tax expense for the year ended December 31, 2013.

	Year Ended December 31,
	2014			2013
Statutory federal income tax benefit	$	(4,845	)	$	—
Effect of non-taxable REIT loss	5,361			—
State income tax expense, net of federal tax benefit	73			—
Other	2			—
Income tax expense	$	591		$	—

The tax effect of each type of temporary difference and carryforward, that gives rise to the deferred tax assets and liabilities as of December 31, 2014 are presented in the following table, in thousands. There were no temporary differences or carryforwards for the year ended December 31, 2013.

	Year Ended December 31,
	2014			2013
Deferred tax asset:
Employee-related compensation	$	152		$	—
Other	11			—
	163			—
Deferred tax liability
Investments in unconsolidated joint ventures	(30		)	—
Total deferred tax liability	(30		)	—
Net deferred tax asset	$	133		$	—

As of December 31, 2014, the Company had a net deferred tax asset of $0.1 million. The Company believes that it is more likely than not that the TRS will generate sufficient taxable income to realize in full this deferred tax asset. Accordingly, no valuation allowance has been recorded as of December 31, 2014.

As of December 31, 2014, the tax years that remain subject to examination by major tax jurisdictions include 2013 and 2014.

F-29

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS

Note 15 – Quarterly Results (Unaudited)

Presented below is a summary of the unaudited quarterly financial information for the years ended December 31, 2014 2013:

	Quarters Ended
	Predecessor			Successor
(In thousands, except for share amounts)	Period from January 1 to March 20, 2014			Period from March 21 to March 31, 2014			June 30, 2014			September 30, 2014			December 31, 2014
Total revenues	$	8,245		$	1,320		$	11,460		$	11,387		$	10,704
Net loss attributable to stockholders	$	(605	)	$	(5,282	)	$	(82	)	$	(3,549	)	$	(5,928	)
Basic and diluted weighted average common shares outstanding	NA			68,622			398,796			2,792,350			7,959,303
Basic and diluted net loss per share attributable to stockholders	NA			$	(76.97	)	$	(0.21	)	$	(1.27	)	$	(0.74	)

	Quarters Ended
	Predecessor
(In thousands, except for share amounts)	March 31, 2013			June 30, 2013		September 30, 2013		December 31, 2013
Total revenues	$	8,776		$	10,988	$	10,413	$	9,620
Net income (loss) attributable to stockholders	$	(971	)	$	978	$	468	$	(370	)
Basic and diluted weighted average common shares outstanding	NA			NA		NA		NA
Basic and diluted net loss per share attributable to stockholders	NA			NA		NA		NA

___________________________________________________

NA - not applicable

Note 16 - Subsequent Events

The Company has evaluated subsequent events through the filing of this Annual Report on Form 10-K, and determined that there have not been any events that have occurred that would require adjustments to disclosures in the accompanying consolidated financial statements except for the following transactions:

Sales of Common Stock

As of March 15, 2015, the Company had 15.1 million shares of common stock outstanding, including unvested restricted shares and shares issued under the DRIP. Total gross proceeds, net of repurchases, from these issuances were $375.1 million, including proceeds from shares issued under the DRIP. As of March 15, 2015, the aggregate value of all share issuances was$377.2 million based on a per share value of $25.00 (or $23.75 per share for shares issued under the DRIP).

Total capital raised to date, including shares issued under the DRIP, is as follows (in thousands):

Source of Capital	Inception to December 31, 2014		January 1, 2015 to March 15, 2015		Total
Common stock	$	252,854	$	122,233	$	375,087

Distributions Paid

F-30

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS

On January 2, 2015, the Company paid distributions of $1.4 million to stockholders of record during the month of December 2014. Approximately $0.7 million of such distributions were paid in cash, while $0.7 million was reinvested to purchase 27,223 shares under the DRIP. On February 2, 2015, the Company paid distributions of $1.6 million to stockholders of record during the month of January 2015. Approximately $0.8 million of such distributions were paid in cash, while $0.8 million was reinvested to purchase 31,525 shares under the DRIP. On March 2, 2015, the Company paid distributions of $1.7 million to stockholders of record during the month of February 2015. Approximately $0.9 million of such distributions were paid in cash, while $0.8 million was reinvested to purchase 33,643 shares under the DRIP.

Acquisition

On February 27, 2015, the Company closed the Grace Acquisition (See Note 1 - Organization).

F-31

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.

Real Estate and Accumulated Depreciation

Schedule III

December 31, 2014

(dollar amounts in thousands)

					Initial Cost				Subsequent Costs Capitalized				Gross Amount at December 31, 2014 (1)
Property	U.S. State or Country	Acquisition Date	Debt at December 31, 2014		Land		Building and Improvements		Land		Building and Improvements		Land		Building and Improvements		Total		Accumulated Depreciation (2)
Baltimore Courtyard Inner Harbor Hotel	MD	2014	$	24,980	$	4,960	$	34,343	$	—	$	1	$	4,960	$	34,344	$	39,304	$	(679	)
Courtyard Providence Downtown Hotel	RI	2014	20,520		4,724		29,388		—		1,238		4,724		30,626		35,350		(586		)
Homewood Suites Stratford	CT	2014	—		2,377		13,874		—		2,332		2,377		16,206		18,583		(304		)
Total			$	45,500	$	12,061	$	77,605	$	—	$	3,571	$	12,061	$	81,176	$	93,237	$	(1,569	)

___________________________________

(1) The tax basis of aggregate land, buildings and improvements as of December 31, 2014 is $92.3 million.

(2) Each of the properties has a depreciable life of: 40 years for buildings, 15 years for improvements.

A summary of activity for real estate and accumulated depreciation for the period from March 21 to December 31, 2014⁽¹⁾:

	For the Period from March 21 to December 31, 2014
Land, buildings and improvements, at cost:
Balance at March 21, 2014	$	89,666
Additions-Acquisitions	—
Capital improvements	3,571
Balance at December 31, 2014	$	93,237
Accumulated depreciation and amortization:
Balance at March 21, 2014	$	—
Depreciation expense	(1,569		)
Balance at December 31, 2014	$	(1,569	)

___________________________________

(1) The change in the real estate investments for the Predecessor has not been presented because the land, building and improvements were recorded by the Predecessor at the pre-acquisition basis.

F-32

EX-10.20

Exhibit 10.20

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (“Agreement”) is made and entered into as of the 31st day of December, 2014, by and between American Realty Capital Hospitality Trust, Inc., a Maryland corporation (the “Company”), and William M. Kahane, Stanley R. Perla, Abby M. Wenzel, Robert H. Burns, Nicholas S. Schorsch, P. Sue Perrotty, Jonathan P. Mehlman, Edward T. Hoganson, Nicholas Radesca, American Realty Capital Hospitality Advisors, LLC, AR Capital, LLC and RCS Capital Corporation (each, an “Indemnitee”).

WHEREAS, at the request of the Company, Indemnitee currently serves as a director, officer or service provider of the Company and may, therefore, be subjected to claims, suits or proceedings arising as a result of his or her service; and

WHEREAS, as an inducement to Indemnitee to continue to serve as such director, officer or service provider, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings; and

WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses;

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

Section 1.Definitions. For purposes of this Agreement:

(a)“Applicable Legal Rate” means a fixed rate of interest equal to the applicable federal rate for mid-term debt instruments as of the day that it is determined that Indemnitee must repay any advanced expenses.

(b)“Change in Control” means a change in control of the Company occurring after the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if, after the Effective Date (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of all of the Company’s then-outstanding securities entitled to vote generally in the election of directors without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person’s attaining such percentage interest; (ii) the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) at any time, a majority of the members of the Board of Directors are not individuals (A) who were directors as of the Effective Date or (B) whose

election by the Board of Directors or nomination for election by the Company’s stockholders was approved by the affirmative vote of at least two-thirds of the directors then in office who were directors as of the Effective Date or whose election for nomination for election was previously so approved.

(c)“Corporate Status” means the status of a person as a present or former director, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company. As a clarification and without limiting the circumstances in which Indemnitee may be serving at the request of the Company, service by Indemnitee shall be deemed to be at the request of the Company if Indemnitee serves or served as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise (i) of which a majority of the voting power or equity interest is owned directly or indirectly by the Company or (ii) the management of which is controlled directly or indirectly by the Company.

(d)“Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification and/or advance of Expenses is sought by Indemnitee.

(e)“Effective Date” means the date set forth in the first paragraph of this Agreement.

(f)“Expenses” means any and all reasonable and out-of-pocket attorneys’ fees and costs, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties and any other disbursements or expenses incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in or otherwise participating in a Proceeding. Expenses shall also include Expenses incurred in connection with any appeal resulting from any Proceeding including, without limitation, the premium for, security for and other costs relating to any cost bond supersedeas bond or other appeal bond or its equivalent.

(g)“Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement or of other indemnitees under similar indemnification agreements), or (ii) any other party to or participant or witness in the Proceeding giving rise to a claim for indemnification or advance of Expenses hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

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(h)“Proceeding” means any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other proceeding, whether brought by or in the right of the Company or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal, administrative or investigative (formal or informal) nature, including any appeal therefrom, except one pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee. If Indemnitee reasonably believes that a given situation may lead to or culminate in the institution of a Proceeding, such situation shall also be considered a Proceeding.

Section 2.Services by Indemnitee. Indemnitee will serve as a director, officer or service provider of the Company. However, this Agreement shall not impose any independent obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company. This Agreement shall not be deemed an employment contract between the Company (or any other entity) and Indemnitee.

Section 3.General. Subject to the limitations in Section 5, the Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) as otherwise permitted by Maryland law in effect on the Effective Date and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the Effective Date. Subject to the limitations in Section 5, the rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law (the “MGCL”).

Section 4.Standard for Indemnification. Subject to the limitations in Section 5, if, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be, made a party to any Proceeding, the Company shall indemnify Indemnitee against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with any such Proceeding unless it is established by clear and convincing evidence that (a) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty, (b) Indemnitee actually received an improper personal benefit in money, property or services or (c) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his or her conduct was unlawful.

Section 5.Certain Limits on Indemnification. Notwithstanding any other provision of this Agreement (other than Section 6), Indemnitee shall not be entitled to:

(a) indemnification for any loss or liability unless all of the following conditions are met: (i) Indemnitee has determined, in good faith, that the course of conduct that caused the loss or liability was in the best interests of the Company; (ii) Indemnitee was acting on behalf of or performing services for the Company; (iii) such loss or liability was not the result of (A) gross negligence or willful misconduct, in the case that the Indemnitee is an independent director of the Company or (B) negligence or misconduct, in the case that the Indemnitee is not

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an independent director of the Company; and (iv) such indemnification is recoverable only out of the Company’s net assets and not from the Company’s stockholders;

(b) indemnification for any loss or liability arising from an alleged violation of federal or state securities laws unless one or more of the following conditions are met: (i) there has been a successful adjudication on the merits of each count involving alleged material securities law violations as to Indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to Indemnitee; or (iii) a court of competent jurisdiction approves a settlement of the claims against Indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the Securities and Exchange Commission and of the published position of any state securities regulatory authority in which securities of the Company were offered or sold as to indemnification for violations of securities laws;

(c) indemnification hereunder if the Proceeding was one by or in the right of the Company and Indemnitee is adjudged to be liable to the Company;

(d) indemnification hereunder if Indemnitee is adjudged to be liable on the basis that personal benefit was improperly received in any Proceeding charging improper personal benefit to Indemnitee, whether or not involving action in the Indemnitee’s Corporate Status; or

(e) indemnification or advance of Expenses hereunder if the Proceeding was brought by Indemnitee, unless: (i) the Proceeding was brought to enforce indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Section 12 of this Agreement, or (ii) the Company’s charter or Bylaws, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise.

Section 6.Court-Ordered Indemnification. Subject to the limitations in Section 5(a) and (b), a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification of Indemnitee by the Company in the following circumstances:

(a)if such determines that Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the Expenses of securing such reimbursement; or

(b)if such court determines that Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses.

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Section 7.Indemnification for Expenses of an Indemnitee Who is Wholly or Partly Successful. Subject to the limitations in Section 5, to the extent that Indemnitee was or is, by reason of his or her Corporate Status, made a party to (or otherwise becomes a participant in) any Proceeding and is successful, on the merits or otherwise, in the defense of such Proceeding, Indemnitee shall be indemnified for all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with each such claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section 7, and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

Section 8.Advance of Expenses for an Indemnitee. If, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be, made a party to any Proceeding, the Company shall, without requiring a preliminary determination of Indemnitee’s ultimate entitlement to indemnification hereunder, advance all reasonable Expenses incurred by or on behalf of Indemnitee in connection with (a) such Proceeding which is initiated by a third party who is not a stockholder of the Company, or (b) such Proceeding which is initiated by a stockholder of the Company acting in his or her capacity as such and for which a court of competent jurisdiction specifically approves such advancement, and which relates to acts or omissions with respect to the performance of duties or services on behalf of the Company, within ten days after the receipt by the Company of a statement or statements requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee, together with the Applicable Legal Rate of interest thereon, relating to claims, issues or matters in the Proceeding as to which it shall ultimately be established, by clear and convincing evidence, that the standard of conduct has not been met by Indemnitee and which have not been successfully resolved as described in Section 7 of this Agreement. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee’s financial ability to repay such advanced Expenses and without any requirement to post security therefor.

Section 9.Indemnification and Advance of Expenses as a Witness or Other Participant. Subject to the limitations in Section 5, to the extent that Indemnitee is or may be, by reason of Indemnitee’s Corporate Status, made a witness or otherwise asked to participate in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party, Indemnitee shall be advanced all reasonable Expenses and indemnified against all

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Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith within ten days after the receipt by the Company of a statement or statements requesting any such advance or indemnification from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee.

Section 10.Procedure for Determination of Entitlement to Indemnification.

(a)To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. Indemnitee may submit one or more such requests from time to time and at such time(s) as Indemnitee deems appropriate in Indemnitee’s sole discretion. The officer of the Company receiving any such request from Indemnitee shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.

(b)Upon written request by Indemnitee for indemnification pursuant to Section 10(a) above, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, which Independent Counsel shall be selected by Indemnitee and approved by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL, which approval shall not be unreasonably withheld; or (ii) if a Change in Control shall not have occurred, (A) by the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors or, if such a quorum cannot be obtained, then by a majority vote of a duly authorized committee of the Board of Directors consisting solely of one or more Disinterested Directors, (B) if Independent Counsel has been selected by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL and approved by Indemnitee, which approval shall not be unreasonably withheld, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee or (C) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 10(b). Any Expenses incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.

(c)The Company shall pay the reasonable fees and expenses of Independent Counsel, if one is appointed.

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Section 11.Presumptions and Effect of Certain Proceedings.

(a)In making any determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 10(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.

(b)The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, upon a plea of nolo contendere or its equivalent, or entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.

(c)The knowledge and/or actions, or failure to act, of any other director, officer, employee or agent of the Company or any other director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise shall not be imputed to Indemnitee for purposes of determining any other right to indemnification under this Agreement.

Section 12.Remedies of Indemnitee.

(a)If (i) a determination is made pursuant to Section 10(b) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Sections 8 or 9 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 10(b) of this Agreement within 60 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Sections 7 or 9 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification pursuant to any other section of this Agreement or the charter or Bylaws of the Company is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of Maryland, or in any other court of competent jurisdiction, of Indemnitee’s entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence a proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 12(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce his or her rights under Section 7 of this Agreement. Except as set forth herein, the provisions of Maryland law (without regard to its conflicts of laws rules) shall apply to any such arbitration. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

(b)In any judicial proceeding or arbitration commenced pursuant to this Section 12, Indemnitee shall be presumed to be entitled to indemnification or advance of

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Expenses, as the case may be, under this Agreement and the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be. If Indemnitee commences a judicial proceeding or arbitration pursuant to this Section 12, Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 8 of this Agreement until a final determination is made with respect to Indemnitee’s entitlement to indemnification (as to which all rights of appeal have been exhausted or lapsed). The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all of the provisions of this Agreement.

(c)If a determination shall have been made pursuant to Section 10(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification.

(d)In the event that Indemnitee is successful in seeking, pursuant to this Section 12, a judicial adjudication of or an award in arbitration to enforce Indemnitee’s rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him or her in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.

(e)Interest shall be paid by the Company to Indemnitee at the maximum rate allowed to be charged for judgments under the Courts and Judicial Proceedings Article of the Annotated Code of Maryland for amounts which the Company pays or is obligated to pay for the period (i) commencing with either the tenth day after the date on which the Company was requested to advance Expenses in accordance with Sections 8 or 9 of this Agreement or the 60^th day after the date on which the Company was requested to make the determination of entitlement to indemnification under Section 10(b) of this Agreement, as applicable, and (ii) and ending on the date such payment is made to Indemnitee by the Company.

Section 13.Defense of the Underlying Proceeding.

(a)Indemnitee shall notify the Company promptly in writing upon being served with any summons, citation, subpoena, complaint, indictment, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder and shall include with such notice a description of the nature of the Proceeding and a summary of the facts underlying the Proceeding. The failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the

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Company’s ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.

(b)Subject to the provisions of the last sentence of this Section 13(b) and of Section 13(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 13(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admission of fault of Indemnitee, (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee, or (iii) would impose any Expense, judgment, fine, penalty or limitation on Indemnitee. This Section 13(b) shall not apply to a Proceeding brought by Indemnitee under Section 12 of this Agreement.

(c)Notwithstanding the provisions of Section 13(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s Corporate Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that Indemnitee may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee’s choice, subject to the prior approval of the Company, which approval shall not be unreasonably withheld, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s choice, subject to the prior approval of the Company, which approval shall not be unreasonably withheld, at the expense of the Company (subject to Section 12(d) of this Agreement), to represent Indemnitee in connection with any such matter.

Section 14.Non-Exclusivity; Survival of Rights; Subrogation.

(a)The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise. Unless consented to in writing by Indemnitee, no amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee

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in his or her Corporate Status prior to such amendment, alteration or repeal, regardless of whether a claim with respect to such action or inaction is raised prior or subsequent to such amendment, alteration or repeal. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right or remedy shall be cumulative and in addition to every other right or remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion of any right or remedy hereunder, or otherwise, shall not prohibit the concurrent assertion or employment of any other right or remedy.

(b)In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

Section 15.Insurance. The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee by reason of his or her Corporate Status and covering the Company for any indemnification or advance of Expenses made by the Company to Indemnitee for any claims made against Indemnitee by reason of his or her Corporate Status. Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and Expenses incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous sentence. The purchase, establishment and maintenance of any such insurance shall not in any way limit or affect the rights or obligations of the Company or Indemnitee under this Agreement except as expressly provided herein, and the execution and delivery of this Agreement by the Company and Indemnitee shall not in any way limit or affect the rights or obligations of the Company under any such insurance policies. If, at the time the Company receives notice from any source of a Proceeding to which Indemnitee is a party or a participant (as a witness or otherwise), the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies.

Section 16.Coordination of Payments. The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

Section 17.Reports to Stockholders. To the extent required by the MGCL, the Company shall report in writing to its stockholders the payment of any amounts for indemnification of, or advance of Expenses to, Indemnitee under this Agreement arising out of a Proceeding by or in the right of the Company with the notice of the meeting of stockholders of the Company next following the date of the payment of any such indemnification or advance of Expenses or prior to such meeting.

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Section 18.Duration of Agreement; Binding Effect.

(a)This Agreement shall continue until and terminate on the later of (i) the date that Indemnitee shall have ceased to serve as a director, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company and (ii) the date that Indemnitee is no longer subject to any actual or possible Proceeding (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant to Section 12 of this Agreement).

(b)The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company, and shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.

(c)The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

(d)The Company and Indemnitee agree that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable and difficult of proof, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance, Indemnitee shall not be precluded from seeking or obtaining any other relief to which Indemnitee may be entitled. Indemnitee shall further be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds or other undertakings in connection therewith. The Company acknowledges that, in the absence of a waiver, a bond or undertaking may be required of Indemnitee by a court, and the Company hereby waives any such requirement of such a bond or undertaking.

Section 19.Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality

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and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

Section 20.Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.

Section 21.Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

Section 22.Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

Section 23.Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, on the day of such delivery, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:

(a)If to Indemnitee, to the address set forth on the signature page hereto.

(b)If to the Company, to:

    American Realty Capital Hospitality Trust, Inc.

    405 Park Avenue, 14th Floor

    New York, NY 10022

    Attn: General Counsel

or to such other address as may have been furnished in writing to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

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Section 24.Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without regard to its conflicts of laws rules.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

American Realty Capital HOSPITALITY trust, Inc.

By: /s/ Johnathan P. Mehlman

Name: Jonathan P. Mehlman

Title: Chief Executive Officer and President

INDEMNITEE

/s/ Nicholas S. Schorsch

Name: Nicholas S. Schorsch

INDEMNITEE

/s/ William M. Kahane

Name: William M. Kahane

INDEMNITEE

/s/ Nicholas Radesca

Name: Nicholas Radesca

INDEMNITEE

/s/ Jonathan P. Mehlman

Name: Jonathan P. Mehlman

INDEMNITEE

/s/ Edward T. Hoganson

Name: Edward T. Hoganson

INDEMNITEE

/s/ Abby M. Wenzel

Name: Abby M. Wenzel

INDEMNITEE

/s/ Stanley R. Perla

Name: Stanley R. Perla

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INDEMNITEE

/s/ Robert H. Burns

Name: Robert H. Burns

INDEMNITEE

/s/ P. Sue Perrotty

Name: P. Sue Perrotty

INDEMNITEE

American Realty CAPITAL HOSPITALITY

ADVISORS, LLC

By: AMERICAN REALTY CAPITAL HOSPITALITY

SPECIAL LIMITED PARTNERSHIP, LLC,

its sole member

By: American Realty Capital IX, LLC, its sole member

By: AR Capital, LLC, its sole member

By: /s/ William M. Kahane
Name: William M. Kahane
Title: Manager

INDEMNITEE

AR CAPITAL, LLC

By: /s/ William M. Kahane

Name: William M. Kahane

Title: Manager

INDEMNITEE

RCS CApital CORPORATION

By: /s/ James A. Tanaka

Name: James A. Tanaka

Title: Authorized Signatory

EXHIBIT A

AFFIRMATION AND UNDERTAKING TO REPAY EXPENSES ADVANCED

To: The Board of Directors of American Realty Capital Hospitality Trust, Inc.

Re: Affirmation and Undertaking

Ladies and Gentlemen:

This Affirmation and Undertaking is being provided pursuant to that certain Indemnification Agreement, dated the 31st day of December, 2014, by and between American Realty Capital Hospitality Trust, Inc., a Maryland corporation (the “Company”), and the undersigned Indemnitee (the “Indemnification Agreement”), pursuant to which I am entitled to advance of Expenses in connection with [Description of Proceeding] (the “Proceeding”).

Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.

I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm my good faith belief that at all times, insofar as I was involved as a director of the Company, in any of the facts or events giving rise to the Proceeding, I (1) did not act with bad faith or active or deliberate dishonesty, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.

In consideration of the advance of Expenses by the Company for reasonable attorneys’ fees and related Expenses incurred by me in connection with the Proceeding (the “Advanced Expenses”), I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses, together with the Applicable Legal Rate of interest thereon, relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established.

IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this _____ day of _______________, 20____.

_____________________________

Name:

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EX-10.21

Exhibit 10.21

AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT

OF

ARC HOSPITALITY PORTFOLIO I HOLDCO, LLC

AMONG

AMERICAN REALTY CAPITAL HOSPITALITY PORTFOLIO MEMBER, LP,

W2007 Equity Inns Senior Mezz, LLC

and

WILLIAM G. POPEO

Dated: February 27, 2015

IN RELIANCE UPON CERTAIN EXEMPTIONS FROM REGISTRATION AND QUALIFICATION, THE LIMITED LIABILITY COMPANY INTERESTS DESCRIBED IN AND ISSUED PURSUANT TO THIS AGREEMENT HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT (AS DEFINED HEREIN) OR THE SECURITIES LAWS OF ANY STATE OR THE DISTRICT OF COLUMBIA. ACCORDINGLY, NO SUCH LIMITED LIABILITY COMPANY INTEREST MAY BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT AND ANY APPLICABLE FEDERAL OR STATE SECURITIES LAWS. ANY VIOLATION OF SUCH PROVISIONS COULD EXPOSE THE SELLING MEMBER AND THE COMPANY TO LIABILITY.

INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. IN MAKING THE DECISION WHETHER TO BE A MEMBER IN THE COMPANY INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY AND THE TERMS OF THE LIMITED LIABILITY COMPANY INTERESTS.

TABLE OF CONTENTS

		Page
ARTICLE 1 DEFINITIONS		2
1.1	Definitions	2
1.2	Terms Generally	19
ARTICLE 2 THE COMPANY AND ITS BUSINESS		20
2.1	Members; Continuation of the Company	20
2.2	Company Name	20
2.3	Term	20
2.4	Filing of Amendments to the Certificate	20
2.5	Purpose	20
2.6	Principal Office; Registered Agent	20
2.7	Classes of Members	20
2.8	Names and Addresses of the Members	22
2.9	Authorized Persons	23
2.10	Representations by the Class B Member	23
2.11	Representations by the Class A Member	25
2.12	Certain Tax Matters	26
ARTICLE 3 MANAGEMENT OF COMPANY BUSINESS; POWERS AND DUTIES OF THE MEMBERS		28
3.1	Management of the Company Business	28
3.2	Appointment of Initial Managing Member	28
3.3	Class A Member’s Rights Following a Changeover Event	28
3.4	Buy/Sell Following a Changeover Event; Remedy Not Exclusive	31
3.5	The Class B Member’s Rights Following a Changeover Event	34
3.6	Significant Decisions	35
3.7	Class B Member Affiliate Contracts	37
3.8	Cooperation	37
3.9	The Class A Member’s Right to Cure Senior Loan Defaults	38
ARTICLE 4 RIGHTS AND DUTIES OF MEMBERS		38
4.1	Duties and Obligations of the Class B Member	38
4.2	Prohibition of Other Activities of the Class B Member	39
4.3	Limitation on Member Liability; Indemnification	39
4.4	Compensation of Members and their Affiliates	40
4.5	Use of Company Property	40
4.6	Tax Contests	40
4.7	Duty of the Class A Member	41
ARTICLE 5 BOOKS AND RECORDS; ANNUAL REPORTS; EXPENSES AND OTHER MATTERS		41
5.1	Books of Account	41
5.2	Availability of Books of Account	41
5.3	Annual Reports and Statements; Annual Budgets	42
5.4	Class A Member’s Expenses	42
5.5	Cash Management Account	43

i

5.6	Plan Assets	43
5.7	Insurance	43
5.8	Casualty/Condemnation	44
5.9	Existence; Compliance with Legal Requirements	44
5.10	Impositions and Other Claims	44
5.11	Litigation	45
5.12	Access to Properties	45
5.13	Notice of Default	45
5.14	Intentionally Omitted	45
5.15	Conduct of Business	45
5.16	Standard of Operation	45
5.17	No Sales of Assets	46
5.18	Compliance with Senior Loans	46
5.19	Intentionally Omitted	46
5.20	Prohibited Persons	46
5.21	Forgiveness of Debt	46
ARTICLE 6 CAPITAL CONTRIBUTIONS,  LOANS AND LIABILITIES		46
6.1	Initial Capital Contributions of the Members	46
6.2	Protective Capital/Additional Capital	46
6.3	Application of Capital	48
6.4	Capital of the Company	48
ARTICLE 7 INTENTIONALLY OMITTED		48
ARTICLE 8 APPLICATIONS AND DISTRIBUTIONS OF AVAILABLE CASH; REDEMPTION		48
8.1	Distributions of Cash	48
8.2	Sales; Financings; Qualified Capital Raises	49
8.3	Redemption Right	49
8.4	Distribution of Capital Event Proceeds	50
8.5	Distribution After Changeover Event	50
ARTICLE 9 TRANSFER OF COMPANY INTERESTS		50
9.1	Restrictions on Transfers by the Class B Member	50
9.2	Transfers by the Class A Member	51
9.3	Assignment Binding on Company	52
9.4	Bankruptcy of a Member	52
9.5	Substituted Members	52
9.6	Acceptance of Prior Acts	53
9.7	Additional Limitations	53
9.8	Restraining Order; Specific Performance; Other Remedies	53
ARTICLE 10 DISSOLUTION OF THE COMPANY; WINDING UP AND DISTRIBUTION OF ASSETS		54
10.1	Dissolution	54

ii

10.2	Winding Up	54
10.3	Distribution of Assets	55
ARTICLE 11 AMENDMENTS		55
11.1	Amendments	55
11.2	Additional Members	56
ARTICLE 12 MISCELLANEOUS		56
12.1	Further Assurances	56
12.2	Notices	56
12.3	Remedies of the Class B Member	57
12.4	Exculpation	57
12.5	Headings and Captions	57
12.6	Variance of Pronouns	57
12.7	Counterparts	57
12.8	Governing Law	57
12.9	Consent to Jurisdiction	57
12.10	Arbitration	58
12.11	Partition	59
12.12	Invalidity	59
12.13	Successors and Assigns	59
12.14	Entire Agreement	59
12.15	Waivers	59
12.16	No Brokers	59
12.17	Press Releases	59
12.18	No Third Party Beneficiaries	60
12.19	Construction of Documents	60
12.20	Time of Essence	60

iii

SCHEDULES

Schedule A	Properties
Schedule 1.1(a)	Allocated Amounts
Schedule 1.1(b)	Mortgage Loan Documents
Schedule 1.1(c)	First Mezzanine Loan Documents
Schedule 5.15(a)	Special Purpose Covenants
Schedule 5.15(b)	Anti-Terrorism and Anti-Money Laundering Laws; Embargoed Persons
Schedule 6.1	Initial Capital Contributions and Percentage Interests of the Members

iv

Amended and Restated LIMITED LIABILITY COMPANY AGREEMENT
OF
ARC HOSPITALITY PORTFOLIO I HOLDCO, LLC

This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT, dated as of February 27, 2014, is made by and among AMERICAN REALTY CAPITAL HOSPITALITY PORTFOLIO MEMBER, LP, a Delaware limited partnership (together with its successors and permitted assigns each in such Person’s capacity as a member of the Company, the “Class B Member”), W2007 Equity Inns Senior Mezz, LLC, a Delaware limited liability company (together with its successors and permitted assigns each in such Person’s capacity as a member of the Company, the “Class A Member”), and WILLIAM G. POPEO, as the initial Special Member.

RECITALS

WHEREAS, the Company (as defined herein) was formed under the Act pursuant to a Certificate of Formation of the Company, which was filed with the Secretary of State of the State of Delaware on October 7, 2014, and that certain Limited Liability Company Agreement, dated as of November 7, 2014, by the Class B Member, as the sole member (the “Existing LLC Agreement”);

WHEREAS, the Company (i) is the ninety-nine percent (99%) limited partner of ARC Hospitality Portfolio I Mezz, LP, a Delaware limited partnership (the “First Mezzanine Borrower”), and (ii) is the sole member of ARC Hospitality Portfolio I Mezz GP, LLC, a Delaware limited liability company (the “Mezzanine GP”), which in turn is the one percent (1%) general partner of First Mezzanine Borrower;

WHEREAS, the First Mezzanine Borrower is (i) the sole member of each of ARC Hospitality Portfolio I Owner, LLC, a Delaware limited liability company (“LLC Borrower”), ARC Hospitality Portfolio I BHGL Owner, LLC, a Delaware limited liability company (“BHGL Borrower”), ARC Hospitality Portfolio I PXGL Owner, LLC, a Delaware limited liability company (“PXGL Borrower”), ARC Hospitality Portfolio I GBGL Owner, LLC, a Delaware limited liability company (“GBGL Borrower”), ARC Hospitality Portfolio I NFGL Owner, LLC, a Delaware limited liability company (“NFGL Borrower”), ARC Hospitality Portfolio I MBGL 1000 Owner, LLC, a Delaware limited liability company (“MBGL 1000 Borrower”), ARC Hospitality Portfolio I MBGL 950 Owner, LLC, a Delaware limited liability company (“MBGL 950 Borrower”), (ii) the sole member of ARC Hospitality Portfolio I NTC Owner GP, LLC, a Delaware limited liability company (“Owner GP”), which in turn is the one percent (1%) general partner of each of ARC Hospitality Portfolio I NTC Owner, LP, a Delaware limited partnership (“LP Borrower”), ARC Hospitality Portfolio I DLGL Owner, LP, a Delaware limited partnership (“DLGL Borrower”), and ARC Hospitality Portfolio I SAGL Owner, LP, a Delaware limited partnership (“SAGL Borrower”; LLC Borrower, BHGL Borrower, PXGL Borrower, GBGL Borrower, NFGL Borrower, MBGL 1000 Borrower, MBGL 950 Borrower, LP Borrower, DLGL Borrower and SAGL Borrower are individually and collectively, as the context may require, referred to as the “Mortgage Borrowers”), (iii) the ninety-nine percent (99%) limited partner of LP Borrower, DLGL Borrower, and SAGL

Borrower, (iv) the sole member of ARC Hospitality Portfolio I TRS Holdco, LLC, a Delaware limited liability company (“TRS Holdco”), which in turn (a) is the sole member of ARC Hospitality Portfolio I TRS, LLC, a Delaware limited liability company (“Main TRS”), ARC Hospitality Portfolio I HIL TRS, LLC, a Delaware limited liability company (“HIL TRS”), ARC Hospitality Portfolio I MCK TRS, LLC, a Delaware limited liability company (“MCK TRS”), ARC Hospitality Portfolio I MISC TRS, LLC, a Delaware limited liability company (“MISC TRS”), and ARC Hospitality Portfolio I DEKS TRS, LLC, a Delaware limited liability company (“DEKS TRS”), which is the sole member of and ARC Hospitality Portfolio I KS TRS, LLC, a Kansas limited liability company (“KS TRS”), and (b) the sole member of ARC Hospitality Portfolio I NTC TRS GP, LLC, a Delaware limited liability company (“TRS GP”), which is the one percent (1%) general partner of each of ARC Hospitality Portfolio I NTC TRS, LP, a Delaware limited partnership (“Main LP TRS”), and ARC Hospitality Portfolio I NTC HIL, LP, a Delaware limited partnership (“HIL LP TRS”, and together with Main TRS, HIL TRS, MCK TRS, MISC TRS, Main LP TRS and DEKS TRS, the “TRS”);

WHEREAS, Mortgage Borrower own the fee or ground leasehold (as applicable) interests in the Properties (as herein defined);

WHEREAS, TRS has operating leases for all of the Properties granted by Mortgage Borrowers (the “Operating Leases”); and

WHEREAS, pursuant to the terms of that certain Amended & Restated Real Estate Sale Agreement, dated as of November 11, 2014 (the “ Sale Agreement”), by and among the parties listed on Schedule 1A attached thereto, as the sellers (the “Sellers”), and the parties listed on Schedule 1B attached thereto, as the purchasers, the Mortgage Borrower acquired the Properties and the Company is issuing the Interest (as herein defined) described herein to the Class A Member (on behalf of its wholly-owned subsidiaries, who were the sellers under the Sale Agreement) in partial consideration for such sale.

NOW, THEREFORE, in order to carry out the intentions expressed above and in consideration of the mutual agreements hereinafter contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Class B Member hereby agrees to admit the Class A Member and the Special Member as members of the Company upon the terms contained herein and each of the Class A Member, the Class B Member and the Special Member hereby agree to amend and restate the Existing LLC Agreement to read in its entirety as follows:

ARTICLE 1

DEFINITIONS

1.1           Definitions. As used in this Agreement, the following terms shall have the meanings set forth below, which meanings shall be applicable equally to the singular and plural of the terms defined:

“Accrual Period” means the period from and including a Scheduled Distribution Date to but excluding the next Scheduled Distribution Date, except that the first Accrual Period shall be the period from and including the Effective Date to but excluding the first Scheduled Distribution Date thereafter.

2

“Act” means the Delaware Limited Liability Company Act (6 Del. C. § 18-101 et seq.), as amended from time to time.

“Additional Class B Member Deposit” has the meaning set forth in Section 3.4(h).

“Additional Mezzanine Lender” means, with respect to any Additional Mezzanine Loan, the holder(s), from time to time, of such Additional Mezzanine Loan.

“Additional Mezzanine Loan” means any additional mezzanine loan incurred by a Subsidiary of the Company as an “Approved Mezzanine Loan” in accordance with the terms of the Mortgage Loan Agreement and the First Mezzanine Loan Agreement.

“Additional Mezzanine Loan Agreement” means, with respect to each Additional Mezzanine Loan, the mezzanine loan agreement evidencing such Additional Mezzanine Loan, as the same may be amended, supplemented or modified from time to time.

“Additional Mezzanine Loan Documents” means, with respect to each Additional Mezzanine Loan, the Additional Mezzanine Loan Agreement evidencing such Additional Mezzanine Loan, the notes, pledges, environmental indemnities, guarantees and all other agreements, instruments or documents relating to, evidencing or securing such Additional Mezzanine Loan, as any of the foregoing may be amended, supplemented or modified from time to time.

“Additional Mezzanine Loan Obligations” means the indebtedness evidenced, secured or otherwise governed by the Additional Mezzanine Loan Documents.

“Affiliate” means with respect to any Person (i) any other Person that directly or indirectly through one or more intermediaries Controls or is Controlled by or is under common Control with such Person and (ii) any other Person owning or controlling twenty-five percent (25%) or more of the outstanding voting securities of, or other ownership interests in, such Person; provided that, notwithstanding the foregoing, each of the following entities shall be deemed an Affiliate of each of the Class B Member and the Guarantors: AR Capital, LLC, American Realty Capital IX, LLC, American Realty Capital Hospitality Special Limited Partner, LLC, American Realty Capital Hospitality Advisors, LLC, American Realty Capital Hospitality Properties, LLC, Realty Capital Securities, LLC, ARC OP (as defined below), REIT (as defined below), Crestline Hotels & Resorts, LLC, and each of their respective Affiliates.

“Agreement” means this Amended and Restated Limited Liability Company Agreement of the Company, together with the Schedules attached hereto, as it may hereafter be amended, supplemented or otherwise modified from time to time.

“Allocated Amount” means, with respect to a Property, an amount equal to the portion of the total of the Class A Member’s Initial Capital Contributions allocated to such Property, as set forth on Schedule 1.1(a), which amount shall be increased from time to time in order to reflect any additional Capital Contributions made by the Class A Member with respect to such Property.

“Annual Budget” means the annual budget for the Company and its Subsidiaries (which shall include both an operating budget and a capital expenditure budget) and each of the Properties, on an aggregate and individual Property basis, which annual budget shall set forth, on

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a month-by-month basis, in reasonable detail, each line item of operating income, operating expenses and capital expenses for the applicable Budget Year.

“ARC OP” means American Realty Capital Hospitality Operating Partnership, L.P., a Delaware limited partnership.

“Assignee” means any Person to whom a limited liability company interest in the Company has been Transferred in a Transfer expressly permitted hereunder and who has not been admitted as a Substituted Member.

“Available Cash” means for any period, the excess, if any, of (A) the sum of (i) the amount of all cash receipts during such period of the Company and any Subsidiary thereof, without duplication (to the extent, in the case of amounts received by a Subsidiary, such cash is permitted by the Senior Loan Documents to be distributed by such Subsidiary to the Company after payment of all expenses of such Subsidiary incurred by such Subsidiary to the extent such expenses are not prohibited by this Agreement or the Senior Loan Documents (collectively the “Permitted Subsidiary Expenses”)) and (ii) any working capital of the Company existing at the start of such period less (B) the sum of (i) all cash amounts payable in such period on account of expenses incurred directly by the Company in accordance with and as permitted by this Agreement (but specifically excluding sums payable to the Class B Member or any Affiliate thereof (except for the Permitted Subsidiary Expenses) unless approved by the Class A Member or permitted hereunder), and (ii) reserves of amounts required for the working capital, capital expenditures and future needs of the Company and its Subsidiaries, including, without limitation, current and future property improvement plans and other franchisor requirements, as established by the Class B Member in its reasonable determination.

“Bad Boy Guaranty” means that certain Bad Boy Guaranty, dated as of the date hereof, made by the Guarantors in favor of the Class A Member.

“Bankruptcy” means, with respect to the affected party, (i) the entry of an order for relief under the Bankruptcy Code, (ii) the admission by such party in writing of its inability to pay its debts as they mature, (iii) the making by it of an assignment for the benefit of creditors, (iv) the filing by it of a petition in bankruptcy or a petition for relief under the Bankruptcy Code or any other applicable federal or state bankruptcy or insolvency statute or any similar law, (v) the application by such party for the appointment of a receiver for the assets of such party, (vi) the filing of an involuntary petition seeking liquidation, reorganization, arrangement or readjustment of its debts or any other similar relief under the Bankruptcy Code or any other federal or state insolvency law that is not discharged, stayed or dismissed within sixty (60) days or (vii) the imposition of a judicial or statutory lien on all or a substantial part of its assets that is not discharged, stayed or dismissed within sixty (60) days. With respect to a Member, the foregoing definition of “Bankruptcy” is intended to replace and shall supersede and replace the definition of “Bankruptcy” set forth in Sections 18-101(1) and 18-304 of the Act.

“Bankruptcy Code” means Title 11 of the United States Code, as amended.

“Barcelo Note” shall mean those certain Promissory Notes in the aggregate original principal amount of $63,074,056.52, dated March 21, 2014, from ARC OP to Barcelo Crestline Corporation.

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“Budget Year” means, with respect to the Fiscal Year 2015 or any Fiscal Year thereafter, the period beginning on January 1 and ending on December 31 of such year.

“Business Day” means any day other than a Saturday, a Sunday or a legal holiday on which national banks are not open for general business in the State of New York.

“Buy/Sell Response Notice” has the meaning set forth in Section 3.4.

“Capital Contribution” when used with respect to any Member means the aggregate amount of capital contributed (including any amounts deemed contributed) to the Company by such Member in accordance with Article 6.

“Capital Event” means:  (i) any sale, transfer or other disposition or liquidation of the Properties or any portion thereof, or any direct or indirect interest therein owned by the Company or any Subsidiary or any portion thereof (including, in each case, a foreclosure sale or deed-in-lieu thereof); (ii) any Casualty; (iii) any Condemnation; or (iv) any refinancing of all or any of the Properties or any direct or indirect interest therein owned by the Company or any Subsidiary or all of any of the Senior Loans.

“Capital Event Proceeds” means Net Sales Proceeds, Net Disposition Proceeds and Net Financing Proceeds, collectively.

“Cash Management Account” has the meaning set forth in Section 5.5.

“Cash Management Agreement” means that certain Deposit Account Control Agreement, dated as of the date hereof, among Wells Fargo Bank, National Association, the Company, the Class A Member and the Class B Member, as the same may be amended, supplemented or otherwise modified from time to time with the approval of the Class A Member.

“Cash Management Bank” has the meaning set forth in Section 5.5.

“Casualty” means, with respect to any Property, any fire, explosion, flood, collapse or other casualty affecting all or any portion of such Property.

“Certificate” means the Certificate of Formation of the Company filed with the Secretary of State of the State of Delaware on October 7, 2014, as the same may hereafter be amended and/or restated from time to time.

“Changeover Event” means the occurrence of any of the following events:

(1)         any failure (regardless of the availability of funds) of the Company to distribute on any Scheduled Distribution Date the full Class A Return for the Accrual Period ending on that Scheduled Distribution Date, it being understood that if such a failure occurs, the Class A Return Rate used to calculate any amounts then owing to the Class A Member or that become due to the Class A Member at any time following such failure will be the Increased Rate, with the Increased Return resulting from such failure accruing interest at the Increased Rate until paid and such additional interest being due on the next Scheduled Distribution Date; provided, however, that with respect to each of the first two times that the Company fails to pay the Class A Return in full on a Scheduled

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Distribution Date only, such failure to pay shall not constitute a Changeover Event hereunder if the Company pays such amount in full (together with interest thereon at the Increased Rate) to the Class A Member within five (5) Business Days following the Class A Member’s delivery of written notice to the Class B Member of such failure to pay;

(2)         any failure of the Class B Member to contribute any Protective Capital to the Company or to reimburse the Class A Member for contributions of Protective Capital made by the Class A Member, in either case within the time set forth in, and otherwise in accordance with Section 6.2 hereof; provided that such failure of the Class B Member to contribute Protective Capital pursuant to Section 6.2(a) hereof shall not constitute a Changeover Event unless either (A) such failure is not remedied by the Class B Member within sixty (60) days after the Class A Member’s written notice to the Class B Member of such failure or (B) if the Class A Member funds any Protective Capital pursuant to Section 6.2(a) hereof, then the Class B Member shall have a period of sixty (60) days following the funding of such Protective Capital to cure such default by reimbursing the full amount of such Protective Capital (together with a return thereon at the Increased Rate) to the Class A Member;

(3)         the failure (regardless of the availability of funds) of the Company or the Class B Member (a) to redeem or cause to be redeemed the Class A Member’s Interest in full, and to pay in full the Redemption Price, on or before the Mandatory Redemption Date or (b) to pay to the Class A Member in full the Release Payment for any Property upon the sale or other disposition of any Property (or any direct or indirect interest therein owned by any of the Company or its Subsidiaries) or (c) to pay to the Class A Member in full the QCR Redemption Amount in respect of any Qualified Capital Raise in accordance with the provisions hereof or (d) to pay to the Class A Member all of the Net Financing Proceeds from the incurrence of any Additional Mezzanine Loan by the Company or any of its Subsidiaries upon such incurrence or (e) to pay to the Class A Member all of the Capital Event Proceeds from any other Capital Event affecting any Property ((but, in the event such Capital Event only affects certain Properties (as opposed to all Properties), only in an amount up to the Release Payment for such Property)) upon the occurrence of such Capital Event;

(4)         the failure (regardless of the availability of funds) of the Company or the Class B Member to pay the Class A Member any amounts not described in clause (1), (2) or (3) above when due and payable hereunder unless such payment is made within ten (10) Business Days after notice from the Class A Member that such payment is delinquent, provided, however, that interest at the Increased Rate will accrue on any such amounts not paid when due, irrespective of the amount owed, from the day first due until paid in full;

(5)         if the Company or any Subsidiary takes any action that constitutes a breach of Section 3.1(b);

(6)         if the Company fails to comply with any of the covenants in any of Sections 5.5(a), 5.6, 5.10 (unless caused by the Senior Lender’s failure to pay taxes or insurance premiums despite there being sufficient amounts in the reserves held by the Senior Lender for such purposes), 5.15(a), 5.17 or Schedule 5.15(a) hereof, or fails to maintain the insurance required by Section 5.7; provided, however, that with respect to a

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violation or breach of any of the covenants set forth in Section 5.15(a) or Schedule 5.15(a), such violation or breach shall not constitute a Changeover Event in the event that (1) such violation or breach is not intentional, (2) such violation or breach is immaterial, (3) such violation or breach shall be remedied in a timely and expedient manner and in any event within not more than sixty (60) days, and (4) within fifteen (15) Business Days following the request of the Class A Member, but not prior to the date on which such violation or breach shall have been remedied in accordance with the immediately foregoing clause (3), the Company delivers to the Class A Member (I) a new non-consolidation opinion or (II) a modification of a non-consolidation opinion that was previously delivered to the Class A Member to the effect that such breach or violation shall not in any way impair, negate or adversely change the opinions rendered in such opinion, which opinion or opinion modification and any counsel delivering such opinion or opinion modification shall be acceptable to the Class A Member in its reasonable discretion;

(7)         any Prohibited Transfer occurs or if the Class B Member ceases to be Controlled, directly or indirectly, by ARC OP, or if ARC OP ceases to be Controlled, directly or indirectly by the REIT, or if the REIT ceases to be Controlled, directly or indirectly, by AR Capital, LLC;

(8)         if, as of the third (3rd) anniversary of the Effective Date, the Company has failed to make payments to the Class A Member in respect of its Unrecovered Capital in an amount equal to or greater than fifty percent (50%) of the Initial Capital Contributions made by the Class A Member;

(9)         if, as of the fourth (4th) anniversary of the Effective Date, the Company has failed to make payments to the Class A Member in respect of its Unrecovered Capital in an amount equal to or greater than one hundred percent (100%) of the Initial Capital Contributions made by the Class A Member;

(10)        any representation or warranty made by the Class B Member in Section 2.10 of this Agreement or any other representation made by the Class B Member or by any Guarantor in any other Transaction Document shall be untrue, incorrect or misleading in any material respect on or as of the date made; provided, however, that as to any such untrue, incorrect or misleading representation or warranty which (a) was unintentionally made to the Class A Member and (b) which can be made true and correct by action of the Class B Member, the Class B Member shall have a period of thirty (30) days following written notice thereof to the Class B Member to undertake and complete all action necessary to make such representation or warranty, true and correct in all material respects; provided, further, that if the same cannot be cured within such thirty (30) day period, if the Class B Member commences to take action to cure such breach within such thirty (30) day period and thereafter diligently and expeditiously proceeds to cure the same, the Class B Member shall have such additional time as is reasonably necessary to effect such cure, but in no event in excess of an additional ninety (90) days;

(11)        the occurrence of any default in any material respect or of any material nature by the Class B Member, any Guarantor or any Affiliate of any of them in the performance of any obligation under any of the Transaction Documents (other than any default described elsewhere in this definition of “Changeover Event”), if such default

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shall continue for thirty (30) days after notice of such default; provided, however, that if such default is a default which cannot be cured by the payment of a sum of money and is otherwise susceptible of cure but cannot reasonably be cured within such 30-day period, and provided further that the Class B Member shall have commenced to cure such default within such 30-day period and shall thereafter diligently and expeditiously proceed to cure the same, such 30-day period shall be extended for such time as is reasonably necessary for the Class B Member in the exercise of due diligence to cure such default, such additional period not to exceed ninety (90) days;

(12)        the occurrence of any “event of default” (i.e., after applicable grace and cure periods, if any) arising pursuant to any of the Senior Loan Documents or pursuant to any loan document evidencing or relating to any subsequent financing entered into by the Company or any of its Subsidiaries, or the failure to pay the Senior Loans or any such subsequent financing at the stated or accelerated maturity of the Senior Loans or such subsequent financing (whether such accelerated maturity occurs by declaration of the lender or otherwise);

(13)        if (a) the Company, the Class B Member, any Guarantor or any Subsidiary commences any action or proceeding for the purpose of asserting or alleging that any provision of this Agreement or any other Transaction Document is not enforceable by the Class A Member in accordance with its terms, or (b) it is determined by any court or other tribunal or governmental authority that any provision of this Agreement or any Transaction Document is not in full force and effect or valid or enforceable by the Class A Member in accordance with its terms to the extent that such provision relates to the Class A Member’s right to receive amounts otherwise payable or due hereunder (other than to the extent such determination is that such amounts are usurious under applicable law), the priority of any such amounts and/or the right of the Class A Member to exercise any of its rights or remedies hereunder; provided, however, that this clause (b) shall not be applicable to the extent that such determination is made solely due to the Class A Member’s failure, as of the Effective Date, to obtain any governmental order, consent, approval or authorization (or failure, as of the Effective Date, to make any registration or other filing with any governmental authority) in connection with its receipt of its Interest on the date hereof;

(14)        if the Class B Member or any Guarantor shall, or shall cause or permit the Company or any of its Subsidiaries to, make an assignment for the benefit of creditors or admit, in any legal proceeding, its inability to pay its debts as they become due or generally not be paying its debts as they become due;

(15)        if any receiver, liquidator or trustee shall be appointed for the Class B Member, any Guarantor, the Company or any Subsidiary, or if a Bankruptcy occurs with respect to any such Person, or if any proceeding shall be instituted for the dissolution or liquidation of any such Person or its assets;

(16)        intentionally omitted;

(17)        a final, non-appealable, uninsured judgment for the payment of money in excess of $5,000,000 shall be rendered against the Company by a court of competent jurisdiction and is not satisfied in full within ten (10) days;

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(18)        the occurrence of a Liability Indemnification Event under a Guaranty that remains unpaid for ten (10) Business Days after written notice thereof, provided that interest at the Increased Rate will accrue on any such amounts not paid when due, irrespective of the amount owed, from the day first due until paid in full;

(19)        the occurrence of any “event of default” (i.e., after applicable grace and cure periods, if any) arising pursuant to any ground lease to which the Company or any Subsidiary is a party to the extent such event of default could reasonably be expected to have a Material Adverse Effect;

(20)        the occurrence of any “event of default” (i.e., after applicable grace and cure periods, if any) arising pursuant to any franchise agreement to which the Company or any Subsidiary is a party to the extent such event of default could reasonably be expected to have a Material Adverse Effect, if such default shall continue for sixty (60) days after notice of such default or, if (x) such default is not reasonably susceptible of being cured within such 60-day period, (y) the Company is diligently and continuously attempting to cure such breach and (z) such breach does not cause any imminent danger to one or more of the Properties or of termination of such franchise agreement by the franchisor as a result of the continuation of such default without cure thereof, such longer period as is reasonably necessary to cure such default using diligent efforts, provided that such cure period in the aggregate shall not exceed one hundred eighty (180) days;

(21)        if the Class B Member, any Guarantor or any of their respective Affiliates misappropriates the funds of the Company or any Subsidiary or the funds of any Affiliate of the Company or otherwise commits a fraudulent act in connection with the business of the Company or any Subsidiary or the business of any Affiliate of the Company, or if the Class B Member, any Guarantor or any of their respective Affiliates is convicted of a felony (whether or not such felony is related to the Company or any Subsidiary) or commits an act of dishonesty, willful misconduct or gross negligence, or breaches a fiduciary duty, in connection with the Company or any Subsidiary or in connection with its activities as a Member (if applicable) or the performance of its duties hereunder or under any Transaction Documents; and/or

(22)        if any of the assumptions contained in any non-consolidation opinion delivered to the Class A Member in connection with its investment in the Company, or in any other non-consolidation opinion delivered subsequently to the Class A Member’s investment in the Company, is or becomes untrue in any material respect.

“Class A Interest Sale Price” has the meaning set forth in Section 3.4.

“Class A Member” has the meaning set forth in the Preamble.

“Class A Member Deposit” has the meaning set forth in Section 3.4(d).

“Class A Member Protective Advance” has the meaning set forth in Section 6.2.

“Class A Return” means, with respect to any Accrual Period, an amount equal to the product of (i) the weighted average outstanding Unrecovered Capital of the Class A Member during such period multiplied by (ii) the Class A Return Rate for such Accrual Period, multiplied

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by (iii) a fraction the numerator of which is the number of days in such Accrual Period and the denominator of which is 365.

“Class A Return Rate” means, (i) with respect the first eighteen (18) months following the Effective Date, a rate equal to 7.50% per annum, and (ii) thereafter, a rate equal to 8.00% per annum; provided, however, that (i) if any Changeover Event has occurred, the Class A Return Rate applicable in calculating any Class A Return shall automatically (without any action required by the Class A Member) increase to the Increased Rate and (ii) the rate that will accrue on any Protective Capital funded by the Class A Member shall be the Increased Rate.

“Class B Interest Sale Price” has the meaning set forth in Section 3.4.

“Class B Member” has the meaning set forth in the Preamble.

“Class B Member Affiliate Contract” means any contract or other agreement between or among the Company and/or any Subsidiary, on the one hand, and the Class B Member, any Guarantor or any of their respective Affiliates, on the other hand, regardless of whether there are other Persons party to such contract or other agreement.

“Class B Member Deposit” has the meaning set forth in Section 3.4(h).

“Code” means the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder, or any corresponding provision(s) of succeeding law and/or regulation.

“Collateral” means all tangible and intangible property in respect of which a security interest or pledge is granted under the Senior Loan Documents.

“Company” means ARC Hospitality Portfolio I Holdco, LLC, a Delaware limited liability company, as said company from time to time hereafter may be constituted; unless the context clearly requires otherwise, all references herein to the “Company” include the Company and each Subsidiary.

“Company Assets” means all right, title and interest of the Company in and to all or any portion of the assets of the Company and any property (real, personal, tangible or intangible) or estate acquired in exchange therefor or in connection therewith.

“Condemnation” means any taking or voluntary conveyance during the term hereof of all or any part of any Property or any interest therein or right accruing thereto or use thereof, as the result of, or in settlement of, any condemnation or other eminent domain proceeding by any Governmental Authority, whether or not the same shall actually have been commenced.

“Contingent Obligation” means any obligation of any Subsidiary or the Company directly or indirectly guaranteeing any indebtedness or other obligation of any other Person in any manner.

“Control”, when used with respect to any Person, means the power to direct the management and policies of such Person, directly or through one or more intermediaries, whether through the ownership of voting securities, by contract or otherwise, and the terms “Controlling” and “Controlled” have meanings correlative to the foregoing.

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“Delaware Court” has the meaning set forth in Section 12.9.

“Deposit” has the meaning set forth in Section 3.4(d).

“Effective Date” means the date of this Agreement set forth in the introductory paragraph hereto.

“Election Notice” has the meaning set forth in Section 3.4(a).

“Environmental Claim” means any written notice, claim, proceeding, investigation, demand or other communication by any Person or Governmental Authority alleging or asserting liability with respect to any Subsidiary or any Property arising out of, based on or resulting from (i) the presence, use or release of any Hazardous Substance, (ii) any fact, circumstance, condition or occurrence forming the basis of any violation, or alleged violation, of any Environmental Law, or (iii) any alleged injury or threat of injury to property, health or safety or to the environment caused by Hazardous Substances.

“Environmental Indemnity Agreement” means that certain Environmental Indemnity Agreement, dated as of the date hereof, by the Guarantors for the benefit of the Class A Member.

“Environmental Laws” has the meaning assigned to such term in the Environmental Indemnity Agreement.

“Equity Members” means the Class B Member and the Class A Member.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated thereunder.

“ERISA Affiliate,” at any time, means each trade or business (whether or not incorporated) that would, at the time, be treated together with the Company or any of its Subsidiaries as a single employer under Title IV or Section 302 of ERISA or Section 412 of the Code.

“Executive Order” has the meaning set forth in Schedule 5.15(b).

“Existing LLC Agreement” has the meaning set forth in the Recitals.

“First Mezzanine Borrower” has the meaning set forth in the Recitals.

“First Mezzanine Lender” means the holder(s), from time to time, of the First Mezzanine Loan.

“First Mezzanine Loan” means that certain loan in the original principal amount of $111,000,000 made by German American Capital Corporation, as the original First Mezzanine Lender, to WNT Mezz I, LLC, a Delaware limited liability company, which is the predecessor-in-interest to the First Mezzanine Borrower.

“First Mezzanine Loan Agreement” means that certain Mezzanine Loan Agreement, dated as April 11, 2014, between WNT Mezz I, LLC, a Delaware limited liability company, as the original borrower, and German American Capital Corporation, as the original Mezzanine

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Lender, as amended by that certain First Amendment to Mezzanine Loan Agreement, dated as of June 18, 2014, as amended by that certain Assumption and Release Agreement (Mezzanine), dated as of the date hereof, by and among First Mezzanine Borrower, First Mezzanine Lender and other parties, as the same may be amended, supplemented or modified from time to time.

“First Mezzanine Loan Documents” means the First Mezzanine Loan Agreement, the notes, pledges, environmental indemnities, guarantees and all other agreements, instruments or documents relating to, evidencing or securing the First Mezzanine Loan including those documents listed on Schedule 1.1(c), as any of the foregoing may be amended, supplemented or modified from time to time.

“First Mezzanine Loan Obligations” means the indebtedness evidenced, secured or otherwise governed by the First Mezzanine Loan Documents.

“Fiscal Year” means the fiscal year of the Company, which shall be the calendar year; but upon termination of the Company, “Fiscal Year” shall mean the period from the end of the last preceding Fiscal Year to the date of such termination.

“Fundamental Decision” has the meaning set forth in Section 3.3(g).

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

“GS Group” means The Goldman Sachs Group, Inc., a Delaware corporation, together with its successors and assigns by merger, consolidation and/or sale of all or substantially all of its assets.

“Guarantees” means, collectively, the Mandatory Redemption Guaranty and the Bad Boy Guaranty and “Guaranty” shall mean either of them.

“Guarantors” means each of Nicholas S. Schorsch, an individual, William M. Kahane, an individual, Edward M. Weil, Jr., an individual, Peter M. Budko, an individual, ARC OP and REIT.

“Hazardous Substances” has the meaning assigned to such term in the Environmental Indemnity Agreement.

“Increased Rate” means a rate per annum calculated on a cumulative basis and compounded monthly if not paid currently, equal to the sum of (i) the then-applicable Class A Return Rate plus (ii) five percent (5%).

“Increased Return” means any amount paid or due and payable to the Class A Member as a result of an increase in the Class A Return Rate to the Increased Rate.

“Indebtedness” of a Person, at a particular date, means the sum (without duplication) at such date of (a) indebtedness or liability for borrowed money; (b) obligations evidenced by bonds, debentures, notes, or other similar instruments; (c) obligations for the deferred purchase price of property or services (including trade obligations); (d) obligations under letters of credit;

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(e) obligations under acceptance facilities; (f) all guaranties, endorsements (other than for collection or deposit in the ordinary course of business), and other contingent obligations to purchase, to provide funds for payment, to supply funds to invest in any Person or otherwise to assure a creditor against loss; and (g) obligations secured by any Liens voluntarily granted on such Person’s property, whether or not the obligation have been assumed by such Person.

“Initial Class B Member Deposit” has the meaning set forth in Section 3.4(c).

“Insurance Requirements” means, collectively, (i) all material terms of any insurance policy required pursuant to this Agreement and (ii) all material regulations and then-current standards applicable to or affecting any Property or any part thereof or any use or condition thereof, which may, at any time, be recommended by the Board of Fire Underwriters, if any, having jurisdiction over any Property, or such other body exercising similar functions.

“Interest” means, with respect to any Member, the entire limited liability company interest of that Member in the Company, including the right of such Member to any and all benefits to which a Member may be entitled as provided in this Agreement, together with the obligations of such Member to comply with all the terms and provisions of this Agreement.

“Investment Company Act” has the meaning set forth in Section 2.11(c).

“IRS” means the Internal Revenue Service and any successor agency or entity thereto.

“Legal Requirements” means:

(i)          all governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions of Governmental Authorities affecting the Company, any Guarantor, any Subsidiary, the Class B Member or any Property or any part thereof or the construction, ownership, use, alteration or operation thereof or any part thereof (whether now or hereafter enacted and in force),

(ii)         all permits, licenses and authorizations and regulations relating thereto, and

(iii)        all covenants, conditions and restrictions contained in any instruments at any time in force (whether or not involving Governmental Authorities) affecting any Property or any part thereof which, in the case of this clause (iii), require repairs, modifications or alterations in or to any Property or any part thereof, or in any material way limit or restrict the existing use and enjoyment thereof.

“Liability Indemnification Event” means any event or occurrence that entitles the Class A Member to a payment under a Guaranty.

“Lien” means any mortgage, deed of trust, lien (statutory or other), pledge, hypothecation, assignment, preference, priority, security interest, or any other encumbrance or charge on or affecting any Collateral or any portion thereof, or any interest therein (including, without limitation, any conditional sale or other title retention agreement, any sale-leaseback, any financing lease having substantially the same economic effect as any of the foregoing, the filing of any financing statement or similar instrument under the Uniform Commercial Code or

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comparable law of any other jurisdiction, domestic or foreign, and mechanics’, materialmen’s and other similar liens and encumbrances).

“Lockout Expiration Date” has the meaning set forth in Section 9.2.

“Managing Member” means, initially, the Class B Member, provided, that if for any reason the Class B Member ceases to be the Managing Member pursuant to the terms hereof, the term “Managing Member” shall thereafter mean the Class A Member or such other Person as may be so designated by the Class A Member in its sole discretion. The Managing Member is hereby designated as a “manager” of the Company within the meaning of Section 18-101(10) of the Act.

“Mandatory Redemption Date” means the earlier of (i) the date on which a Changeover Event first occurs, and (ii) the ninetieth (90th) day following the stated maturity date of the Senior Loans (as the same may be extended in accordance with the terms of the Senior Loan Documents pursuant to the extension options set forth therein as of the date hereof).

“Mandatory Redemption Guaranty” means that certain Mandatory Redemption Guaranty, dated as of the date hereof, made by the Guarantors in favor of the Class A Member.

“Material Adverse Effect” means a material adverse effect on (i) the use, operation, financial performance or prospects or value of the Company and its Subsidiaries taken as a whole or of the Properties taken as a whole, (ii) the current or future financial position or results of operations or business of the Company and its Subsidiaries taken as a whole, (iii) the ability of the Class A Member to enforce any Transaction Document or (iv) the ability of the Company, any Guarantor or the Class B Member to perform its obligations under any Transaction Document.

“Member” means each of the Class B Member, the Class A Member and the Company’s Special Member and any additional Persons hereafter admitted as a member of the Company in accordance with the provisions of this Agreement, for so long as such Person shall be a member of the Company and any transferee of such Person permitted hereunder and admitted as a member of the Company in accordance with Section 9.5, and “Members” shall mean such Persons, collectively.

“Mortgage Borrower” has the meaning set forth in the Recitals.

“Mortgage Lender” means the holder(s), from time to time, of the Mortgage Loan.

“Mortgage Loan” means that certain loan in the original principal amount of $865,000,000 made by German American Capital Corporation, as the original Mortgage Lender, to W2007 Equity Inns Realty, LLC, a Delaware limited liability company, and W2007 Equity Inns Realty, L.P., a Delaware limited partnership, as the original mortgage borrowers, which are the predecessors-in-interest to the Mortgage Borrower.

“Mortgage Loan Agreement” means that certain Loan Agreement, dated as of April 11, 2014, among the original W2007 Equity Inns Realty, LLC, a Delaware limited liability company, and W2007 Equity Inns Realty, L.P., a Delaware limited partnership, as the original mortgage borrowers, and German American Capital Corporation, as the original Mortgage Lender, as

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amended by that certain First Amendment to Loan Agreement, dated as of June 18, 2014, as amended by that certain Assumption and Release Agreement, dated as of the date hereof, by and among Mortgage Borrower, Mortgage Lender and other parties, as the same may be subsequently amended, supplemented or modified from time to time.

“Mortgage Loan Documents” means the Mortgage Loan Agreement, the notes, mortgages, deeds of trust, assignments of leases, pledges, environmental indemnities, guarantees and all other agreements, instruments or documents relating to, evidencing or securing the Mortgage Loan including those documents listed on Schedule 1.1(b), as any of the foregoing may be amended, supplemented or modified from time to time.

“Mortgage Loan Obligations” means the indebtedness evidenced, secured or otherwise governed by the Mortgage Loan Documents.

“Net Disposition Proceeds” means Casualty or Condemnation proceeds not applied to restoring, repairing, replacing or rebuilding one or more Properties or retained by the Senior Lender under the Senior Loan Documents.

“Net Financing Proceeds” has the meaning set forth in Section 8.2(b).

“Net Sale Proceeds” has the meaning set forth in Section 8.2(a).

“New York Court” has the meaning set forth in Section 12.9.

“Offer Price” has the meaning set forth in Section 3.4.

“Organizational Document” means with respect to any Person (i) in the case of a corporation, such Person’s certificate of incorporation and by-laws, and any shareholder agreement, voting trust or similar arrangement applicable to any of such Person’s authorized shares of capital stock or the holders thereof, (ii) in the case of a limited partnership, such Person’s certificate of limited partnership, limited partnership agreement and any voting trusts or similar arrangements applicable to its partners or any of its partnership interests, (iii) in the case of a limited liability company, such Person’s certificate of formation or certificate of organization, limited liability company agreement and any other document affecting the rights or duties of managers or holders of limited liability company interests or (iv) in the case of any other legal entity, such Person’s organizational documents and all other documents establishing or affecting the duties or rights of holders of equity interests in such Person.

“Percentage Interest” means, with respect to any Member, initially, the percentage following such Member’s name on Schedule 6.1.

“Permitted Transfer” has the meaning assigned to it in Section 9.1(a).

“Person” means any individual, partnership, corporation, limited liability company, trust or other legal entity.

“Plan” means an employee benefit plan (i) which is maintained for employees of Company or its Subsidiaries or any ERISA Affiliate and which is subject to Title IV of ERISA or

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(ii) with respect to which Company or its Subsidiaries or any ERISA Affiliate could be subjected to any liability under Title IV of ERISA (including Section 4069 of ERISA).

“Plan Assets” means assets of any Plan, including any employee benefit plan subject to Part 4, Subtitle A, Title I of ERISA.

“Prohibited Person” has the meaning set forth in Schedule 5.15(b).

“Prohibited Transfer” means (i) any violation of Section 5.17 hereof, and (ii) any Transfer of the Class B Member’s Interest or any direct or indirect equity interest in the Class B Member in violation of the terms hereof.

“Properties” means the land and improvements at the locations set forth on Schedule A hereto and “Property” means the land and improvements at each such location, along with all personal property relating thereto and owned or controlled by the Mortgage Borrower or TRS (including, without limitation, the operating leases held by TRS).

“Property Management Agreements” means, collectively, each agreement to manage one or more of the Properties between the Company or a Subsidiary and a Property Manager; provided that each such agreement (together with any modification thereto) must be approved by the Class A Member (which approval shall not be unreasonably withheld, delayed or conditioned) unless (i) such agreement has been approved by the Senior Lender pursuant to the terms of the Senior Loan Documents or otherwise conforms with the terms of the Senior Loan Documents and (ii) if such agreement constitutes a Class B Member Affiliate Contract, if and to the extent such agreement is terminable by the Class A Member following the declaration of a Changeover Event without payment of any termination or similar fee (which termination right may be documented in a separate subordination, non-disclosure and attornment agreement with the Class A Member); provided, further, that if the Senior Lender receives a subordination or other agreement from the manager and/or any sub-manager, then such manager and/or sub-manager shall have entered into an agreement for the benefit of the Class A Member in substantially the same form and substance as the subordination or other agreement provided to the Senior Lender.

“Property Manager” means each manager of a Property appointed by the Company or a Subsidiary provided that each such manager must be approved by the Class A Member (which approval shall not be unreasonably withheld, delayed or conditioned) unless such appointment (i) has been approved by the Senior Lender pursuant to the terms of the Senior Loan Documents or otherwise complies with the terms of the Senior Loan Documents and (ii) the agreement with such manager complies with the terms set forth in the definition of “Property Management Agreements” above.

“Protective Capital” has the meaning set forth in Section 6.2.

“Qualified Capital Raise” means the issuance of interests in the REIT or any subsidiary of the REIT (excluding any such issuance completed on or prior to the Effective Date and in respect of amounts due under the Sale Agreement as of the Effective Date).

“QCR Redemption Amount” means, with respect to each Qualified Capital Raise, twenty-seven and nineteen hundreths percent (27.19%) of the gross amount of proceeds received by the issuer from such Qualified Capital Raise after the earlier to occur of (a) the date of the

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repayment in full of the Barcelo Note, and (b) the date the gross amount of proceeds received by the issuer with respect to Qualified Capital Raises exceeds $100,000,000; provided, however, that in no event shall the aggregate QCR Redemption Amounts payable to the Class A Member exceed $271,880,000 during any twelve-month period.

“Recognition Agreements” means, collectively, (i) that certain Recognition Agreement, dated as of February 27, 2015, by and among Mortgage Lender and the Class A Member, (ii) that certain Mezzanine Recognition Agreement, dated as of February 27, 2015, by and among First Mezzanine Lender and the Class A Member, and (iii) any recognition agreement hereafter entered into by the Class A Member with respect to any Additional Mezzanine Loan.

“Redemption Price” means, as of any date, an amount equal to the sum of (i) the Unrecovered Capital as of such date plus (ii) the accrued and unpaid Class A Return as of such date plus (iii) any other amounts then due or payable to the Class A Member hereunder or under the other Transaction Documents.

“Redemption Right” has the meaning set forth in Section 8.3.

“REIT” means American Realty Capital Hospitality Trust, Inc., Maryland corporation.

“Related Person” means with respect to any Person (i) an Affiliate of such Person, (ii) any officer, director, employee, agent, representative, shareholder, partner, member, manager, beneficial owner, servant, contractor or subcontractor of such Person or any Affiliate of such Person and (iii) any Person who controls any of the foregoing.

“Release Payment” means, with respect to the sale or other disposition of any Property, or any direct or indirect interest owned therein by the Company or any Subsidiary, (i) 110% of the aggregate Allocated Amount for such Property less (ii) the amount of any distributions in respect of the Unrecovered Capital of the Class A Member that were previously made to the Class A Member with Net Sale Proceeds, Net Disposition Proceeds and/or Net Financing Proceeds from such Property.

“Sale Agreement” has the meaning set forth in the Recitals.

“Scheduled Distribution Date” means in any calendar month the first (1st) day of such month or, if such day is not a Business Day, the immediately succeeding Business Day; provided, however, that in the event the payment date under the Senior Loan Documents should be hereafter modified, the Scheduled Distribution Date shall also be modified so that the Scheduled Distribution Date hereunder is also the payment date under the Senior Loan Documents.

“Scheduled Redemption Notice” has the meaning set forth in Section 5.5.

“Securities Act” has the meaning set forth in Section 2.11(c).

“Sellers” has the meaning set forth in the Recitals.

“Senior Lender” means, individually or collectively as the context may require, Mortgage Lender, First Mezzanine Lender and each Additional Mezzanine Lender.

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“Senior Loans” means, individually or collectively as the context may require, the Mortgage Loan, the First Mezzanine Loan and each Additional Mezzanine Loan.

“Senior Loan Documents” means, individually or collectively as the context may require, the Mortgage Loan Documents, the First Mezzanine Loan Documents and the Additional Mezzanine Loan Documents.

“Senior Obligations” means, individually or collectively as the context may require, the Mortgage Loan Obligations, the First Mezzanine Loan Obligations and the Additional Mezzanine Loan Obligations.¹

“Significant Decision” has the meaning set forth in Section 3.6.

“Special Form” has the meaning set forth in Section 5.7(a).

“Special Member” means (i) with respect to the Company, the individual appointed and admitted as a Special Member in accordance with Section 2.7, who initially is William G. Popeo, (ii) with respect to the general partner of the Class B Member, the individual appointed and admitted as a special member of the general partner of the Class B Member in accordance with the terms hereof, and (iii) with respect to each Subsidiary, the individuals appointed and admitted as independent managers or independent directors of such Subsidiary in accordance with the terms hereof. The Special Member of the Company shall only have those rights and duties expressly set forth in this Agreement.

“Subsidiary” means First Mezzanine Borrower, Mortgage Borrowers, Owner GP, TRS Holdco, TRS GP, TRS, ARC Hospitality Portfolio I KS TRS, LLC, a Kansas limited liability company, ARC Hospitality Portfolio I Concessions, LLC, a Delaware limited liability company (“TX Concessions”), ARC Hospitality Portfolio I TX Management, LLC, a Delaware limited liability company (“TX Management”), ARC Hospitality Portfolio I TX Holdings, LLC, a Delaware limited liability company (“TX Holdings”), ARC Hospitality Portfolio I TX Beverage Company, LLC, a Delaware limited liability company (“TX Beverage”), and any other entity in which the Company holds any ownership interest, whether directly or through one or more other Persons.

“Substituted Member” means any Person admitted to the Company as a Member pursuant to the provisions of Section 9.5.

“Transaction Documents” means collectively, this Agreement, the Environmental Indemnity Agreement, the Guarantees, the Cash Management Agreement, the Recognition Agreements, the certificate of formation and limited liability company agreement of each Subsidiary and each other instrument, agreement or certificate delivered by the Class B Member, any Guarantor or any Affiliate of any of them concurrently herewith or hereafter to or for the benefit of the Class A Member or any of its Affiliates in connection with this Agreement.

¹ Note to draft: If financing for the Second Pool Assets is not obtained at closing, then the definition of Senior Obligations in the Second Pool Purchaser Holdco Operating Agreement will be revised to mean “the indebtedness evidenced, secured or otherwise governed by the Senior Loan Documents.”

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“Transfer” means, with respect to the Interest of any Member or the interests of the Company in any Subsidiary, any of the Properties or any other asset, any transfer, sale, pledge, hypothecation, encumbrance, assignment or other disposition, directly or indirectly (including of any interest in a Member or through any one or more intermediaries), of all or any portion of such asset or other asset or any right to receive proceeds therefrom (whether voluntarily, involuntarily, by operation of law or otherwise).

“Treasury Regulations” means the regulations promulgated under the Code, as such regulations are in effect on the date hereof.

“TRS” has the meaning set forth in the Recitals.

“Unrecovered Capital” means, as of any date, with respect to the Class A Member an amount (but not less than zero) equal to the excess of (a) the aggregate amount of the Class A Member’s Capital Contributions theretofore made pursuant to Article 6 over (b) the sum of the aggregate amount theretofore distributed to the Class A Member as a return of capital pursuant to Article 8. Amounts distributed or paid to the Class A Member as a Class A Return, an Increased Return or indemnification for Damages will not be considered a “return of capital”. As of the date hereof, the Class A Member’s Unrecovered Capital is equal to the amount set forth in Schedule 6.1 opposite its name.

“Whitehall Parallel” means Whitehall Parallel Global Real Estate Limited Partnership 2007, a Delaware limited partnership, together with its successors and assigns by merger, consolidation and/or sale of all or substantially all of its assets.

“Whitehall Street” means Whitehall Street Global Real Estate Limited Partnership 2007, a Delaware limited partnership, together with its successors and assigns by merger, consolidation and/or sale of all or substantially all of its assets.

“Whitehall Guarantees” means, collectively, the guarantees and indemnities provided by Whitehall Street and/or Whitehall Parallel in connection with the Senior Loans.

1.2         Terms Generally. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

(a)          the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision;

(b)          the words “including” and “include” and other words of similar import shall be deemed to be followed by the phrase “without limitation”; and

(c)          references herein to a “Schedule” are to one of the Schedules attached to this Agreement and references to an Article or a Section are to one of the Articles or Sections of this Agreement. Each Schedule attached hereto and referred to herein is hereby incorporated herein by reference.

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ARTICLE 2

THE COMPANY AND ITS BUSINESS

2.1           Members; Continuation of the Company. Each of the Class A Member and the Special Member are hereby admitted to the Company as members. As a result of such admission, the members of the Company shall be the Class B Member, the Class A Member and the Company’s Special Member. Each of the Members hereby agrees to continue the Company in accordance with the terms hereof and pursuant to the Act.

2.2           Company Name. The business of the Company shall be conducted under the name of “ ARC Hospitality Portfolio I Holdco, LLC” in the State of Delaware and under such name or such assumed names as the Managing Member deems necessary or appropriate to comply with the requirements of any other jurisdiction in which the Company may be required to qualify.

2.3           Term. The term of the Company commenced with the filing of the Certificate with the Secretary of State of the State of Delaware on October 7, 2014 and shall continue in full force and effect perpetually unless the Company is dissolved as hereinafter provided.

2.4           Filing of Amendments to the Certificate. Each of the Members hereby agrees to execute and file any required amendments to the Certificate and to do or cause to be done all other acts requisite for the continuation of the Company as a limited liability company pursuant to the laws of the State of Delaware or any other applicable law.

2.5           Purpose. The Company is formed solely for the purpose of owning, operating managing, selling, financing and otherwise dealing with the Properties through the Subsidiaries. The Company may engage in any and all activities necessary or incidental to the foregoing. Notwithstanding anything contained herein to the contrary, the Company may not engage in any business, and may not have any purpose, unrelated to the Properties and may not acquire or own any real property or other assets other than those related to the ownership of the Properties through the Subsidiaries and the proceeds thereof (e.g., cash distributions received from the Subsidiaries).

2.6           Principal Office; Registered Agent. The principal office of the Company will be 106 York Road, Jenkintown, Pennsylvania 19046. The Company may change its place of business to such location or locations in the United States as may at any time or from time to time be designated by the Managing Member and approved by the Class A Member. The mailing address of the Company will be 106 York Road, Jenkintown, Pennsylvania 19046, or such other address as may be selected from time to time by the Managing Member. The Company shall maintain a registered office at c/o Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808. The name and address of the Company’s registered agent is Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808.

2.7           Classes of Members.

(a)           The Company shall have three classes of Members: a Class A Member and a Class B Member (collectively defined herein as “Equity Members”) and a special non-economic Member, who shall be a Special Member. For so long as any of the Senior Loans remains

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outstanding and the Class A Member has not been fully redeemed, the Company at all times shall have at least one Special Member who shall be a natural person appointed by the Class A Member and who Class A Member may confirm shall not have been at the time of appointment as Special Member, shall not thereafter become and shall not have been at any time during the five years preceding appointment (i) a member, manager or director (other than an “independent director” or “special member”) of, or an officer or employee of, the Company, any Member or any of their respective members, managers, investors or Affiliates, (ii) a customer of, supplier or service provider (including a provider of professional services) to, the Company, any Member, or any of their respective members, managers, investors or Affiliates such that such individual’s annual revenues derived from the Company, any Member, and their respective members, managers, investors or Affiliates exceeded 5% of such individual’s annual revenues for any of the preceding three years, (iii) a Person Controlling or under common Control with any of the Persons described in the foregoing clauses (i) or (ii), or (iv) a member of the immediate family of any such member, manager, director, officer, employee, supplier or customer or a member of the immediate family of any other member or manager described in the foregoing clauses (i) or (ii). Upon the occurrence of any event that causes the Special Member to cease to be a member of the Company, a new Special Member shall be appointed forthwith by the Class A Member, and no decision stated in this Agreement as requiring the consent of the Special Member shall be taken in the interim period until a new Special Member is appointed. No resignation or removal of a Special Member, and no appointment of a successor Special Member, shall be effective until such successor shall have accepted his or her appointment as a Special Member by a written instrument in which he or she agrees to be bound by all of the terms and conditions of this Agreement applicable to the Special Member. All right, power and authority of the Special Member shall be limited to the extent necessary to exercise those rights and perform those duties specifically set forth in this Agreement as being the responsibility of the Special Member. No Special Member shall at any time serve as trustee in bankruptcy for any Affiliate of the Company.

(b)          The Equity Members will be the only Members of the Company that have any interest in the profits, losses or capital of the Company. Except for the rights specifically granted to the Special Member in this Agreement, the Equity Members will be the only members of the Company with any voting or management rights.

(c)          The Special Member agrees to remain independent from the Equity Members and perform its obligations under this Agreement, agrees to be a Member of the Company for the limited purposes provided herein and to perform its obligations as the Special Member hereunder, and the Company and the Equity Members agree that the Special Member will be a Member of the Company only for such limited purposes. The Company, the Equity Members and the Special Member agree that the Special Member: (a) in accordance with Section 18-301 of the Act: (i) will not make, and will not be obligated to make, a contribution to the Company, and (ii) will not own, and will not be obligated to acquire, an Interest in the Company and (b) will have no management, approval, voting, consent or veto rights in the Company, other than to the extent that its affirmative vote, approval or consent is required for the Company or the Equity Members to perform certain acts or take certain actions as expressly provided in this Agreement. The Special Member may not bind the Company.

(d)          The limited liability company interests issued to the Equity Members pursuant to this Agreement have been duly authorized and are validly issued limited liability company interests in the Company.

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2.8           Names and Addresses of the Members.

The names and addresses for notices of the Equity Members are as follows:

Class A Member:

c/o Goldman Sachs Realty Management, L.P.
6011 Connection Drive
Irving, TX 75039
Attn: Greg Fay
Facsimile No.: (972) 368-3699
Telephone No.: (972) 368-2743

with copies to:

Whitehall Street Global Real Estate Limited Partnership 2007
c/o Goldman, Sachs & Co.
200 West Street
New York, NY 10282
Attn: Chief Financial Officer
Facsimile No.: (212) 357-5505
Telephone No.: (212) 902-5520

and to:

Sullivan & Cromwell LLP
125 Broad Street
New York, NY 10004
Attn: Anthony J. Colletta, Esq.
Facsimile No.: (212) 291-9029
Telephone No.: (212) 558-4608

Class B Member:

c/o American Realty Capital

405 Park Avenue

New York, New York 10022

Attn: Jon Mehlman

Facsimile No.: (212) 421-5799

Telephone No.: (646) 626-8857

with copies to:

c/o American Realty Capital

405 Park Avenue

New York, New York 10022

Attn: Michael Ead

Facsimile No.: (212) 421-5799

Telephone No.: (646) 381-0604

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and to:

Goodwin Procter LLP

53 State Street

Boston, MA 02109

Attn: Samuel L. Richardson, Esq.

Facsimile No.: (617) 523-1231

Telephone No.: (67) 570-1878

Special Member:

c/o Corporation Service Company

2711 Centerville Road, Suite 400

Wilmington, DE 19808

Attn: Independent Director Services

Facsimile No.: (302) 636-5454

Telephone No.: (302) 636-5401, ext. 65466

2.9           Authorized Persons. Erin Corbett, is hereby designated as an “authorized person” within the meaning of the Act, and has executed, delivered and filed the Certificate of Formation of the Company with the Secretary of State of the State of Delaware. Upon the filing of the Certificate of Formation with the Secretary of State of the State of Delaware, his (or her) powers as an “authorized person” ceased, and the Managing Member thereupon became the designated “authorized person” and shall continue as the designated “authorized person” within the meaning of the Act. The Managing Member shall execute, deliver and file any other certificates (and any amendments and/or restatements thereof) necessary for the Company to qualify to do business in any jurisdiction in which the Company may wish to conduct business. Any actions taken by any of the foregoing persons in connection with the execution, delivery or filing of the Certificate with the Secretary of State of the State of Delaware or the qualification of the Company or the Subsidiaries to do business or any other action relating thereto is hereby ratified, confirmed and approved by the Members as having been authorized by the Company.

2.10         Representations by the Class B Member. The Class B Member represents, warrants and agrees to and for the benefit of the Class A Member that, as of the Effective Date:

(a)           it is a corporation, a limited liability company or limited partnership, as the case may be, duly organized or formed and validly existing and in good standing under the laws of the state of its organization or formation; it has all requisite corporate, limited liability company or partnership power and authority to enter into this Agreement, to acquire and hold its Interest and to perform its obligations hereunder; and the execution, delivery and performance of this Agreement and each other Transaction Document to which it is a party has been duly authorized by all necessary corporate, limited liability company or partnership action;

(b)           its execution and delivery of this Agreement and each other Transaction Document to which it is a party and the performance of its obligations hereunder and thereunder will not conflict with, result in a breach of or constitute a default (or any event that, with notice or lapse of time, or both, would constitute a default) or result in the acceleration of any obligation under any of the terms, conditions or provisions of any other agreement or instrument to which it

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is a party or by which it is bound or to which any of its property or assets are subject, conflict with or violate any of the provisions of its Organizational Documents, or violate any statute or any order, rule or regulation of any court or governmental or regulatory agency, body or official, in any manner that would adversely affect the performance of its duties hereunder; such Member has obtained any consent, approval, authorization or order of any court or governmental agency or body required for the execution, delivery and performance by such Member of its obligations hereunder and thereunder;

(c)          there is no action, suit or proceeding pending against the Class B Member or, to its knowledge, threatened in any court or by or before any other governmental agency or instrumentality that would prohibit its entering into or performing its obligations under this Agreement or any other Transaction Document;

(d)          this Agreement and each other Transaction Document to which it is a party is a binding agreement on the part of the Class B Member enforceable against the Class B Member in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights;

(e)          each of the Company and each of the Subsidiaries has filed, or caused to be filed, all material tax returns (federal, state, local and foreign) required to be filed and paid all amounts of taxes shown thereon to be due (including interest and penalties) and has paid all other taxes, fees, assessments and other governmental charges (excluding real estate taxes and assessments in respect of the Properties, but including any taxes payable as a result of the consummation of the transactions contemplated by the Sale Agreement) owing by it, except for such taxes (i) which are not yet delinquent or (ii) as are being contested in good faith and by proper proceedings, and against which adequate reserves are being maintained in accordance with generally accepted accounting principles;

(f)          each of the Company, each Guarantor and the Class B Member is in full compliance with all Legal Requirements applicable to it, except for such instances of noncompliance when taken individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect;

(g)          none of the Company, any Subsidiary, the Class B Member or any ERISA Affiliate of any of the foregoing has incurred any liability under Title IV or Section 302 of ERISA or Section 412 of the Code or maintains or contributes to, or is or has been required to maintain or contribute to, any employee benefit plan subject to Title IV or Section 302 of ERISA or Section 412 of the Code. The consummation of the transactions contemplated hereby will not constitute or result in any transaction prohibited by Section 406 of ERISA or Section 4975 of the Code;

(h)          none of the Company, the Subsidiaries or the Class B Member is (i) an “investment company” as defined in the Investment Company Act, or controlled by such a company, or (ii) subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act, or the Interstate Commerce Act, each as amended;

(i)          none of the Company, any Subsidiary, the Class B Member or any Guarantor has filed or, to its knowledge, is contemplating the filing of a petition under any state or federal bankruptcy or insolvency laws or the liquidation of all or a major portion of its assets or property,

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and to its knowledge, no Person has threatened or is contemplating the filing of any such petition against the Company, any Subsidiary, the Class B Member or any Guarantor;

(j)          neither the Company nor any Subsidiary has any outstanding Indebtedness other than as permitted under the Senior Loan Documents, and the Class B Member does not have any outstanding Indebtedness for borrowed money;

(k)          there are no actions, suits or legal, equitable, arbitration or administrative proceedings pending or, to its knowledge, threatened against the Company, any Subsidiary or the Class B Member or any Guarantor which, if adversely determined could be reasonably expected to result in a Material Adverse Effect;

(l)          none of the Class B Member, the Company, any Subsidiary or any Person controlling any of the foregoing has violated any of the covenants contained in Schedule 5.15(a) hereto (other than with respect to any obligations requiring a Special Member prior to the date hereof);

(m)          none of the Company, any Subsidiary or the Class B Member (or, if the Class B Member is disregarded as separate from its owner for tax purposes, the owner of the Class B Member for tax purposes) is a “foreign person” within the meaning of § 1445(f)(3) of the Code;

(n)          neither the Company nor any Subsidiary has entered any agreement or other arrangement for the provision of asset or property management, leasing or other advisory services or any franchise agreement with respect to any of the Properties prior to the Effective Date, except for any such agreements that (x) forms of which have been delivered to the Class A Member at least two (2) Business Days prior to the Effective Date and (y) would comply with the terms of this Agreement if entered into by the Company or any of its Subsidiaries following the Effective Date.

2.11         Representations by the Class A Member. The Class A Member represents, warrants and agrees to and for the benefit of the Class B Member that, as of the Effective Date:

(a)           it is a limited liability company, duly formed and validly existing and in good standing under the laws of the state of its formation; it has all requisite limited liability company power and authority to enter into this Agreement, to acquire and hold its Interest and to perform its obligations hereunder; and the execution, delivery and performance of this Agreement and each other Transaction Document to which it is a party has been duly authorized by all necessary limited liability company action;

(b)           the Class A Member is acquiring its Interest for its own account, solely for investment purposes and not with a view to resale or distribution thereof;

(c)           the Class A Member acknowledges that (1) the offering and sale of the Interest (A) has not been and will not be registered under the U.S. Securities Act of 1933, as amended from time to time (the “Securities Act”), the securities laws of any state of the United States or the securities laws of any other jurisdiction, nor is such registration contemplated, (B) is being made in reliance upon federal and state exemptions for transactions not involving a public offering and/or rules governing offers and sales made outside the United States and (2) the Company will not be registered as an investment company under the U.S. Investment Company

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Act of 1940, as amended from time to time (the “Investment Company Act”). In furtherance thereof, the Class A Member represents and warrants that it is an “accredited investor” (as defined in Regulation D under the Securities Act), and a “qualified purchaser” (as defined in the Investment Company Act);

(d)          the Class A Member (either alone or together with any advisers retained by such person in connection with evaluating the merits and risks of prospective investments) has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of purchasing the Interest. The Class A Member’s financial situation is such that the Class A Member can afford to bear the economic risk of holding its Interest for an indefinite period of time, and the Class A Member can afford to suffer the complete loss of the Class A Member’s investment. The Class A Member understands that (A) its Interest has not been and will not be registered under the Securities Act or the securities laws of any U.S. state and accordingly may not be offered, sold, transferred or pledged unless its Interest is duly registered under the Securities Act and all other applicable securities laws or financial services laws or regulations of any jurisdiction or such offer or sale is made in accordance with an exemption from registration (including, if applicable, Regulation S), (B) this Agreement contains substantial restrictions on the transferability of its Interest, (C) no market for resale of its Interest exists or is expected to develop, (D) the Class A Member may not be able to liquidate its investment in the Company and (E) any instruments representing its Interest may bear legends restricting the transfer thereof. The Class A Member understands that its Interest will not be evidenced by a certificate subject to Article 8 of the Uniform Commercial Code; and

(e)          the Class A Member has been furnished with, and has carefully read, this Agreement and has been given the opportunity to (i) ask questions of, and receive answers from, the Managing Member or any Affiliate thereof concerning the terms and conditions pertaining to an investment in the Company and (ii) obtain any additional information which the Managing Member can acquire without unreasonable effort or expense that is necessary to evaluate the merits and risks of an investment in the Company. To the full satisfaction of the Class A Member, the Class A Member has been furnished with any materials the Class A Member has requested relating to the Company or the issuance of its Interest. In considering its acquisition of its Interest, the Class A Member is not relying, and will not rely with respect to its Interest upon any representations or warranties made by, or other information (including, without limitation, any advertisement, article, notice or other communication published in any newspaper, magazine, website or similar media or broadcast over television or radio, and any seminars or meetings whose attendees have been invited by any general solicitation or advertising) furnished by or on behalf of, the Company, the Managing Member, the Class B Member, any Affiliate of the foregoing or any of their respective directors, officers, employees, partners, shareholders, advisers, attorneys-in-fact, representatives or agents, written or otherwise, other than as set forth in this Agreement, the other Transaction Documents and/or any separate agreement in writing with the Managing Member executed in conjunction with the Class A Member’s acquisition of its Interest. The Class A Member acknowledges that it was offered its Interest through private negotiations, not through any general solicitation or advertising. The Class A Member has carefully considered and has, to the extent it believes such discussion necessary or appropriate, discussed with legal, tax, accounting and financial advisers the suitability of an investment in the Company in light of its particular tax and financial situation, and has determined that its Interest is a suitable investment for it.

2.12         Certain Tax Matters.

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(a)          The Members and the Company agree that for tax purposes, the Class A Member’s Initial Capital Contribution in exchange for its rights to the distributions set forth in Article 8 and Section 10.3 shall be treated as a disguised sale (under Section 707 of the Code and the Treasury Regulations thereunder) from the Class A Member to the Class B Member on the Effective Date, and that the rights to receive the distributions set forth in Article 8 and Section 10.3 shall be treated as an obligation of the Class B Member to make such payments as consideration for such disguised sale.

(b)          The Members intend that the Company be disregarded as an entity separate from the owner of the Class B Member for tax purposes, and that the Class A Member not be treated as a “partner” of the Company for tax purposes. The Company shall not elect to be classified as an association taxable as a corporation on Internal Revenue Service Form 8832.

(c)          The Members and the Company agree, except as otherwise required by applicable law (as agreed to by the Managing Member and the Class A Member) or pursuant to a “determination” within the meaning of Section 1313(a) of the Code, not to take an inconsistent position with such treatment on any tax return. Subject to the preceding sentence, in the event that the Class A Member is required to be treated as a “partner” of the Company for tax purposes, income, gain, loss and deduction with respect to any property contributed to the capital of the Company by the Members shall, solely for tax purposes, be allocated among the Members so as to take into account any variation between the adjusted basis of such property for federal income tax purposes and the value of such property reflected on the books of the Company using the “ remedial method” described in Treasury Regulations Section 1.704-3(b).

(d)          The Members acknowledge that the Class B Member is an Affiliate of the REIT and agree to manage the Company and its Subsidiaries in a manner that enables the REIT to qualify as a real estate investment trust within the meaning of Section 856 of the Code and that recognizes the income, asset and operating requirements applicable to a real estate investment trust under the Code. To this end, the Members shall cooperate to cause the Company and its Subsidiaries (i) to (A) limit the investment of amounts deposited in the Cash Management Account to investments treated as cash, cash items or government securities for purposes of Section 856(c)(4) of the Code and (B) otherwise operate in such a manner such that the Company, assuming it were a real estate investment trust, would satisfy the income and asset tests applicable to real estate investment trusts and would not be subject to any taxes under Section 857 of the Code, and (ii) to avoid taking any action that could otherwise result in the REIT failing to qualify as a real estate investment trust under the Code. Notwithstanding the preceding provisions of this Section 2.12(d), nothing herein shall in any way limit the rights or remedies of the Class A Member hereunder or under any of the other Transaction Documents or modify the economic or other terms of this Agreement or the other Transaction Documents. The provisions of this Section 2.12(d) shall continue to apply for so long as the Class B Member owns an economic interest in the Company and, if the Class B Member is not the Managing Member, the Managing Member shall provide the Class B Member with any information regarding the Company it reasonably requests for purposes of establishing the Company’s compliance with this Section 2.12(d).

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ARTICLE 3

MANAGEMENT OF COMPANY BUSINESS;
POWERS AND DUTIES OF THE MEMBERS

3.1          Management of the Company Business.

(a)          Subject to the provisions of this Article 3 and the other provisions of this Agreement, the Managing Member shall have the right, power and authority and the duty to manage the day-to-day operations of the Company in accordance with the terms hereof, this Agreement and applicable laws and regulations. The Managing Member shall devote such time to the Company and its business as is necessary to conduct the operations of the Company in an efficient manner and to carry out the Managing Member’s responsibilities as set forth herein. In furtherance of the foregoing, but subject to the limitations in this Article 3 and the other provisions of this Agreement and the Senior Loan Documents, the Managing Member shall have the right, authority and duty to deal with, operate and manage the Properties on behalf of the Company and its Subsidiaries.

(b)          The Managing Member shall not have any right, power or authority under this Agreement or otherwise to (and shall not) bind or take any action on behalf of or in the name of the Company, or enter into any commitment or obligation binding upon the Company, that would constitute a Significant Decision, unless authorized by the Class A Member in advance in the manner set forth herein. To the fullest extent permitted by law, and without limiting its indemnification pursuant to Section 4.3(a), the Managing Member shall indemnify and hold harmless the Company and the other Members and their Affiliates from and against any and all claims, demands, losses, damages, liabilities, lawsuits and other proceedings, judgments and awards, and costs and expenses (including, but not limited to, reasonable attorneys’ fees) arising, directly or indirectly, in whole or in part, out of any breach of the provisions of this Section 3.1(b) by the Managing Member or any Affiliate of the Managing Member. The Managing Member shall not be entitled to any compensation from the Company for performance of its duties as Managing Member.

(c)          The Managing Member shall meet in person or telephonically with the Class A Member and/or its agents or designees at such reasonable times as the Class A Member may reasonably request to discuss the business and affairs of the Company, but in no event more frequently than monthly.

3.2           Appointment of Initial Managing Member. Subject to Section 3.3 and the other provisions of this Agreement, the Members hereby appoint the Class B Member as the initial Managing Member with the rights and responsibilities set forth in Section 3.1 and subject to the limitations set forth in Section 3.1(b), Section 3.6 and elsewhere in this Agreement. The rights of the Class B Member as Managing Member may not be assigned voluntarily or by operation of law by the Class B Member, and the duties of the Class B Member as Managing Member may not be delegated voluntarily or otherwise by the Class B Member.

3.3          Class A Member’s Rights Following a Changeover Event.

(a)           Notwithstanding the appointment set forth in Section 3.2 or any other provision of this Agreement to the contrary, upon the occurrence of a Changeover Event (subject to the

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provisions of Section 3.5 solely in the case of those events described in clauses (4), (5), (6), (10), (11), (18), (19), (20), (21) and (22) of the definition of Changeover Event) and the delivery by the Class A Member to the Class B Member of notice to such effect: (i) the Class B Member automatically, immediately and without any further action by the Class A Member or any other Person shall cease to be the Managing Member, (ii) all references in this Agreement to the term “Managing Member” shall refer to the Class A Member or such other Person as the Class A Member may then designate as Managing Member, (iii) the Class A Member, individually, or together with any designee appointed by it to act as Managing Member, shall have the exclusive right, power and authority, to make any and all decisions and take any actions (including, without limitation, any Significant Decisions) on behalf of or with respect to the Company and each of its Subsidiaries, provided, however, that the duties and obligations of the Managing Member to the other Members shall not be assumed by the Class A Member, and (iv) the Class A Member shall have the exclusive right, power and authority in its sole and absolute discretion to terminate the Property Management Agreements in accordance with the terms thereof (and each such Property Management Agreement entered into with an Affiliate of the Class B Member (and any related sub-property management agreement) shall provide that it shall be terminable by the Class A Member in such instance without payment of any termination or similar fee), and subject to the terms of the Senior Loan Documents, appoint a replacement. Any reasonable, out-of-pocket expenses incurred by the Class A Member, including any amounts payable to Affiliates of the Class A Member, in acting as the Managing Member of the Company shall be promptly reimbursed by the Company. The Class A Member’s authority and rights pursuant to the preceding sentence are in addition to, and not in limitation or to the exclusion of, any of the Class A Member’s other rights or remedies herein or in any of the other Transaction Documents following a Changeover Event. Upon the declaration of a Changeover Event by the Class A Member, the Class A Member shall deliver, or cause its Affiliate to deliver, to Senior Lender the replacement guaranty and environmental indemnity required by the terms of the Senior Loan Documents.

(b)          For the avoidance of any doubt, and without limiting the foregoing, the Class B Member hereby consents and agrees that upon the declaration by the Class A Member of the occurrence of a Changeover Event (subject to the provisions of Section 3.5 solely in the case of the events described in clauses (4), (5), (6), (10), (11), (18), (19), (20), (21) and (22) of the definition of Changeover Event), the Class A Member shall have sole and exclusive right, power and authority (i) to sell the Company or the direct or indirect interests of the Company in its Subsidiaries or cause the Company and each Subsidiary to sell or refinance all or any portion of its assets at such time or times as the Class A Member in its sole discretion shall determine, regardless of market conditions, real estate values or financial conditions at such time or times, regardless of the impact of such sale or refinancing or the timing thereof on the Company or the Class B Member (and regardless of the benefits derived by the Class A Member or the consequences suffered by the Class B Member or any Affiliate thereof by virtue of or from such sale or refinancing), provided that in no event may the Class A Member sell the Company or any of its Subsidiaries or any of the Properties to the Class A Member or an Affiliate of the Class A Member, (ii) to cause the Company and/or its applicable Subsidiaries to incur one or more Additional Mezzanine Loans pursuant to the terms of the Senior Loan Documents, (iii) to cause the Company promptly to make any and all payments and/or distributions to the Class A Member and any of its Affiliates to the extent of any amounts then due or past due or that thereafter become payable pursuant to this Agreement or any other Transaction Document or of all or any portion of the Class A Member’s Unrecovered Capital (whether or not then “due”), regardless of the impact of such payments or distributions on the Company or the Class B Member, (iv) to

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cause the Company to liquidate pursuant to Article 10, and (v) to exercise the rights and powers granted to it pursuant to paragraph (a) above, including, without limitation, the making of any Significant Decision, in such manner as the Class A Member determines, in its sole discretion, and, in each of the foregoing cases, take (or cause the Company or any of its Subsidiaries to take) all actions and make all decisions that are reasonably related to its exercise of the foregoing remedies).

(c)          In financing or refinancing a Property or any other asset of the Company or any Subsidiary under the circumstances described in (b) above, the Class A Member may conduct the financing process or refinancing process, as applicable, in any manner the Class A Member determines, in its sole discretion, provided, that in no event may the Class A Member cause the Company or any Subsidiary to enter into financings or refinancings with the Class A Member or an Affiliate of the Class A Member.

(d)          The Class B Member acknowledges and agrees that in exercising the authority granted to the Class A Member in the foregoing provisions and elsewhere in this Agreement and each other Transaction Document relating to or following a Changeover Event, to the fullest extent permitted by law, the Class A Member shall have no duty, obligation or liability (fiduciary or otherwise) to the Class B Member or any Affiliate thereof or any other Person whatsoever (other than as expressly set forth in this Agreement), it being understood that the Class A Member shall be entitled to exercise such authority in any manner it deems necessary or desirable to maximize the value of its investment in the Company or to fulfill any other Class A Member objective.

(e)          In addition to the rights and remedies set forth in this Article 3 and elsewhere in this Agreement, following the occurrence of a Changeover Event, the Unrecovered Capital shall accrue a return in favor of the Class A Member at the Increased Rate.

(f)          The Class B Member acknowledges and agrees that the authority granted to the Class A Member in this Article 3 was a material inducement and conditions precedent to the Class A Member’s willingness to make its investment in the Company, and that the Class A Member would have refused to make its investment absent such authority.

(g)          Notwithstanding the foregoing provisions of this Section 3.3, following the replacement of the Managing Member by the Class A Member pursuant to the terms of Section 3.3(a), the Managing Member shall not take or cause the Company or any Subsidiary to take any of the following actions (each, a “Fundamental Decision”), unless such action has been approved by all of the Equity Members in writing and in advance:

(1)         causing the Company or any Subsidiary to engage in any business other than the business described in Section 2.5 hereof;

(2)         acquiring any other real property other than the Properties and any fee estate(s) underlying any Property that is subject to a ground lease;

(3)         except for mergers between or only the Company and its Subsidiaries, causing the Company or any Subsidiary to undertake a merger or consolidation;

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(4)         instituting proceedings to adjudicate the Company or any Subsidiary a bankrupt, or consenting to the filing of a bankruptcy proceeding against the Company or any Subsidiary, or filing a petition or answer or consent seeking reorganization of the Company or any Subsidiary under the Bankruptcy Code or any other similar applicable federal, state or foreign law, or consenting to the filing of any such petition against the Company or any Subsidiary, or consenting to the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of the Company or any Subsidiary or of its property, or making an assignment for the benefit of creditors of the Company or any Subsidiary or otherwise taking action that would trigger full recourse to any guarantor of any Senior Loan that is an Affiliate of the Class B Member; or

(5)         terminating the operating lease for the Properties between the Mortgage Borrower and the TRS, except for the termination of the operating lease with respect to any Properties which are sold by the Mortgage Borrower.

(6)         causing the Company or any Subsidiary to enter into any agreement or arrangement with the Class A Member or an Affiliate of the Class A Member unless such agreement or arrangement is on arm’s-length commercially reasonable terms.

3.4           Buy/Sell Following a Changeover Event; Remedy Not Exclusive.

(a)           Subject to Section 3.5, if the Class A Member gives the Class B Member notice of a Changeover Event, then, in addition to all other rights of the Class A Member hereunder at law or otherwise, the Class A Member shall have the right (but not the obligation), in its sole and absolute discretion to initiate the following “buy/sell” procedure by delivering an election notice to the Class B Member (such notice, an “Election Notice”). Such Election Notice shall state that the Class A Member has elected to initiate the buy/sell procedures in this Section 3.4, pursuant to which the Company will be sold to either the Class B Member or the Class A Member. Within ten (10) Business Days after receiving an Election Notice from the Class A Member (with time being of the essence), the Class B Member shall deliver to the Class A Member a response (the “Buy/Sell Response Notice”) setting forth a proposed price (the “Offer Price”) for the Company. Any such Buy/Sell Response Notice shall state that it is, and in any event shall be deemed, an irrevocable and unconditional offer by the Class B Member (i) to buy the Interest of the Class A Member for (A) the amount that the Class A Member would have received if the Company were sold for the Offer Price and the proceeds thereof were distributed to the Members in accordance with Section 8.4, plus (B) without duplication, any amounts owed to the Class A Member and any of its Affiliates pursuant to the terms hereof (including as a result of the Changeover Event in question), less (C) the amount of the Class B Member Deposit (as hereinafter defined) posted by the Class B Member (the “Class A Interest Sale Price”) and (ii) to sell to the Class A Member the Interest of the Class B Member for (A) the amount that the Class B Member would have received if the Company were sold for the Offer Price and the proceeds thereof were distributed to the Members in accordance with Section 8.4, less (B) without duplication, any amounts owed to the Class A Member and any of its Affiliates pursuant to the terms hereof (including as a result of the Changeover Event in question), less (C) the amount of the Class A Member Deposit (as hereinafter defined) posted by the Class A Member (the “Class B Interest Sale Price”). If the Class B Member shall fail to deliver a Buy/Sell Response Notice within such 10-Business Day period, then the Class B Member shall nevertheless be deemed to have delivered, and the Class A Member shall be deemed to have received, a Buy/Sell Response Notice with an Offer Price equal to the Redemption Price. The Class A Member shall have the right, by notice to the Class B

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Member within ten (10) Business Days after the delivery (or deemed delivery) of the Buy/Sell Response Notice, either:

(1)         to buy (or have its designee buy) the Interest of the Class B Member for the Class B Interest Sale Price, or

(2)         sell the Class A Member’s Interest in the Company to the Class B Member (or to their designee) for the Class A Interest Sale Price.

(b)          If the Class A Member does not respond to a Buy/Sell Response Notice within ten (10) Business Days following its receipt (or deemed receipt) thereof and the Class A Interest Sale Price set forth in such Buy/Sell Response Notice is greater than the Redemption Price, the Class A Member shall be deemed to have elected to sell its Interest to the Class B Member for such Class A Interest Sale Price. If the Class A Member does not respond to a Buy/Sell Response Notice within ten (10) Business Days of receipt thereof and the Class A Interest Sale Price set forth in such Buy/Sell Response Notice is equal to or less than the Redemption Price, the value of the Interest of the Class B Member shall conclusively be deemed to be zero ($0) and the Class A Member shall be deemed to have elected to buy the Interest of the Class B Member for a Class B Interest Sale Price equal to $1.

(c)          If the Class A Member elects (or is deemed to have elected) to sell its Interest to the Class B Member (or its designee) for the Class A Interest Sale Price, then, within thirty (30) days following such election, the Class B Member shall fund to the Class A Member a non-refundable earnest money deposit in the amount of five percent (5%) of the Class A Interest Sale Price (the “Initial Class B Member Deposit”). If the Class B Member shall fail to fund the Initial Class B Member Deposit to the Class A Member on or prior to the expiration of such 30-day period, then (i) the election of the Class A Member to sell its Interest to the Class B Member (or its designee) for the Class A Interest Sale Price shall be deemed revoked and the Class A Member shall instead be deemed to have elected to purchase the Class B Member’s Interest for the Class B Interest Sale Price and (ii) the Class B Interest Sale Price for such acquisition shall be $1.

(d)          If the Class A Member elects to acquire the Interest of the Class B Member for the Class B Interest Sale Price, then, within thirty (30) days following such election, the Class A Member shall fund to the Class B Member a non-refundable earnest money deposit in the amount of five percent (5%) of the Class B Interest Sale Price (the “Class A Member Deposit” and each of the Class A Member Deposit and the Class B Member Deposit being referred to herein as a “Deposit”). If the Class A Member shall fail to fund the Class A Member Deposit to the Class B Member on or prior to the expiration of such 30-day period, then the Class A Member shall be deemed to have elected to sell its Interest to the Class B Member for the Class A Interest Sale Price and the Class B Member shall have a period of ten (10) Business Days to either (1) elect to acquire the Internet of the Class A Member for the Class A Interest Sale Price or (2) elect not to acquire the Interest of the Class A Member, in which case the Class A Member may not issue a new Election Notice for a period of thirty (30) days.

(e)          Subject to Section 3.4(h), the closing for any such sale transaction shall occur no later than sixty (60) days after the date on which the Initial Class B Member Deposit or the Class A Member Deposit (as applicable) has been funded, with time being of the essence. If either Member defaults on its obligation to close within the 60-day period described above, then, in addition to any other rights and remedies available to the non-defaulting Member, (x) if the non-

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defaulting Member received a Deposit from the defaulting Member, the non-defaulting Member shell be entitled to keep such Deposit, together with any interest thereon, as liquidated damages, it being agreed that the non-defaulting Member’s actual damages would be difficult, if not impossible, to ascertain and that the liquidated damages hereinabove specified are a fair and reasonable estimate of the actual damages that the non-defaulting Member would suffer in the event of a default by the other Member; each Member hereby acknowledges and agrees that said liquidated damages are in no way a penalty or forfeiture, but instead represent the Members’ best estimate of the actual damages that would be suffered by the non-defaulting Member in the event of such a default, and (y) if the non-defaulting Member funded a Deposit, the non-defaulting Member shall be entitled to receive a return of such Deposit and seek specific performance of the defaulting Member’s obligation to sell its Interest to the non-defaulting Member.

(f)          Each of the Class A Member and the Class B Member hereby acknowledges and agrees that upon exercise by the Class A Member (or its designee) of the buy/sell option as described above, the selling Member must and will transfer its Interest free and clear of all Liens and adverse claims other than Liens arising pursuant to the terms of the Senior Loan Documents, this Agreement or any other Transaction Document. In the event that a Member shall have created or suffered any unauthorized Liens or other adverse claims against all or any portion of its Interest, then in addition to any other remedies then available, the acquiring Member or its designee shall be entitled to an action for specific performance to compel the selling Member and its constituent members and controlling persons to cause such adverse interests to be removed without any cost to the Company or the acquiring Member.

(g)          At the closing of any sale of a Member’s Interest under this Section, each of the buying Member and the selling Member shall be deemed to have released the other from any and all claims, obligations, liabilities, actions, judgments, suits or proceedings relating to the Company, the Members’ Interests and the Properties, except for liabilities arising under the Guarantees or the Environmental Indemnity Agreement which by their terms survive redemption of the Interests of the Class A Member. Each Member agrees to deliver any additional documents reasonably requested by the other Member to evidence or effectuate such releases.

(h)          In connection with any acquisition by the Class B Member of the Class A Member’s Interest pursuant to the terms of this Section 3.4, the Class B Member must comply with all applicable assumption, transfer and change in control conditions and provisions of the Senior Loan Documents and must obtain a release of the Class A Member and/or its Affiliates from their respective obligations under any guarantees and/or indemnities provided to the Senior Lenders in connection with the declaration of a Changeover Event, which compliance and release shall each be a condition to the obligation of the Class A Member to sell its Interest to the Class B Member pursuant to this Section 3.4. If the Class B Member fails to satisfy the conditions to closing set forth in the immediately preceding sentence prior to the expiration of the 60-day period described in paragraph (c) above, then the Class A Member’s election to sell its Interest to the Class B Member shall be null and void and the Class A Member shall instead be deemed to have elected to acquire the Class B Member’s Interest, provided that the Class B Interest Sale Price for such acquisition shall be $1; provided that the Class B Member shall be entitled to extend such 60-day period for an additional thirty (30) days in order to satisfy such condition if the Class B Member funds to the Class A Member an additional non-refundable earnest money deposit in the amount of five percent (5%) of the Class A Interest Sale Price (the “Additional Class B Member Deposit” and, together with the Initial Class B Member Deposit, collectively, the “Class B Member Deposit”).

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(i)         The Class B Member will bear the costs incurred by both parties in connection with the exercise of the buy/sell, including reasonable attorneys’ fees and expenses, transfer taxes, termination fees (including contractual damages) and the costs of obtaining any consents or approvals.

(j)          Subject to Section 3.4(g), the Class B Member hereby acknowledges and agrees that none of the rights granted in this Section 3.4 is intended or shall be deemed to be exclusive, but that each is intended to and will be in addition to all the other rights available to the Class A Member following a Changeover Event, whether pursuant to the terms of this Agreement, any other Transaction Document, at law, in equity, or otherwise.

(k)          Nothing herein shall limit the Class B Member’s right to redeem the Class A Member’s Interest in the Company pursuant to terms of Section 8.3 hereof.

3.5         The Class B Member’s Rights Following a Changeover Event. If, the Class A Member gives the Class B Member a notice alleging the occurrence of a Changeover Event pursuant to Section 3.3 (such notice, a “Changeover Notice”) alleges only the occurrence of events of the type described in clauses (4), (5), (6), (10), (11), (18), (19), (20), (21) and (22) of the definition of Changeover Event and not of events described in any other clauses of the definition of Changeover Event, then, unless an arbitration award or judicial determination has already been issued supporting the allegations of the Changeover Notice, the Class B Member shall be entitled, within ten (10) Business Days after delivery of the Changeover Notice, to contest such allegations by delivering good faith written notice containing reasonable detail as to its basis for contesting such allegations (a “Dispute Notice”) within such 10-Business Day period to the Class A Member and, within such 10-Business Day period, submitting the same to arbitration in accordance with the provisions of Section 12.10. If the Class B Member fails to give such Dispute Notice within such 10-Business Day period, then (i) it shall be automatically and conclusively deemed that the allegations in the Changeover Notice are true and (ii) the Class A Member shall be entitled to exercise all of its rights hereunder, including its rights to initiate the buy/sell and sell the Properties, the Company or the Subsidiaries. If the Class B Member timely delivers a Dispute Notice and submits the matter to arbitration as aforesaid and the arbitration panel appointed pursuant to Section 12.10 determines that (x) one or more of the events described in the Changeover Notice did constitute one or more Changeover Events, then the Class A Member shall be entitled to exercise all of its rights and remedies hereunder retroactive, as applicable, to the date on which the Class A Member delivered the Changeover Notice, including its rights to charge the Increased Rate and to initiate the buy/sell and sell the Company, the Subsidiaries or the Properties, or (y) none of the events described in the Changeover Notice constituted a Changeover Event, then it shall be automatically and conclusively deemed that the Changeover Events specified in the Changeover Notice did not occur and the Class B Member shall be reinstated as the Managing Member (if it was acting as Managing Member immediately prior to the Class A Member’s declaration of a Changeover Event) and the Class A Member shall not be entitled to exercise its rights with respect to such Changeover Notice (without prejudice to its rights and remedies with respect to any other occurrence of a Changeover Event). In no event may the arbitration panel consider the enforceability of any provision of this Agreement, and the scope of any proceeding before the arbitration panel shall be limited to whether the grounds for the declaration of a Changeover Event in fact existed. Pending the ruling of such arbitration panel, a Changeover Event subject to this Section 3.5 will not be deemed to have occurred with respect to the matters before the arbitration panel, the Class A Member will not have the right to sell the Properties, the Company or the Subsidiaries or initiate the buy/sell procedures described

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in Section 3.4 in respect of such Changeover Event and the Managing Member shall continue to operate the Company and the Subsidiaries in the ordinary course of business and in accordance with the terms of this Agreement. In no event may the Class B Member arbitrate the occurrence of any Changeover Event described in clauses (1), (2), (3), (7), (8), (9), (12), (13), (14), (15), (16) or (17) of the definition of “Changeover Event” and any declaration by the Class A Member of a Changeover Event based in whole or in part on any one or more of the events described in such clauses shall be effective immediately.

3.6           Significant Decisions. Notwithstanding anything to the contrary set forth in this Agreement but subject to Section 3.3, no Member shall take or cause or permit the Company or any Subsidiary to take any of the following actions, expend any amount of money, make any decision or incur any obligation on behalf of the Company or any Subsidiary with respect to any matter within the scope of any of the matters enumerated below (each a “Significant Decision”) unless the action, expenditure or other decision has been approved by the Class A Member in writing and in advance and has been approved in accordance with any other requirements of this Agreement:

(1)         except for any sale of one or more Properties where the Net Disposition Proceeds therefrom are sufficient to pay all amounts owing to the Senior Lenders in respect of such sale and for the Company to pay the Release Payment required to be paid to the Class A Member in respect of such sale, sell, transfer, assign or otherwise dispose of, or enter into or cause or permit any Subsidiary to enter into any agreement or option to sell, transfer, assign or otherwise dispose of, all or any portion of any of the Properties or any other Company Asset (except immaterial items of personal property sold in the ordinary course of business) or of any of the Company’s direct or indirect interests in any Property or any Subsidiary;

(2)         (a) change the nature of the business or the method of conducting the affairs of the Company or any Subsidiary or the use of any Property or (b) acquire any land or other real property or interest therein;

(3)         enter into any agreement or other arrangement with the Class B Member, any Guarantor or any of their respective Affiliates unless (i) such agreement or other arrangement is on arm’s-length commercially reasonable terms and (ii) such agreement or other arrangement is terminable by the Class A Member following the declaration of a Changeover Event without payment of any termination or similar fee; provided that the Mortgage Loan Documents and Operating Leases are hereby approved in their current form;

(4)         fail to comply with any of the covenants set forth in Section 5.15;

(5)         to the fullest extent permitted by law, dissolve and wind-up the Company or any Subsidiary or elect to continue the Company or any Subsidiary or elect to continue the business of the Company or any Subsidiary (or permit any Subsidiary to do any of the foregoing) (other than dissolving and winding up any Subsidiary whose sole direct or indirect asset was a Property sold in accordance with the provisions hereof);

(6)         except (i) as permitted under the Senior Loan Documents, (ii) any refinancing of any of the Senior Loans in which the Company concurrently redeems the

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Class A Member’s Interest in full for the Redemption Price, and (iii) any incurrence of Additional Mezzanine Loans in accordance with the terms of the Senior Loan Documents where the Company concurrently pays the Class A Member all of the Net Financing Proceeds from the incurrence thereof, incur, renew or refinance Indebtedness of the Company or any Subsidiary (or permit any Subsidiary to do any of the foregoing);

(7)         except for modifications that are both not material and not adverse to the Class A Member or the Company or any of its Subsidiaries, modify (i) any loan documentation (including the Senior Loan Documents) executed by the Company or any Subsidiary or (ii) any other material agreement (including any franchise, leasing or property or asset management agreement) the execution of which required the approval of the Class A Member (or permit any Subsidiary to do any of the foregoing);

(8)         institute proceedings to adjudicate the Company or any Subsidiary a bankrupt, or consent to the filing of a bankruptcy proceeding against the Company or any Subsidiary, or file a petition or answer or consent seeking reorganization of the Company or any Subsidiary under the Bankruptcy Code or any other similar applicable federal, state or foreign law, or consent to the filing of any such petition against the Company or any Subsidiary, or consent to the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of the Company or any Subsidiary or of its property, or make an assignment for the benefit of creditors of the Company or any Subsidiary, or admit, in any legal proceeding, the Company’s or any Subsidiary’s inability to pay its debts generally as they become due (or permit any Subsidiary to do any of the foregoing); or make any decision on behalf of the Company or any Subsidiary with respect to any Bankruptcy or other similar proceeding under any present or future federal, state, local or other law involving the Company, any Subsidiary or any portion of the Property;

(9)         organize or form any Subsidiary of the Company or of any Subsidiary or become a member of any such entity (it being understood that (A) the Company already is a member of Mezzanine GP and TRS Holdco and a limited partner of First Mezzanine Borrower, (b) Mezzanine GP is the general partner of Mezzanine, (C) First Mezzanine Borrower is already a member of LLC Borrower, BHGL Borrower, PXGL Borrower, GBGL Borrower, NFGL Borrower, MBGL 100 Borrower, MBGL 950 Borrower and Owner GP, and a limited partner of LP Borrower, DLGL Borrower and SAGL Borrower (D) Owner GP is already the general partner of LP Borrower, DLGL Borrower and SAGL Borrower, (E) TRS Holdco is already a member of Main TRS, HIL TRS, MCK TRS, MISC TRS, DEKS TRS, and TRS GP and a limited partner of Main LP TRS and HIL LP TRS, (E) DEKS TRS is already a member of KS TRS, (F) TRS GP is already a general partner of Main LP TRS and HIL LP TRS, (H) Main LP TRS is already a member of TX Concessions, (H) TX Concessions is already a member of TX Management, (I) TX Management is already a member of TX Holdings, and (J) TX Holdings is already a member of TX Beverage), other than in connection with the incurrence of an Additional Mezzanine Loan in accordance with the terms of this Agreement, in which case the Company shall own one hundred percent (100%) of the interests in the Subsidiary formed for the purpose of incurring such Additional Mezzanine Loan, which in turn shall own one hundred percent (100%) of the interests in the First Mezzanine Borrower;

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(10)        amend this Agreement, the Certificate or any other Organizational Document of the Company, any Subsidiary (or permit any Subsidiary to do the same) or the Class B Member;

(11)        merge or consolidate the Company or any Subsidiary with or into any other Person (or permit any Subsidiary to do the same) (or engage in any other transaction having substantially the same effect);

(12)        make distributions to Members other than as required in, and in accordance with, Article 8 of this Agreement;

(13)        create or permit the creation of any encumbrance on any Property or the Company’s direct or indirect interest in any Subsidiary or any other Company Asset (or permit any Subsidiary to do any of the foregoing) other than space leases entered into in the ordinary course in accordance with the terms of the Senior Loan Documents and such other encumbrances as are permitted by the terms of the Senior Loan Documents, provided, however, that the Subsidiaries may, without the consent of the Class A Member, contest mechanics’ liens as permitted by the terms of the Senior Loan Documents;

(14)        permit any demolition, construction, alteration or removal with respect to any Property unless in accordance with the Senior Loan Documents, including matters related to casualty or condemnation (unless requisite consent is obtained); and

(15)        appoint any replacement Managing Member.

Upon the declaration of a Changeover Event, the Class A Member or any Person designated by it shall have the exclusive authority to take each of the foregoing actions and make each of the foregoing decisions on behalf of the Company as it deems appropriate in its sole discretion and any requirement in this Agreement, at law or otherwise that it seek approval from or consult with the Class B Member or any other Person shall be of no force or effect.

3.7           Class B Member Affiliate Contracts. The Class B Member shall enforce in all material respects the material obligations of each counterparty to a Class B Member Affiliate Agreement. If the Class A Member shall request in writing to the Class B Member that the Class B Member enforce any material obligation of a counterparty to any Class B Member Affiliate Contract and the Class B Member shall not, promptly following receipt of such request, proceed diligently to enforce such material obligation, then the Class A Member may, in the name of the Company and/or any of its Subsidiaries, exercise any right or remedy available to the Company and/or any of its Subsidiaries under the Class B Member Affiliate Contract in question.

3.8           Cooperation. If the Managing Member is removed as Managing Member in accordance with the provisions of this Article 3 or otherwise pursuant to the terms of this Agreement, and a replacement Managing Member has been selected by the Class A Member, or if the Class A Member has elected to exercise any of the remedies set forth in Section 3.3, then, in each case, the Managing Member shall cooperate fully with the Class A Member and, to the extent applicable, the replacement Managing Member, and furnish all books and records and any and all other information in its possession, or reasonably obtainable by the existing Managing

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Member, related to the management and development of the Company and the Properties as reasonably requested by such persons.

3.9           The Class A Member’s Right to Cure Senior Loan Defaults. If the Class A Member receives notice or otherwise becomes aware of any default (i.e., an event that would constitute an “event of default” after applicable grace and cure periods) under any of the Senior Loan Documents, then, in addition to the rights of the Class A Member to fund Protective Capital pursuant to Section 6.2 below, the Class A Member shall have the right to take any such action on behalf of the Company and its Subsidiaries as is reasonably necessary to cure such default, provided that the Class A Member first provide the Class B Member with at least two (2) Business Days’ prior notice of such proposed action unless there is not sufficient time to provide such prior notice and cure such default within the applicable grace or cure period, in which case, the Class A Member shall provide the Class B Member notice of such action concurrently with taking such action.

3.10         Mortgage Loan. For the avoidance of doubt, the Class A Member and the Class B Member each hereby approve the assumption of the Mortgage Loan by the Mortgage Borrowers, and authorize the execution, delivery and performance of their respective obligations under the Mortgage Loan Documents by the Mortgage Borrowers, any Subsidiary and the Company.

ARTICLE 4

RIGHTS AND DUTIES OF MEMBERS

4.1           Duties and Obligations of the Class B Member.

(a)           In addition to such duties as are described elsewhere in this Agreement, the Managing Member shall (or shall cause the applicable Property Managers to) (i) prepare and deliver to the Class A Member (or cause to be prepared and delivered to the Class A Member) the Annual Budget for each Budget Year in accordance with Section 5.3, (ii) deliver (and cause the Property Manager to deliver) to the Class A Member promptly upon its receipt, copies of all (x) summonses and complaints served on the Company, any Subsidiary or the Class B Member (as the Managing Member of the Company) which are (I) served against the Company or the Managing Member or (II) not covered by insurance or (III) reasonably expected to result in a Material Adverse Effect and (y) written notices of default on any loan or other indebtedness for borrowed money of the Company or any Subsidiary or of any judgment or attachment against any Company Asset, the Property or the direct or indirect interests of Company in the Subsidiaries that is either against the Company or in excess of $1,000,000, (iii) monitor the Company’s and the Subsidiaries’ compliance with the Senior Loan Documents (and use diligent efforts to cause their compliance with the terms thereof), mortgages (and cause their compliance with the terms thereof) and any other agreements to which the Company or any Subsidiary is bound unless any such non-compliance is not reasonably expected to be material (and taking appropriate steps on behalf of the Company to cure any non-compliance to the extent permitted under this Agreement and promptly notifying the Class A Member of any such non-compliance), and (iv) carry out its responsibilities under Section 4.2 and the other sections of this Agreement.

(b)           In the event the Class B Member shall fail to perform or comply with, or to cause the performance of or compliance with, any obligation or duty imposed on the Managing Member

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pursuant to this Agreement, then, without limiting any other remedy available to the Class A Member, the Class A Member shall have the right (but not the obligation) after ten (10) Business Days’ notice to the Managing Member to perform or comply with, or cause the performance of or compliance with, such obligation, any such additional cost or expense to be reimbursed by the Company.

4.2           Prohibition of Other Activities of the Class B Member. The Class B Member agrees that it will not engage in any activity not related to the Company or invest in any venture other than the Company or possess any interest therein independently or with others. Notwithstanding the foregoing, any owner of a direct or indirect interest in the Class B Member may engage or invest in any other activity or venture or possess any interest therein independently or with others whether or not in competition with the Company or any Subsidiary. In addition, no owner of a direct or indirect interest in the Class B Member or any other Person employed by, related to or in any way affiliated with any such Person shall have, by virtue of the terms of this Agreement, any duty or obligation to disclose or offer to the Company or the Members, or obtain for the benefit of the Company or the Members, any other activity or venture or interest therein, and none of the Company, the Members, the creditors of the Company or any other Person having any interest in the Company shall have (A) any claim, right or cause of action under this Agreement against the Class B Member or any owner of a direct or indirect interest in the Class B Member or any other Person employed by, related to or in any way affiliated with any such Person, by reason of any direct or indirect investment or other participation, whether active or passive, in any such activity or venture or any interest therein or (B) any right under this Agreement to participate therein.

4.3           Limitation on Member Liability; Indemnification.

(a)           Except as otherwise expressly provided by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be the debts, obligations and liabilities solely of the Company, and no Member shall be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a Member of the Company; provided, however, that the foregoing shall not: (i) relieve the Guarantors from any liability arising under the Guarantees or the Environmental Indemnity Agreement or otherwise limit or impair the obligations of the Guarantors thereunder or (ii) have any effect on the liability of such Persons for their own willful or tortious misconduct.

(b)           In any threatened, pending or completed action, suit or proceeding, to the fullest extent permitted by law, each Member shall be fully protected, indemnified and held harmless by the Company against all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, proceedings, costs, expenses and disbursements of any kind or nature whatsoever (including, without limitation, reasonable attorneys’ fees, costs of investigation, fines, judgments and amounts paid in settlement, actually incurred by such Member in connection with the business of the Company any Subsidiary or any Property in connection with such action, suit or proceeding) (collectively, “Damages”) by virtue of its status as Member or with respect to any action or omission taken or suffered in good faith, other than liabilities and losses resulting from the fraud, gross negligence or willful misconduct of such Member; provided, however, such Member shall not be so indemnified for any acts determined by any adjudicative or arbitration procedure to be in contravention of an express term of this Agreement or in breach of its fiduciary duties. The indemnification provided by this Section 4.3(b) shall be recoverable only out of the assets of the Company, and no indemnity payment from funds of the Company (as distinct from

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funds from other sources, such as insurance) shall be payable under this Section from amounts owing to the Class A Member.

(c)          The Company shall indemnify, reimburse, defend and hold harmless the Class A Member and its Related Persons for, from and against any and all Damages of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against them, in any way relating to or arising out of the following: (i) the making of the Class A Member’s Capital Contribution, (ii) owning or holding the Class A Member’s interest, (iii) enforcing the Class A Member’s rights or remedies under this Agreement, (iv) any acts or omissions of the Class A Member (directly or through its Affiliates) as a Member or Managing Member, as applicable, or (v) any Environmental Claim resulting from any circumstance, condition, action or event first occurring after the date hereof (other than Environmental Claims arising from circumstances, conditions, actions or events first occurring after the date of the declaration of a Changeover Event and not caused by the Class B Member or an Affiliate thereof); provided, however, that neither the Class A Member nor any of its Related Persons shall have the right to be indemnified under this subsection (c) for the Class A Member’s or its Affiliates’ own gross negligence, illegal acts, fraud or willful misconduct. For purposes of this Section 4.3(c), the Company shall not be deemed to be an Affiliate of the Class A Member unless and until the Class A Member exercises control over the Company following the declaration of a Changeover Event. The provisions of and undertakings and indemnification set forth in this subsection (c) shall survive the repayment in full of all sums otherwise due the Class A Member under this Agreement or in respect of its Interest, the transfer of the entirety of the Class A Member’s Interest to unaffiliated third parties, and the termination of this Agreement or liquidation of the Company.

(d)           All obligations in this Agreement to indemnify, defend, or hold harmless the Class A Member shall survive the Transfer or redemption of the Class A Member’s Interest, and the sale or other Transfer of any Property.

4.4           Compensation of Members and their Affiliates.  No Member, nor any of their respective Affiliates, shall be entitled to compensation from the Company in connection with any matter that may be undertaken in connection with the fulfillment of its duties and responsibilities hereunder.

4.5           Use of Company Property. No Member shall make use of the property or funds of the Company, or assign its rights to specific Company property, other than for the business or benefit of the Company.

4.6           Tax Contests. The Class B Member shall give prompt notice to the Class A Member of any and all tax proceedings relating to any matters covered in Section 2.12. The Managing Member shall furnish the Class A Member with timely and reasonably detailed status reports regarding any such tax proceedings promptly after any material new development, and the Class A Member shall be given reasonable advance notice by the Managing Member so that it shall have the opportunity to participate, and permit its professional tax advisers to participate, in person in all of such tax proceedings (including prior review of submissions by the Company and any of its Subsidiaries in respect of any such tax proceedings). The Class B Member shall not to settle any such tax proceeding which would have an adverse effect on the Class A Member without obtaining the prior approval of the Class A Member, such approval not to be unreasonably withheld, conditioned or delayed.

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4.7           Duty of the Class A Member. To the fullest extent permitted by law, the Class A Member shall have no fiduciary or other duty to any other Member or to the Company, and each other Member waives any fiduciary or other duty or claim based thereon; provided, however, that the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing. In furtherance of the foregoing, each Member acknowledges and agrees that the Class A Member shall be entitled, in granting or withholding any consent or approval or carrying out any of its rights or remedies hereunder, to consider only the interests of the Class A Member and such other factors as the Class A Member determines in its sole discretion (even if such interests are different than or at odds or in conflict with the interests of the Company or other Members) and that the Class A Member has no duty or obligation to give any consideration to any interest of, or factors affecting, the Company or the other Members; provided, however, that the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing. Whenever the Class A Member is permitted to make a determination in “good faith” or another express standard, the Class A Member shall act under such express standard and shall not be subject to any other or different standard imposed by any other relevant provision of law or otherwise. Whenever the Class A Member is permitted to consent, withhold consent, approve, withhold approval or to take any other action under the terms of this Agreement, it may do so in its sole and absolute discretion and judgment unless this Agreement expressly states otherwise, and any approval or consent of the Class A Member shall not be effective unless given in writing. The Class B Member acknowledges and agrees that the Class A Member and/or any owner of a direct or indirect interest in the Class A Member may engage or invest in any other activity or venture or possess any interest therein independently or with others whether or not in competition with the Company or any Subsidiary notwithstanding any provision to the contrary at law or in equity. Neither the Class A Member nor any owner of a direct or indirect interest in the Class A Member or any other Person employed by, related to or in any way affiliated with any such Person shall have any duty or obligation to disclose or offer to the Company or the Members, or obtain for the benefit of the Company or the Members, any other activity or venture or interest therein, and none of the Company, the Members, the creditors of the Company or any other Person having any interest in the Company shall have (A) any claim, right or cause of action against the Class A Member or any owner of a direct or indirect interest in the Class A Member or any other Person employed by, related to or in any way affiliated with any such Person, by reason of any direct or indirect investment or other participation, whether active or passive, in any such activity or venture or any interest therein or (B) any right to participate therein.

ARTICLE 5

BOOKS AND RECORDS; ANNUAL REPORTS; EXPENSES AND OTHER MATTERS

5.1           Books of Account. At all times during the continuance of the Company, the Class B Member (in its capacity as Managing Member) shall keep or cause to be kept true and complete books of account in which shall be entered fully and accurately each transaction of the Company. Such books shall be kept on the basis of the Fiscal Year in accordance with the accrual method of accounting, and shall reflect all Company transactions in accordance with generally accepted accounting principles prevailing in the United States of America.

5.2           Availability of Books of Account. All of the books of account referred to in Section 5.1, together with an executed copy of this Agreement and the Certificate, and any amendments thereto, shall at all times be maintained at the principal office of the Company or such other location as the Managing Member may propose and the Class A Member shall

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approve, and upon reasonable advance written notice to the Managing Member, shall be open to the inspection and examination of each other Member or its representatives during reasonable business hours.

5.3           Annual Reports and Statements; Annual Budgets. (a) The Class B Member (in its capacity as Managing Member) shall provide to each other Member, copies of all quarterly and annual financial statements and other financial reports delivered to the Mortgage Lender concurrently with the delivery of such reports to the Mortgage Lender, it being agreed that the foregoing shall include financial statements and other financial reports presenting the financial results and other information for the Company and its Subsidiaries on a consolidated basis. In addition, the Class B Member (in its capacity as Managing Member) shall send to each Member (i) all other material written notices, reports and other material information required to be delivered by the Subsidiaries under any of the Senior Loan Documents concurrently with the delivery of such materials to the applicable Senior Lender(s), (ii) all completed IRS Forms 1099 for the review and approval of the Managing Member and the Class A Member no later than ten (10) days prior to the due date of such Schedules, but in no event later than February 15 of each year in draft form and February 28 of each year in final form and (iii) such other information concerning the Company and reasonably requested by any Member as is necessary for the preparation of such Member’s federal, state and local income or other tax returns.

(b)           The Managing Member has submitted an Annual Budget for the remainder of the 2015 Budget Year to the Class A Member at least thirty (30) days prior to the Effective Date. Not later than (i) December 1, 2015, the Manager Member shall prepare or cause to be prepared an Annual Budget with respect to the 2016 Budget Year, and (ii) not later than December 1 of the prior Budget Year with respect to each subsequent Budget Year, the Managing Member shall prepare for the Company for the Budget Year in question, the Annual Budget for the Company. The Class A Member shall not have the right to approve any proposed Annual Budget; provided that the Class B Member shall promptly respond to any inquiries made, or additional information requested, by the Class A Member with respect to each proposed Annual Budget.

(c)           The Company shall cause the Company’s independent accountants to prepare (under the oversight of the Managing Member), on an accrual basis, all federal, state and local tax returns required to be filed by the Company or any Subsidiary, and shall cause each Subsidiary to file all such returns and other reports that it is required by law to file. The Company shall prepare or cause to be prepared all required returns as if the Company and the Subsidiaries named in the return in a manner consistent with Section 2.12.

5.4           Class A Member’s Expenses. The Company covenants and agrees to reimburse the Class A Member upon receipt of written notice from the Class A Member for all reasonable out-of-pocket expenses incurred by the Class A Member (including reasonable attorneys’ fees and other legal expenses) in connection with (A) the negotiation, preparation, execution, delivery and administration of any consents, amendments, waivers or other modifications to this Agreement and the other Transaction Documents and any other documents or matters requested by the Class B Member; (B) enforcing or preserving any rights, in response to third party claims or the prosecuting or defending of any action or proceeding or other litigation in each case against, under or affecting the Class B Member, the Company, any Subsidiary, this Agreement, the other Transaction Documents or the Collateral or any Property; (C) enforcing any obligations of or collecting any payments due from the Class B Member or the Company under this Agreement, the other Transaction Documents or with respect to any Property (including any

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modification, restructuring or “work out” related to the Transaction Documents or the obligations thereunder); and (D) any insolvency or bankruptcy proceedings.

5.5           Cash Management Account. Concurrently herewith, the Managing Member has opened an interest bearing account (the “Cash Management Account”) with Wells Fargo Bank, National Association (or such other banking institution as the Class A Member may select hereafter; the “Cash Management Bank”). The Company shall cause all cash allowed to be distributed to the Company pursuant to the Senior Loan Documents and available after payment of rent by the TRS as required under the Operating Leases to be deposited in the Cash Management Account on the first Business Day that such distribution would be allowed under the Senior Loan Documents. The Company may not establish or maintain any other bank accounts, securities accounts or other accounts without the prior approval of the Class A Member (which approval, among other things, may be expressly conditioned on appropriate cash management agreements in favor of the Class A Member). Amounts on deposit in the Cash Management Account shall be distributed in accordance with Sections 8.1 and 8.4.

(a)           Pursuant to the terms of the Cash Management Agreement (and any substitute or additional cash management agreement for any substitute or additional Company accounts) , (i) until the declaration of a Changeover Event, the Class B Member shall have control over, and the sole right to withdraw funds from, the Cash Management Account (and any substitute or additional Company accounts), and (ii) following the declaration of a Changeover Event, the Class A Member shall have control over, and the sole right to withdraw funds from, the Cash Management Account (and any substitute or additional Company accounts).

(b)           All reasonable costs and expenses for establishing and maintaining the Cash Management Account shall be paid by the Company. All interest on the Cash Management Account shall be added to and become a part of the Cash Management Account and shall be disbursed in the same manner as other monies deposited in the Cash Management Account. The Class A Member shall not be liable for any loss sustained on the investment of any funds in accordance with this Agreement.

5.6           Plan Assets. Neither the Company nor any of its Affiliates shall at any time (a) hold any Plan Assets; (b) maintain or contribute to, or agree to maintain or contribute to, or permit any ERISA Affiliate to maintain or contribute to or agree to maintain or contribute to, or permit any ERISA Affiliate to maintain or contribute to or agree to maintain or contribute to, any employee benefit plan subject to Title IV or Section 302 of ERISA or Section 312 of the Code; or (c) engage in a non-exempt prohibited transaction described in Section 406 of ERISA or Section 4975 of the Code, as such sections relate to the Company and its Affiliates, or in any transaction that would cause any obligation or action taken or to be taken hereunder or under the Transaction Documents to be a non-exempt prohibited transaction under ERISA.

5.7           Insurance.  (a)  The Company shall cause each Subsidiary to keep the Properties it owns insured at all times with the coverage and in the amounts required hereunder against loss or damage by fire and against loss or damage by other risks and hazards covered by a standard extended coverage insurance policy (including, without limitation, riot and civil commotion, vandalism, malicious mischief, burglary and theft on the “Special Form” (formerly an “All Risk” form)). Such insurance shall be in an amount (i) equal to at least the full replacement cost of the improvements, furniture, fixtures and equipment owned by such Subsidiaries (exclusive of the cost of foundations and footings), without deduction for physical depreciation, (ii) such that the

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insurer would not deem any Subsidiary a co-insurer thereunder and (iii) at least equal in type and amount to the types of coverage and amounts required by the lender in any of the Senior Loan Documents.

(b)           The Company will maintain the insurance policies described in Section 5.1 of the Mortgage Loan Agreement whether or not the Mortgage Loan Documents remain in effect.

5.8           Casualty/Condemnation. (a) In the event of any Casualty or Condemnation requiring notice to the Mortgage Lender, the Company shall give prompt notice thereof to each of the Managing Member and the Class A Member. Subject to the terms of any of Senior Loan Documents, the Managing Member may settle and adjust any claims and the reasonable expenses incurred by them in the adjustment and collection of such proceeds shall be reimbursed by the Company upon request therefor.

(b)           Notwithstanding anything to the contrary contained herein, if the Company or any of its Subsidiaries is required under the terms of the Senior Loan Documents to restore any Property, then the Company and the Subsidiaries shall be entitled to apply the insurance proceeds or the condemnation awards from the casualty or condemnation affecting such Property to such restoration in accordance with the Senior Loan Documents.

5.9           Existence; Compliance with Legal Requirements. The Company shall cause each Subsidiary to do or cause to be done all things necessary to preserve, renew and keep in full force and effect its existence as a limited liability company and all rights, licenses, permits, franchises and other agreements necessary for the continued use and operation of its business, and shall comply with all Legal Requirements and Insurance Requirements applicable to each Subsidiary and each Property in each case in accordance with the provisions of the Senior Loan Documents. In addition, and whether or not required by law, the Company shall cause each Subsidiary at all times to maintain, preserve and protect all of the Properties to the extent necessary for the continued conduct of its business and maintain the Properties in a condition at least as good as that on the date hereof except for reasonable wear and use, and from time to time make, or cause to be made, all reasonably necessary repairs, renewals, replacements, betterments and improvements thereto, or, in each case, such higher standard as required under any applicable franchise license agreement entered into by any Subsidiary in each case in accordance with the provisions of the Senior Loan Documents.

5.10         Impositions and Other Claims. The Company shall and shall cause each Subsidiary to pay and discharge, or cause to be paid or discharged, all taxes, assessments and governmental charges levied upon it, its income and assets as and when such taxes, assessments and charges are due and payable (including, without limitation, all impositions), as well as all lawful claims for labor, materials and supplies or otherwise, which could become a lien or encumbrance on any of its assets, subject to any rights to contest permitted under the Senior Loan Documents. The Company shall not permit or suffer (and shall cause the Subsidiaries not to permit or suffer) to exist any Lien on any Property, the Company’s direct or indirect interest in the Subsidiaries or any other Company Asset, other than Permitted Encumbrances (as defined in the Senior Loan Documents) or the security interest of the Class A Member in the Cash Management Account; provided, however, that the Subsidiaries may, without the consent of the Class A Member, contest mechanics’ liens as permitted by the terms of the Senior Loan Documents. If a Lien is imposed on a Property due solely to Senior Lender’s failure to pay taxes that, under the Senior Loan Documents, the Senior Lender is obligated to pay and for which

44

sufficient funds in the Senior Loan tax reserve are available, the imposition of such Lien will not constitute a breach of this covenant or a Changeover Event.

5.11         Litigation. The Managing Member shall give prompt written notice to the Class A Member of any litigation or governmental proceedings pending or threatened (in writing) against the Company, the Class B Member, any Guarantor or any Subsidiary of which it has actual knowledge which, if determined adversely to such Person, could reasonably be expected to have a Material Adverse Effect.

5.12         Access to Properties. The Company shall, and shall cause each Subsidiary to, permit agents, representatives and employees of the Class A Member or its Affiliates to inspect all of the Properties or any part thereof and the books and records of the Company and each Subsidiary at any time and from time to time as may be requested by the Class A Member or such Affiliates.

5.13         Notice of Default. The Managing Member shall promptly advise the Class A Member of any change in the condition, financial or otherwise, of the Company, any Guarantor or any Subsidiary which has had or is reasonably expected to have any Material Adverse Effect, or of the occurrence to the best of the Managing Member’s knowledge of the occurrence of any Changeover Event or of any event that, with the giving of notice of the passage of time, could become a Changeover Event.

5.14         Intentionally Omitted.

5.15         Conduct of Business.

(a)           The Class B Member, the Company and each Subsidiary shall conduct their respective affairs in accordance with each of the covenants and restrictions set forth on Schedule 5.15(a) (which schedule is hereby incorporated into and made a part of this Agreement) and neither the Company nor the Class B Member shall take any action or refrain from taking any action (or permit any Subsidiary to take any action or refrain from taking any action), inconsistent with the foregoing.

(b)           The Company and the Class B Member agree to the representations, warranties and covenants set forth in Schedule 5.15(b).

(c)            Neither the Company nor the Class B Member shall take any action or refrain from taking any action (or cause or permit any Subsidiary to take any action or refrain from taking any action) which, whether with or without the giving of notice or the passage of time or both, could reasonably be expected to give rise to any liability or loss to any of Whitehall Street or Whitehall Parallel under any of the Whitehall Guarantees, and the Organizational Documents of each Subsidiary shall similarly prohibit the taking or suffering by any such Subsidiary of any action or omission which, whether with or without the giving of notice or the passage of time or both, could reasonably be expected to give rise to any liability or loss to any of Whitehall Street or Whitehall Parallel under any of the Whitehall Guarantees.

5.16         Standard of Operation. Subject to Section 3.6 and the terms of the Senior Loan Documents, the Company shall operate or cause to be operated the Properties at all times in a manner consistent with at least the standard of operation of the Properties as of the Effective Date

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(or, if greater, in accordance with the terms of the applicable franchise license agreements entered into by any Subsidiary).

5.17         No Sales of Assets. Without the prior written consent of the Class A Member, the Company will not, and will not enter into any agreement or option to, sell, transfer, assign or otherwise dispose of any of the Company’s interests in any Company Asset including any direct or indirect interest in any Subsidiary or any Property (excluding transfers of immaterial items of personal property in the ordinary course of business), nor will it permit any Subsidiary to, or to enter into any agreement or option to, sell, transfer, assign or otherwise dispose of any Property (excluding transfers of immaterial items of personal property in the ordinary course of business), except (i) for all-cash consideration and (ii) in an amount that would, after taking into account any amounts payable under the Senior Loan Documents, result in the Company receiving an amount equal to or greater than such Property’s Release Payment, unless the Redemption Price is paid in full.

5.18         Compliance with Senior Loans. At all times, whether or not the Senior Loans remain outstanding, the Managing Member and the Company shall comply, and cause each Subsidiary and Property Manager that is an Affiliate of the Class B Member to comply with all provisions of the Senior Loan Documents.

5.19         Intentionally Omitted.

5.20         Prohibited Persons. The Class B Member shall not permit the Company or any Subsidiary to: (i) conduct any business, nor engage in any transaction or dealing, with any Prohibited Person, including, but not limited to, the making or receiving of any contribution of funds, goods, or services, to or for the benefit of a Prohibited Person; or (ii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set in Executive Order.

5.21         Forgiveness of Debt. None of the Company, the Class B Member or any Subsidiary shall cancel or otherwise forgive or release any material claim or debt owed to it by any Person, except for adequate consideration or in the ordinary course of its business.

ARTICLE 6

CAPITAL CONTRIBUTIONS,
LOANS AND LIABILITIES

6.1           Initial Capital Contributions of the Members. Each of the Members is hereby deemed to have made initial contributions to the Company (the “Initial Capital Contributions”) and to have Percentage Interests as set forth in Schedule 6.1. The limited liability company interests issued to each Equity Member pursuant to this Agreement have been duly authorized and are validly issued limited liability company interests.

6.2           Protective Capital/Additional Capital. In the event that the Company has insufficient cash on hand (i) to pay debt service owing pursuant to any of the Senior Loan Documents or to cure or avoid a default under any of the Senior Loan Documents (including to make any repairs or replacements, capital improvements or other expenditures required under the Senior Loan Documents), (ii) to pay real estate taxes, insurance premiums or ground rents, or

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(iii) to make any expenditures (including, without limitation, to fund the costs of any environmental remediation) or other disbursements to third parties that are necessary to preserve or protect any of the Properties or the Company’s direct or indirect interest therein (any additional funds required for purposes of funding any of the foregoing items are referred to herein as “Protective Capital”), the Class B Member shall contribute to the Company additional capital, in cash, in an amount sufficient to enable the Company to meet the obligation giving rise to such need on a timely basis, in which event sums so contributed shall be treated as an additional Capital Contribution. If the Class B Member fails to contribute such Protective Capital within the applicable time period set forth in paragraph (b) below after the Class A Member gives the Class B Member written notice that it has reasonably determined that the Company is in need of such additional capital, then, subject to the limitations set forth in paragraph (b) below, the Class A Member shall have the right, power and authority, but not the obligation, to make such payments on the Company’s behalf and, notwithstanding the limitations set forth in Article 3, to take any other actions reasonably related thereto in the Company’s name and on the Company’s behalf to fulfill the purpose for which the Protective Capital was needed, and the amount of any advance made by the Class A Member, together with any expenses incurred by the Class A Member in connection therewith (collectively, the “Class A Member Protective Advance”), shall constitute an additional Capital Contribution by the Class A Member, which shall be returned in full (together with a return thereon at the Increased Rate) prior to any distributions to the Class B Member. The provisions of this Agreement, including this Section 6.2, are intended to benefit the Members and, to the fullest extent permitted by law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor of the Company shall be a third-party beneficiary of this Agreement).

(a)          The Class A Member shall not be entitled to make any Protective Capital contribution unless it has first given the Class B Member at least five (5) Business Days’ prior written notice of its intention to make the contribution (which notice will specify the amount of the proposed contribution and the purpose for which the contribution is being made), provided, however, that the Class A Member may make a Protective Capital contribution upon one (1) day’s prior notice to the Class B Member in the case of an emergency (e.g., an expense necessary to prevent the incurrence by the Company or any Subsidiary of penalties or late fees or a default under the Senior Loan Documents, to prevent other imminent material harm to the Company, the Subsidiaries or the Properties or to preserve human health and/or safety), or with such shorter or no prior notice (but subsequent notice of such emergency and the Protective Capital contribution relating thereto as soon as possible thereafter) to the extent that one (1) day’s notice would jeopardize the ability of the Class A Member to respond to the emergency. The Class B Member shall contribute to the Company funds necessary to enable the Company to reimburse the Class A Member for any such emergency contribution within five (5) days after receipt of notice that the contribution was made, together with interest thereon at the Increased Rate until repaid.

(b)          Notwithstanding anything to the contrary herein, the Class A Member shall not be required under any circumstance to contribute additional capital or other amounts to the Company and no other Member shall be required to contribute additional capital except as set forth in this Section 6.2. Following the occurrence of a Changeover Event, the Class A Member shall be entitled to fund additional Capital Contributions from time to time as necessary to manage, operate, finance and sell the Company and its Subsidiaries and the Properties, as determined by the Class A Member in its sole and absolute discretion.

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6.3          Application of Capital. The Class B Member shall take such actions as are reasonably necessary on behalf of the Company and/or any of its Subsidiaries to disburse the proceeds of any Capital Contributions or Protective Capital for the purposes for which the funds were contributed.

6.4          Capital of the Company. Except as expressly provided for in this Agreement, no Member shall be entitled to withdraw or receive any interest or other return on, or return of, all or any part of its Capital Contribution, or to receive any Company Assets (other than cash) in return for its Capital Contribution. The Class A Member shall not be entitled to make a Capital Contribution to the Company except as expressly authorized or required by this Agreement.

ARTICLE 7

INTENTIONALLY OMITTED

ARTICLE 8

APPLICATIONS AND DISTRIBUTIONS
OF AVAILABLE CASH; REDEMPTION

8.1          Distributions of Cash. The Managing Member shall cause the Company to distribute all Available Cash (other than Net Sales Proceeds, Net Disposition Proceeds, Net Financing Proceeds and the QCR Redemption Amount, which shall be distributed in accordance with Section 8.4) monthly on each Scheduled Distribution Date as follows:

(1)         First, 100% to the Class A Member until it has received payment of the unpaid Increased Return, if any, and then any other Class A Return, if any, for any Accrual Periods ending on or prior to such Scheduled Distribution Date;

(2)         Second, 100% to the Class A Member until it has received payment of all Protective Capital contributed by the Class A Member plus, to the extent not returned under clause (i), the Increased Return thereon calculated from the date such contribution was made until repaid in full;

(3)         Third, if a Changeover Event has occurred, 100% to the Class A Member until the Class A Member has received in full the Redemption Price as of such Scheduled Distribution Date; and

(4)         Fourth, all remaining cash flow may be distributed to the Class B Member or, if the Class A Member has purchased the Interest of the Class B Member pursuant to Section 3.4, shall be distributed to the Class A Member.

(b)          The unavailability of cash to pay in full the amounts due to the Class A Member shall not excuse the Company’s obligation to pay such amounts, which shall be an unconditional obligation.

(c)          Notwithstanding the foregoing, if the Sellers shall at any time be obligated to pay any First Pool Offset Amounts (as such term is defined in the Sale Agreement), then the Company shall pay such obligation to the Class B Member from amounts which would otherwise

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be distributed to the Class A Member (but any such payment shall nonetheless constitute distribution(s) to the Class A Member for purposes of this Agreement).

8.2          Sales; Financings; Qualified Capital Raises.

(a)          In the event of a sale, transfer, assignment or other disposition of any Property by any Subsidiary or of any of the Company’s direct or indirect interests in any Property or any Subsidiary, as applicable, the net proceeds to the Company (taking into account amounts paid to the Senior Lender pursuant to the Senior Loan Documents) from such sale, transfer, assignment or other disposition after deduction of reasonable third-party costs approved by the Class A Member (such proceeds, the “Net Sale Proceeds”), shall be distributed as provided in Section 8.4.

(b)          In the event of (i) the Company or any of its Subsidiaries incurs any Additional Mezzanine Loans or (ii) there is a refinancing of any of the Senior Loans, then the net proceeds to the Company (taking into account amounts paid to the Senior Lender pursuant to the Senior Loan Documents) from such financing or refinancing, as applicable, after deduction of all reasonable third-party costs approved by the Class A Member (such net proceeds, the “Net Financing Proceeds”), shall be distributed as provided in Section 8.4.

(c)          In the event of the occurrence of any Qualified Capital Raise during any calendar month, the Class B Member shall cause an amount equal to the QCR Redemption Amount for such Qualified Capital Raise (together with an accounting of all Qualified Capital Raises that occurred during such month) to be contributed to the Company by no later than the fifth (5th) day of the next calendar month (or the next Business Day if such 5th day is not a Business Day) and the Company shall immediately distribute such amount as provided in Section 8.4.

8.3          Redemption Right.

(a)          On any date from and after the Effective Date, the Class B Member shall have the right, on ten (10) days’ prior written notice to the Class A Member, to redeem all or any portion of the Class A Member’s Interest in the Company at a price equal to the Redemption Price as of such date (or, in the case of a redemption in part, the amount being so redeemed in an amount no less than $1,000,000, together with the amounts described in clauses (ii), (iii) and (iv) of the definition of “Redemption Price” contained herein), provided, however, that if a Changeover Event has been declared, then such redemption right may only be exercised until the earliest to occur of (i) in the case of a Changeover Event only, the completion of the “buy/sell” procedure described in Section 3.4 and (ii) the occurrence of a Bankruptcy with respect to the Company, the Class B Member or any Subsidiary (and after the first to occur of any of these events, neither Company nor the Class B Member shall have any right to redeem the Class A Member).

(b)          Upon any closing of a redemption of one hundred percent (100%) of the Class A Member’s Interest permitted hereunder, and assuming that the Company has paid in full the Redemption Price and any and all fees and expense reimbursements then owing to the Class A Member and any of their Affiliates or designees, the Class A Member shall assign its Interest to the Class B Member or its designee without recourse and without representation or warranty other than that it owns the Interest and the same has not been transferred, pledged or otherwise encumbered (other than such encumbrances as are being released or terminated concurrently with such transfer).

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8.4          Distribution of Capital Event Proceeds. Net Sale Proceeds, Net Disposition Proceeds, Net Financing Proceeds and the QCR Redemption Amount shall be distributed immediately upon receipt as follows:

(1)         First, 100% to the Class A Member until it has received payment of the unpaid Increased Return, if any, and then any other Class A Return, if any, for any Accrual Periods ending on or prior to such date;

(2)         Second, 100% to the Class A Member until it has received payment of all Protective Capital contributed by the Class A Member plus, to the extent not returned under clause (1), the Increased Return thereon calculated from the date such contribution was made until repaid in full;

(3)         Third, 100% to the Class A Member until the Class A Member has received: (i) in the event the Capital Event in question is a refinancing of any of the Senior Loans, the full Redemption Price as of the date such distribution is made, (ii) in the event the Capital Event in question is a sale of one of more of the Properties (or any indirect interest therein), the full Release Payments for such Properties (or such indirect interest, as applicable), (iii) in the case of a distribution of the QCR Redemption Amount in respect of any Qualified Capital Raise, such QCR Redemption Amount, and (iv) in the event of any other Capital Event, all of the Capital Event Proceeds from such other Capital Event (but, in the event such Capital Event only affects certain Properties (as opposed to all Properties), only in an amount up to the Release Payment for such Property), which distribution pursuant to this clause (3) shall be considered a return of, and reduce, the Class A Member’s Unrecovered Capital;

(4)         Fourth, if a Changeover Event has occurred, 100% to the Class A Member until the Class A Member has received in full the Redemption Price as of the date such distribution is made; and

(5)         Fifth, 100% to the Class B Member or, if the Class A Member has purchased the Interest of the Class B Member pursuant to Section 3.4, 100% to the Class A Member.

8.5          Distribution After Changeover Event. Notwithstanding anything to the contrary herein, in no event will the Class B Member receive or be entitled to receive distributions or other amounts from the Company or any Subsidiary after a Changeover Event has occurred until the Class A Member has received all sums due it hereunder including the Redemption Price, and thereafter all sums shall be payable to the Class B Member.

ARTICLE 9

TRANSFER OF COMPANY INTERESTS

9.1          Restrictions on Transfers by the Class B Member.  

(a)          Except as expressly permitted by the rules set forth in Section 9.1(b) (any such permitted transfers, “Permitted Transfers”), the Class B Member may not Transfer, nor permit the Transfer of, all or any of its Interest to any Person and no Person owning any direct or indirect

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legal, beneficial or other interest in the Class B Member may Transfer, or permit the Transfer, of such interest, in each case without the Class A Member’s prior written consent.

(b)          The direct or indirect transfer of membership interests in the members of the Class B Member by which, in a single transaction or a series of transactions, in the aggregate, not more than forty-nine percent (49%) of the direct and indirect membership interests in any member of the Class B Member shall be vested in parties not having an ownership interest as of the date hereof shall constitute a Permitted Transfer if (i) such Transfer constitutes a Qualified Capital Raise pursuant to the terms hereof, (ii) such Transfer does not violate the terms of the Senior Loan Documents, (iii) except for Transfers of direct or indirect interests in ARC OP, no Changeover Event has occurred and remains uncured, (iv) the Company and the Subsidiaries continue to be in compliance with the single purpose covenants set forth in Schedule 5.15(a), (v) except for Transfers of direct or indirect interests in ARC OP, the Class A Member receives not less than ten (10) days’ prior written notice of such proposed transfer, and (vi) following such Transfer, the Class B Member continues to be Controlled, directly or indirectly, by ARC OP, ARC OP continues to be Controlled, directly or indirectly by the REIT, and the REIT continues to be Controlled, directly or indirectly, by AR Capital, LLC.

9.2          Transfers by the Class A Member.

(a)          Until the occurrence of a Changeover Event (the date of such occurrence, “Lockout Expiration Date”), (i) the Class A Member shall not Transfer all or any portion of its Interest without the consent of the other Member, (ii) Whitehall Street shall own greater than fifty percent (50%) of the direct or indirect membership interests in the Class A Member, and (iii) GS Group shall continue to, directly or indirectly, Control the Class A Member, provided that (x) no transfer of any direct or indirect interest in the Class A Member (other than transfers of direct and/or indirect interests in Whitehall Street) shall be permitted until the date which is two hundred seventy (270) days following the date hereof and (y) following such 270-day period, any transfer of direct or indirect non-Controlling interests in the Class A Member (other than transfers of direct and/or indirect interests in Whitehall Street) shall be subject to the consent of the Class B Member, not to be unreasonably withheld, delayed or conditioned; it being agreed that the Class B Member shall not be deemed to have acted unreasonably if it withholds its consent to any transfer of direct or indirect non-Controlling interests in the Class A Member to a competitor of the Class B Member or any of its Affiliates. Following the Lockout Expiration Date, the Class A Member may, from time to time and without the consent or approval of any other Member, Transfer all or any portion of its Interest to any Person so long as such Transfer does not violate the terms of the Senior Loan Documents (or if such Transfer would violate the terms of the Senior Loan Documents, the Class A Member has received consent thereto from the Senior Lender), and no change in Control or direct or indirect ownership of the Class A Member shall constitute a breach or a default hereunder. Notwithstanding the foregoing, (x) the Class A Member shall be entitled to Transfer all or any portion of its interest, and transfers of direct or indirect interests in the Class A Member shall be permitted, in either such case, if required by applicable law or regulation, and (y) Transfers of preferred stock issued by W2007 Grace Acquisition I, Inc. and/or W2007 Equity Inns Statutory Trust I shall be permitted at any time without the consent of the Class B Member.

(b)          The Class B Member shall cooperate (and cause each Guarantor to cooperate) in any Transfer by the Class A Member of its Interest, including by executing amendments to this

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Agreement or any other Transaction Document so long as any such amendment does not alter any of the economic terms of any such agreement.

9.3           Assignment Binding on Company. No Transfer of all or any part of the Interest of a Member otherwise permitted to be made under this Agreement shall be binding upon the Company unless and until a duplicate original of the assignment agreement or other instrument of transfer, duly executed and acknowledged by the assignor or transferor, has been delivered to the Company, and such instrument evidences (i) the written acceptance by the assignee of all of the terms and provisions of this Agreement, (ii) the assignee’s confirmation of the accuracy of each of the representations and warranties set forth in Section 2.10 (in the case of an assignment by the Class B Member) and the assignee’s representation that such assignment was made in accordance with all applicable laws and regulations and (iii) the consent to the Transfer of the Interest required pursuant to Section 9.1, if any. In addition, the Class A Member, in its discretion and as a condition precedent to such Person becoming a transferee, also may require any Person to whom a Transfer may be made pursuant to this Article 9 to make certain reasonable and customary representations, warranties and covenants solely to evidence compliance with U.S. federal and state securities laws including, but not limited to, representations as to its net worth, sophistication and investment intent.

9.4           Bankruptcy of a Member. To the fullest extent permitted by law, the Company shall not be dissolved or terminated solely by reason of the Bankruptcy, removal, withdrawal, dissolution or admission of any Member.

9.5           Substituted Members.  

(a)           Any Member that assigns all of its Interests pursuant to an assignment or assignments permitted under this Agreement shall cease to be a Member of the Company except that unless and until a Substituted Member is admitted in its stead, the assigning Member shall not cease to be a Member of the Company under the Act and shall retain the rights and powers of a member under the Act and hereunder, provided that such assigning Member may, prior to the admission of a Substituted Member, assign its economic interest in its Interest, to the extent otherwise permitted under this Article 9. Any Person who is an assignee of any portion of the Interest of a Member pursuant to an assignment satisfying the requirements of this Article 9 shall become a Substituted Member only when (i) the Managing Member has entered such assignee as a Member on the books and records of the Company, which the Managing Member is hereby directed to do upon satisfaction of such requirements, and (ii) such assignee has paid all of the Company’s reasonable legal fees and filing costs in connection with the substitution as a member. Any assignee who acquires an interest in the Company by operation of law (but which acquisition is or would have been prohibited by this Article 9) shall not become a Substituted Member under any circumstance.

(b)           Any Person who is an assignee of any of the Interest of a Member pursuant to an assignment satisfying the requirements of this Article 9 but who does not become a Substituted Member (or pursuant to an assignment by operation of law, who shall not become a Substituted Member) and desires to make a further assignment of any such Interest, shall be subject to all the provisions of this Article 9 to the same extent and in the same manner as any Member desiring to make an assignment of its Interest.

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9.6          Acceptance of Prior Acts. Any person who becomes a Member, by becoming a Member, accepts, ratifies and agrees to be bound by all actions duly taken pursuant to the terms and provisions of this Agreement by the Company or any of its members prior to the date such Person became a Member and, without limiting the generality of the foregoing, specifically ratifies and approves all agreements and other instruments as may have been executed and delivered on behalf of the Company prior to said date and which are in force and effect on said date.

9.7          Additional Limitations. Notwithstanding anything contained in this Agreement, no Transfer by the Class B Member shall be made unless (i) registration is not required under the Securities Act in respect of such Transfer; (ii) such Transfer does not violate any applicable federal or state securities, real estate syndication, or comparable laws; (iii) such Transfer will not be subject to, or such Transfer, when aggregated with prior Transfers in accordance with applicable law will not result in the imposition of, any state, city or local transfer taxes, including, without limitation, any transfer gains taxes, unless such assignor pays such taxes; and (iv) such Transfer will not cause the Company to be treated as a “publicly-traded partnership” within the meaning of Section 7704 of the Code. The Class A Member may elect prior to any Transfer by the Class B Member to require an opinion of counsel, or in the case of an indirect Transfer of a portion of the Class B Member’s Interest, other reasonable legal assurance with respect to any of the foregoing matters.

9.8          Restraining Order; Specific Performance; Other Remedies.

(a)          If the Class B Member shall attempt (or any holder of a direct or indirect interest in the Class B Member attempts) to Transfer all or any portion of its interest in the Company in violation of any of the provisions of this Agreement, the Class A Member, in addition to all rights and remedies hereunder, at law and/or equity, shall be entitled to seek a decree or order restraining and enjoining such Transfer and the Class B Member shall not plead in defense thereto that there would be an adequate remedy at law; it being hereby expressly acknowledged and agreed that damages at law shall be an inadequate remedy for a breach or threatened breach or violation of the provisions concerning Transfers set forth in this Agreement.

(b)          It is expressly agreed that the remedy at law for breach of any of the obligations relating to Transfers set forth in this Article 9 and elsewhere in this Agreement is inadequate in view of:

(1)         The complexities and uncertainties in measuring the actual damages that would be sustained by reason of the failure of a party to comply fully with each of said obligations; and

(2)         The uniqueness of each Member’s business and assets and the relationship of the Members.

Accordingly, each of the aforesaid obligations shall be, and is hereby expressly made, enforceable by specific performance.

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ARTICLE 10

DISSOLUTION OF THE COMPANY;
WINDING UP AND DISTRIBUTION OF ASSETS

10.1       Dissolution.  

(a)          The Company shall be dissolved and its affairs shall be wound up only upon the first to occur of the following:

(1)         so long as the Senior Obligations have been repaid in full, the joint written direction of the Managing Member and the Class A Member;

(2)         the entry of a decree of judicial dissolution under Section 18-802 of the Act; or

(3)         the termination of the legal existence of the last remaining Member of the Company or the occurrence of any other event which terminates the continued membership of the last remaining Member in the Company unless the business of the Company is continued in a manner permitted by this Agreement or the Act. Upon the occurrence of any event that causes the last remaining member of the Company to cease to be a member of the Company, to the fullest extent permitted by law, the personal representative of such member is hereby authorized and directed to, and shall, within ninety (90) days after the occurrence of the event that terminated the continued membership of such member in the Company, agree in writing (i) to continue the Company and (ii) to the admission of the personal representative or its nominee or designee, as the case may be, as a substitute Member of the Company, effective as of the occurrence of the event that terminated the continued membership of the last remaining Member.

(b)          No Member shall have the right to (i) withdraw or resign as a Member of the Company, (ii) redeem or otherwise require redemption of its limited liability company interest in the Company or any part thereof or (iii) to the fullest extent permitted by law, dissolve itself voluntarily.

(c)          Notwithstanding any other provision of this Agreement, the Bankruptcy of any of the Members shall not cause such Member to cease to be a Member of the Company and upon the occurrence of such an event, the business of the Company shall continue without dissolution.

(d)          Notwithstanding any other provision of this Agreement, each Member waives any right it might have under Section 18-801(b) of the Act to agree in writing to dissolve the Company upon the Bankruptcy of any of the Members, or the occurrence of an event that causes any of the Members to cease to be a Member of the Company.

10.2       Winding Up.  

(a)          In the event of the dissolution of the Company pursuant to Section 10.1(a), the Managing Member and the Class A Member, acting together may wind up the Company’s affairs.

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(b)          Upon dissolution of the Company and until the filing of a certificate of cancellation as provided in the Act, the Class A Member and the Managing Member, or a liquidating trustee, as the case may be, may, in the name of, and for and on behalf of, the Company, prosecute and defend suits, whether civil, criminal or administrative, gradually settle and close the Company’s business, dispose of and convey the Company’s property, discharge or make reasonable provision for the Company’s liabilities, and distribute to the Members in accordance with Section 10.3 any remaining assets of the Company, all without affecting the liability of Members and without imposing liability on any liquidating trustee.

(c)          Upon the completion of winding up of the Company, the Class A Member and the Managing Member, or a liquidating trustee, as the case may be, shall file a certificate of cancellation in the Office of the Secretary of State of the State of Delaware as provided in the Act and any other similar certificates of cancellation or termination required to discontinue its status as a legal entity or its authorization to do business in New York or any other relevant jurisdiction. The existence of the Company as a separate legal entity shall continue until cancellation of the Certificate as provided in the Act.

10.3        Distribution of Assets. Upon the winding up of the Company, the assets shall be distributed as follows:

(1)         to the satisfaction of debts and liabilities of the Company (whether by payment or the making of reasonable provision for payment thereof), in order of priority as provided by law, other than debts and liabilities owed to Members, including to the payment of expenses of the liquidation and to the setting up of any reserves that the Class A Member and the Managing Member, or the liquidating trustee, as the case may be, shall determine are reasonably necessary for any contingent, conditional or unmatured liabilities or obligations of the Company;

(2)         to the Class A Member until the Class A Member has received all Increased Return then due and payable and then all Unrecovered Capital;

(3)         to the satisfaction of debts and liabilities of the Company owed to Members; and

(4)         to the Class B Member or to the Class A Member if the Class A Member has purchased the Interest of the Class B Member pursuant to Section 3.4.

ARTICLE 11

AMENDMENTS

11.1        Amendments.

(a)          Any amendment or supplement to this Agreement implemented solely to recognize substitution of any Member expressly permitted hereunder or an assignment of any Interest made in full compliance with Article 9 may be made by either of the Managing Member or the Class A Member without the consent or approval of any other Member. In all other cases, this Agreement may only be amended, supplemented or otherwise modified with the prior written consent of the Managing Member and the Class A Member (and, if the Class B Member is not the

55

Managing Member and a proposed amendment would either (x) affect the economic rights provided herein of the Class B Member or (y) modify the rights of the Class B Member to approve the Fundamental Decisions specified herein, with the prior written consent of the Class B Member) and except with respect to the rights of the Special Member of the Company referred to in paragraph (b) below, no other Member shall have any right to approve or disapprove any amendment, supplement or other modification to this Agreement that has been approved by the Managing Member and the Class A Member. No amendment, modification, supplement, discharge or waiver hereof or hereunder shall require the consent of any Person not a party to this Agreement.

(b)          For so long as any of the Senior Loans remain outstanding, no Member shall be entitled to implement any amendment, supplement or other modification of any of Section 2.5, 2.7, 5.15 or 10.1 or this Section 11.1(b) except with the prior written approval of each of the Managing Member, the Class A Member and the Special Member of the Company, and then only if such amendment, supplement or modification is not otherwise prohibited by the provisions of any Senior Loan Documents then outstanding.

11.2         Additional Members. In addition to the requirements of Section 11.1, if this Agreement shall be amended for the purpose of adding or substituting any Member, the amendment shall be signed by the Person to be added or substituted and by the assigning Member, if any. In making any amendments, the Managing Member shall prepare and file for recordation such documents and certificates as shall be required to be prepared and filed. Except for transferees of the Class A Member’s Interest, for which no consent shall be required, additional Members may be admitted to the Company only upon the unanimous consent of all Members.

ARTICLE 12

MISCELLANEOUS

12.1         Further Assurances. Each party to this Agreement agrees to execute, acknowledge, deliver, file and record such further certificates, amendments, instruments and documents, and to do all such other acts and things, as may be required by law or as, in the reasonable judgment of the Class A Member or the Managing Member may be necessary or advisable to carry out the intent and purpose of this Agreement.

12.2         Notices. Unless otherwise specified in this Agreement, all notices, demands, elections, requests or other communications that any party to this Agreement may desire or be required to give hereunder shall be in writing and shall be given by hand by depositing the same in the United States mail, first class postage prepaid, certified mail, return receipt requested, or by a recognized overnight courier service providing confirmation of delivery, to the addresses set forth in Section 2.6 or 2.8, as applicable, or at such other address as may be designated by the addressee thereof (which in the case of the Company, shall be designated by the Class B Member) upon written notice to all of the Members. All notices given pursuant to this Section 12.2 shall be deemed to have been given (i) if delivered by hand on the date of delivery or on the date delivery was refused by the addressee or (ii) if delivered by United States mail or by overnight courier, on the date of delivery as established by the return receipt or courier service confirmation (or the date on which the return receipt or courier service confirms that acceptance of delivery was refused by the addressee).

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12.3         Remedies of the Class B Member. The Class A Member shall be required to act reasonably only in those cases expressly provided for herein. In the event that a claim or adjudication is made that the Class A Member or its agents have acted unreasonably or unreasonably delayed acting in any case where, by law or under this Agreement or the Transaction Documents, the Class A Member or such agent, as the case may be, has an obligation to act reasonably, that neither the Class A Member nor its agents shall be liable for any monetary damages, and the Class B Member’s sole remedy shall be limited to commencing an action seeking injunctive relief or declaratory judgment. Any action or proceeding to determine whether the Class A Member has acted reasonably shall be determined by an action seeking declaratory judgment, and the Class B Member hereby waives its right to seek indirect, special, punitive and/or consequential damages from the Class A Member.

12.4         Exculpation. Subject to the qualifications below, the Class A Member shall not enforce any liability or obligation of the Class B Member or the Company under this Agreement or the other Transaction Documents against any direct or indirect owner, employee or officer of the Class B Member. The provisions of this Section shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Transaction Documents; (b) affect the validity or enforceability of the Environmental Indemnity Agreement or the Guarantees or any of the rights and remedies of the Class A Member against the Company or the Class B Member under this Agreement and the other Transaction Documents; (c) constitute a prohibition against the Class A Member pursuing its rights and remedies against the Company; or (d) constitute a waiver of the right of the Class A Member to enforce the liability and obligation of the Company, by money judgment or otherwise. Nothing in this Section 12.4 shall be deemed to modify, limit or expand any exculpation provisions set forth in the Senior Loan Documents.

12.5         Headings and Captions. All headings and captions contained in this Agreement and in the table of contents hereto are inserted for convenience only and shall not be deemed a part of this Agreement.

12.6         Variance of Pronouns. All pronouns and all variations thereof shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the Person may require.

12.7         Counterparts. THIS AGREEMENT MAY BE EXECUTED IN TWO OR MORE COUNTERPARTS, EACH OF WHICH SHALL CONSTITUTE AN ORIGINAL AND ALL OF WHICH, WHEN TAKEN TOGETHER, SHALL CONSTITUTE ONE AGREEMENT.

12.8         Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.

12.9         Consent to Jurisdiction. To the fullest extent permitted by law, each party hereto hereby irrevocably consents and agrees, for the benefit of each party, that any legal action, suit or proceeding against it with respect to its obligations, liabilities or any other matter under or arising out of or in connection with this Agreement and with respect to the enforcement, modification, vacation or correction of an award rendered in an arbitration proceeding shall be brought in any city, state or federal court located in the Borough of Manhattan, The City of New York (a “New York Court”) or in the State of Delaware (a “Delaware Court”), and hereby irrevocably accepts

57

and submits to the exclusive jurisdiction of each such New York Court and Delaware Court with respect to any such action, suit or proceeding. Each party hereto also hereby irrevocably consents and agrees, for the benefit of each other party, that any legal action, suit or proceeding against it shall be brought in any New York Court or any Delaware Court, and hereby irrevocably accepts and submits to the exclusive jurisdiction of each such New York Court and Delaware Court with respect to any such action, suit or proceeding. Each party hereto waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions, suits or proceedings brought in any such New York Court or Delaware Court and hereby further waives and agrees not to plead or claim in any such New York Court or Delaware Court that any such action, suit or proceeding brought therein has been brought in an inconvenient forum. Each party agrees that (i) to the fullest extent permitted by law, service of process may be effectuated hereinafter by mailing a copy of the summons and complaint or other pleading by certified mail, return receipt requested, at its address set forth above and (ii) all notices that are required to be given hereunder may be given by the attorneys for the respective parties.

12.10      Arbitration.

(a)          Arbitration administered by the American Arbitration Association shall be the exclusive method for resolution of any claims or disputes arising out of, relating to or in connection with this Agreement or the breach thereof, and the determination of the arbitrators shall be final and binding (except to the extent there exist grounds for vacation or an award under applicable arbitration statutes) on the Members. The parties agree that they will give conclusive effect to the arbitrators’ determination and award and that judgment thereon may be entered in any court having jurisdiction. The arbitrators will have no authority to award punitive damages or any other damage not measured by the prevailing party’s actual damages, and may not, in any event, make any ruling, finding or award that does not conform to the terms and conditions of this Agreement. Each party shall bear its own costs in any arbitration.

(b)          The number of arbitrators shall be three, each of whom shall be disinterested in the dispute or controversy and shall be impartial with respect to all parties hereto. The Class A Members shall appoint one arbitrator, the Class B Member shall appoint one arbitrator and the third arbitrator shall be appointed in accordance with the then prevailing commercial arbitration rules of the American Arbitration Association, which rules shall apply to any arbitration proceeding commenced hereunder.

(c)          The place of arbitration shall be the Borough of Manhattan, The City of New York. The arbitration shall be conducted in the English language. The arbitrators shall give effect insofar as possible to the desire of the parties hereto that the dispute or controversy be resolved in accordance with good commercial practice. The arbitrators shall decide such dispute in accordance with the law of the State of Delaware, without regard to conflict of law provisions thereof. The arbitrators shall decide such dispute as expeditiously as possible and, in any event, within fifteen (15) Business Days of selection of the third arbitrator. They shall apply the commercial arbitration rules of the American Arbitration Association and Title 9 of the U.S. Code.

(d)          Notwithstanding any provision of this Agreement to the contrary, Section 3.5 and this Section 12.10 shall be construed to the maximum extent possible to comply with the laws of the State of Delaware, including the Uniform Arbitration Act (10 Del. C. § 5701, et seq.) (the "Delaware Arbitration Act"). If, nevertheless, it shall be determined

58

by a court of competent jurisdiction that any provision or wording of Section 3.5 or this Section 12.10, including any Commercial Arbitration Rules or rules of the American Arbitration Association, shall be invalid or unenforceable under the Delaware Arbitration Act, or other applicable law, such invalidity shall not invalidate all of Section 3.5 or this Section 12.10. In that case, Section 3.5 or this Section 12.10, as applicable, shall be construed so as to limit any term or provision so as to make it valid or enforceable within the requirements of the Delaware Arbitration Act or other applicable law, and, in the even such term or provision cannot be so limited, Section 3.5 or Section 12.10, as applicable, shall be construed to omit such invalid or unenforceable provision.

12.11         Partition. The Members hereby agree that no Member nor any successor-in-interest to any Member shall have the right to have the property of the Company partitioned, or to file a complaint or institute any proceeding at law or in equity to have the property of the Company partitioned, and each Member, on behalf of himself, his successors, representatives, heirs and assigns, hereby waives any such right.

12.12         Invalidity. Every provision of this Agreement is intended to be severable. The invalidity and unenforceability of any particular provision of this Agreement in any jurisdiction shall not affect the other provisions hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision were omitted.

12.13         Successors and Assigns. This Agreement shall be binding upon the parties hereto and their respective successors, executors, administrators, legal representatives, heirs and legal assigns and shall inure to the benefit of the parties hereto and, except as otherwise provided herein, their respective successors, executors, administrators, legal representatives, heirs and legal assigns. No Person other than the parties hereto and their respective successors, executors, administrators, legal representatives, heirs and permitted assigns shall have any rights or claims under this Agreement.

12.14         Entire Agreement. This Agreement, including the Schedules hereto, supersedes all prior agreements among the parties with respect to the subject matter hereof and together with the other Transaction Documents contains the entire Agreement among the parties with respect to such subject matter.

12.15         Waivers. No waiver of any provision hereof by any party hereto shall be deemed a waiver by any other party nor shall any such waiver by any party be deemed a continuing waiver of any matter by such party.

12.16         No Brokers. Each of the Members hereto warrant to each other that there are no brokerage commissions or finders’ fees (or any basis therefor) resulting from any action taken by such Member or any Person acting or purporting to act on their behalf upon entering into this Agreement. Each Member agrees to indemnify and hold harmless each other Member for all costs, damages or other expenses arising out of any misrepresentation made in this Section 12.16.

12.17         Press Releases. No Member shall issue any press release or other public communication about the formation or existence of the Company without the express prior written consent of all Members.

59

12.18         No Third Party Beneficiaries. Except as expressly stated herein, this Agreement is not intended and shall not be construed as granting any rights, benefits or privileges to any Person not a party to this Agreement. Without limiting the generality of the foregoing, no creditor of the Company shall have any right whatsoever to require any Member to contribute capital to the Company.

12.19         Construction of Documents. The parties hereto acknowledge that they were represented by separate and independent counsel in connection with the review, negotiation and drafting of this Agreement and that this Agreement shall not be subject to the principle of construing its meaning against the party that drafted same.

12.20         Time of Essence. Time is of the essence in the performance of each and every term of this Agreement.

THE REMAINDER OF THIS PAGE WAS INTENTIONALLY LEFT BLANK

60

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

CLASS B MEMBER:

AMERICAN REALTY CAPITAL HOSPITALITY

PORTFOLIO MEMBER, LP

By:	American Realty Capital Hospitality Portfolio
	Member GP, LLC, its general partner

By:

Name: Jonathan Mehlman

Title: CEO and President

[Signatures continue on next page]

Signature Page to Amended and Restated Limited Liability Company Agreement of

ARC Hospitality Portfolio I Holdco, LLC

CLASS A MEMBER:

W2007 Equity Inns Senior Mezz, LLC

By:
	Name:
	Title:

[Signatures continue on next page]

Signature Page to Amended and Restated Limited Liability Company Agreement of

ARC Hospitality Portfolio I Holdco, LLC

SPECIAL MEMBER:

William G. Popeo

Signature Page to Amended and Restated Limited Liability Company Agreement of

ARC Hospitality Portfolio I Holdco, LLC

Schedule A

Properties

Property Name	Address (Street)	Address (City, State, Zip Code)
Hampton Inn Birmingham/Mountain Brook	2731 US Highway 280	Birmingham, AL 35223
Courtyard Dallas Medical/Market Center	2150 Market Center Blvd.	Dallas, TX 75207
Hampton Inn Baltimore/Glen Burnie	6617 Ritchie Highway	Glen Burnie, MD 21061
Courtyard Mobile	1000 West I-65 Service Road	Mobile, AL 36609
Residence Inn Mobile	950 West I-65 Service Road S.	Mobile , AL 36609
Hampton Inn Norfolk-Naval Base	8501 Hampton Boulevard	Norfolk, VA 23505
Courtyard Asheville	One Buckstone Place	Asheville, NC 28805
Fairfield Inn & Suites Dallas Medical/Market Center	2110 Market Center Boulevard at Stemmons	Dallas, TX 75207
Hampton Inn Charlotte/Gastonia	1859 Remount Road	Gastonia, NC 28054
Hampton Inn Dallas -Addison	4505 Beltway Drive	Addison, TX 75001
Hampton Inn Fayetteville I-95 10/25/2007	1922 Cedar Creek Road	Fayetteville, NC 28312
Hilton Garden Inn Austin/Round Rock	2310 North IH35	Round Rock, TX 78681
Homewood Suites by Hilton San Antonio-Northwest	4323 Spectrum One	San Antonio, TX 78230
Residence Inn Los Angeles LAX/El Segundo	2135 East El Segundo Boulevard	El Segundo, CA 90245
Residence Inn San Diego Rancho Bernardo/Scripps Poway	12011 Scripps Highlands Drive	San Diego, CA 92131
SpringHill Suites Austin Round Rock	2960 Hoppe Trail	Round Rock, TX 78681
SpringHill Suites Houston Hobby Airport	7922 Mosley Road	Houston, TX 77061
SpringHill Suites San Diego Rancho Bernardo/Scripps Poway	12032 Scripps Highlands Drive	San Diego, CA 92131
Courtyard Athens Downtown	166 North Finley Street	Athens, GA 30601
Courtyard Bowling Green Convention Center	1010 Wilkinson Trace	Bowling Green, KY 42104
Courtyard Chicago Elmhurst/Oakbrook Area	370 North IL Route 83	Elmhurst, Il 60126
Courtyard Gainesville	3700 SW 42nd Street	Gainesville, FL 32608
Courtyard Jacksonville Airport Northeast	14668 Duval Road	Jacksonville, FL 32218

Courtyard Knoxville Cedar Bluff	216 Langley Place	Knoxville, TN 37922
Courtyard Lexington South/Hamburg Place	1951 Pleasant Ridge	Lexington, KY 40509
Courtyard Louisville Downtown	100 South Second Street	Louisville, KY40202
Courtyard Orlando Altamonte Springs/Maitland	1750 Pembrook Drive	Orlando, FL 32810
Courtyard Sarasota Bradenton Airport	850 University Parkway	Sarasota, FL 34234
Courtyard Tallahassee North/I-10 Capital Circle	1972 Raymond Diehl Road	Tallahassee, FL 32308
Embassy Suites Orlando International Drive/Jamaican Court	8250 Jamaican Court	Orlando, FL 32819
Fairfield Inn & Suites Atlanta Vinings	2450 Paces Ferry Road	Atlanta , GA 30339
Hampton Inn & Suites Boynton Beach	1475 West Gateway Boulevard	Boynton Beach, FL 33426
Hampton Inn & Suites Nashville/Franklin (Cool Springs)	7141 South Springs Drive	Franklin, TN 37067
Hampton Inn Albany-Wolf Road (Airport)	10 Ulenski Drive	Albany, NY 12005
Hampton Inn and Suites Colorado Springs Air Force Academy I-25 North	7245 Commerce Center Drive	Colorado Springs, CO 80919
Hampton Inn Beckley	110 Harper Park Drive	Beckley, WV 25801
Hampton Inn Boca Raton	1455 Yamato Road	Boca Raton, FL 33431
Hampton Inn Boca Raton – Deerfield Beach	660 West Hillsboro Boulevard	Deerfield Beach, FL 33441
Hampton Inn Boston/Peabody	59 Newbury Street Route 1 North	Peabody, MA 01960
Hampton Inn Charleston-Airport/Coliseum	4701 Saul White Boulevard North	Charleston, SC 29418
Hampton Inn Chattanooga-Airport/I-75	7013 Shallowford Road	Chattanooga, TN 37421
Hampton Inn Chicago/Gurnee	5550 Grand Avenue	Gurnee, IL 60031
Hampton Inn Cleveland/Westlake	29690 Detroit Road	Westlake, OH 44145
Hampton Inn Columbia - I-26 Airport	1094 Chris Drive	West Columbia, SC 29169
Hampton Inn Columbus/Dublin	3920 Tuller Road	Dublin, OH 43017
Hampton Inn Columbus-Airport	5585 Whitesville Road	Columbus, GA 31904
Hampton Inn Detroit/Madison Heights/South Troy	32420 Stephenson Highway	Madison Heights, MI 48071

Hampton Inn Detroit/Northville	20600 Haggerty Road	Northville, MI 48167
Hampton Inn Grand Rapids-North	500 Center Drive	Grand Rapids, MI 49544
Hampton Inn Kansas City/Overland Park	10591 Metcalf Frontage Road	Overland Park, KS 66212
Hampton Inn Kansas City-Airport	11212 North Newark Circle	Kansas City, MO 64153
Hampton Inn Memphis-Poplar	5320 Poplar Avenue	Memphis, TN 38119
Hampton Inn Morgantown	1053 Van Voorhis Road	Morgantown, WV 26505
Hampton Inn Palm Beach Gardens	4001 RCA Boulevard	Palm Beach Gardens, FL 33410
Hampton Inn Pickwick Dam - at Shiloh Falls	90 Old South Road	Counce, TN 38326
Hampton Inn Scranton at Montage Mountain	22 Montage Mountain Road	Scranton, PA 18507
Hampton Inn St. Louis/Westport	2454 Old Dorsett Road	Maryland Heights, MO 63043
Hampton Inn State College	1101 East College Avenue	State College, PA 16801
Hampton Inn West Palm Beach Florida Turnpike	2025 Vista Parkway	West Palm Beach, FL 33411
Holiday Inn Charleston Mt. Pleasant	250 Johnny Dodds Boulevard	Mount Pleasant, SC 29464
Holiday Inn Express and Suites: Kendall East-Miami	11520 SW 88th Street	Miami, FL 33176
Homewood Suites by Hilton Boston-Peabody	57 Newbury Street	Boston, MA 01960
Homewood Suites by Hilton Chicago-Downtown	40 East Grand Avenue	Chicago, IL 60611
Homewood Suites by Hilton Hartford/Windsor Locks	65 Ella Grasso Turnpike	Windsor Locks, CT 06096
Homewood Suites by Hilton Memphis-Germantown	7855 Wolf River Boulevard	Germantown, TN 38138
Hyatt Place Albuquerque/Uptown	6901 Arvada North East	Albuquerque, NM 87110
Hyatt Place Baltimore/BWI Airport	940 International Drive	Linthicum Heights, MD 21090
Hyatt Place Baton Rouge/I-10	6080 Bluebonnet Boulevard	Baton Rouge, LA 70809
Hyatt Place Birmingham/Hoover	2980 John Hawkins Parkway	Birmingham, AL 35244
Hyatt Place Cincinnati Blue Ash	11435 Reed Hartman Highway	Blue Ash, OH 45241
Hyatt Place Columbus/Worthington	7490 Vantage Drive	Columbus, OH 43235
Hyatt Place Indianapolis/Keystone	9104 Keystone Crossing	Indianapolis, IN 46240
Hyatt Place Kansas City/Overland Park/Metcalf	6801 West 112th Street	Overland Park, KS 66211

Hyatt Place Las Vegas	4520 Paradise Road	Las Vegas, NV 89109
Hyatt Place Memphis/Wolfchase Galleria	7905 Giacosa Place	Memphis, TN 38133
Hyatt Place Miami Airport - West/Doral	3655 NW 82nd Avenue	Miami, FL 33166
Hyatt Place Minneapolis Airport-South	7800 International Drive	Bloomington, MN 55425
Hyatt Place Nashville/Franklin/Cool Springs	650 Bakers Bridge Avenue	Franklin, TN 37067
Hyatt Place Richmond/Innsbrook	4100 Cox Road	Glen Allen, VA 23060
Hyatt Place Tampa Airport/Westshore	4811 West Main Street	Tampa Airport/Westshore, FL 33607
Residence Inn Boise Downtown	1401 Lusk Avenue	Boise, ID 83706
Residence Inn Chattanooga Downtown	215 Chestnut Street	Chattanooga, TN 37402
Residence Inn Fort Myers	2960 Colonial Boulevard	Fort Myers, FL 33912
Residence Inn Knoxville Cedar Bluff	215 Langley Place at North Peters Road	Knoxville, TN 37922
Residence Inn Lexington South/Hamburg Place	2688 Pink Pigeon Parkway	Lexington, KY 40509
Residence Inn Macon	3900 Sheraton Drive	Macon, GA 31210
Residence Inn Portland Downtown/Lloyd Center	1710 NE Multnomah Street	Portland, OR 97232
Residence Inn Sarasota Bradenton	1040 University Parkway	Sarasota, FL 34234
Residence Inn Savannah Midtown	5710 White Bluff Road	Savannah, GA 31405
Residence Inn Tallahassee North/I-10 Capital Circle	1880 Raymond Diehl Road	Tallahassee, FL 32308
Residence Inn Tampa North/I-75 Fletcher	13420 North Telecom Parkway	Tampa, FL 33637
Residence Inn Tampa Sabal Park/Brandon	9719 Princess Palm Avenue	Tampa, FL 33619
SpringHill Suites Grand Rapids North	450 Center Drive	Grand Rapids, MI 49544
SpringHill Suites Lexington Near the University of Kentucky	863 S. Broadway	Lexington, KY 40504
Homewood Suites by Hilton Phoenix-Biltmore	2001 East Highland Avenue	Phoenix, AZ 85016
SpringHill Suites San Antonio Medical Center/Northwest	3636 NW Loop 410	San Antonio, TX 78201

SCHEDULE 1.1(a)

Allocated Amounts

Property	Allocated Amount ($)
Courtyard Asheville		4,129,406
Courtyard Athens		2,975,618
Courtyard Bowling Green		3,304,333
Courtyard Chicago		2,588,269
Courtyard Dallas		6,285,769
Courtyard Gainesville		4,042,194
Courtyard Jacksonville		1,570,072
Courtyard Knoxville		2,989,932
Courtyard Lexington South Hamburg		4,395,475
Courtyard Louisville		9,270,273
Courtyard Mobile		1,354,442
Courtyard Orlando Maitland		3,851,382
Courtyard Sarasota		2,742,066
Courtyard Tallahassee		3,139,435
Embassy Suites Orlando		5,657,167
Fairfield Inn & Suites Atlanta Vinings		2,044,980
Fairfield Inn & Suites Dallas		2,029,639
Hampton Inn & Suites Nashville Franklin Cool Springs		4,994,940
Hampton Inn & Suites Palm Beach (Boynton Beach)		7,704,136
Hampton Inn Albany		5,438,237
Hampton Inn Baltimore		2,042,114
Hampton Inn Beckley		4,622,089
Hampton Inn Birmingham (Mountain Brook)		2,206,693
Hampton Inn Boca Raton		3,326,057
Hampton Inn Boston		3,103,857
Hampton Inn Charleston		1,950,250
Hampton Inn Chattanooga		1,984,525
Hampton Inn Chicago (Gurnee)		3,072,906
Hampton Inn Cleveland		3,592,361
Hampton Inn Colorado Springs		1,736,995
Hampton Inn Columbia		1,426,006
Hampton Inn Columbus		1,402,239
Hampton Inn Columbus Dublin		2,999,745
Hampton Inn Dallas		2,555,689
Hampton Inn Deerfield Beach		3,044,432
Hampton Inn Detroit (Madison Heights)		3,734,145
Hampton Inn Detroit (Northville)		2,323,620
Hampton Inn Fayetteville		2,062,821
Hampton Inn Gastonia		2,814,403
Hampton Inn Grand Rapids		3,537,531
Hampton Inn Kansas City, MO		2,203,577

Hampton Inn Kansas City, Overland Park KS	2,576,845
Hampton Inn Memphis	3,647,639
Hampton Inn Morgantown	4,202,368
Hampton Inn Norfolk	1,390,356
Hampton Inn Palm Beach Gardens	4,980,578
Hampton Inn Pickwick	594,169
Hampton Inn Scranton	3,295,404
Hampton Inn St. Louis	2,353,870
Hampton Inn State College	3,291,704
Hampton Inn West Palm Beach	4,419,350
Hilton Garden Inn Austin	3,903,589
Holiday Inn Charleston	1,877,574
Holiday Inn Express Kendall East	2,022,915
Homewood Suites Boston	2,546,526
Homewood Suites Chicago	17,418,255
Homewood Suites Hartford	2,929,417
Homewood Suites Memphis	2,553,786
Homewood Suites Phoenix Biltmore	5,896,458
Homewood Suites San Antonio	4,191,481
Hyatt Place Albuquerque	5,227,283
Hyatt Place Baltimore	2,965,158
Hyatt Place Baton Rouge	3,107,597
Hyatt Place Birmingham	2,430,269
Hyatt Place Cincinnati (Blue Ash)	2,456,900
Hyatt Place Columbus	3,173,490
Hyatt Place Indianapolis	3,864,949
Hyatt Place Kansas City	2,364,634
Hyatt Place Las Vegas	4,731,154
Hyatt Place Memphis	3,747,384
Hyatt Place Miami (Airport)	4,725,845
Hyatt Place Minneapolis	3,486,059
Hyatt Place Nashville Franklin Cool Springs	4,724,774
Hyatt Place Richmond	2,169,631
Hyatt Place Tampa Airport/Westshore	4,970,953
Residence Inn (North-I75) Tampa	2,545,318
Residence Inn Boise	3,010,936
Residence Inn Chattanooga	3,208,438
Residence Inn Ft Myers	2,835,855
Residence Inn Knoxville	3,389,941
Residence Inn Lexington	4,181,766
Residence Inn Los Angeles	9,533,183
Residence Inn Macon	1,166,308
Residence Inn Mobile	2,263,457
Residence Inn Portland	12,092,065
Residence Inn San Diego	6,683,389
Residence Inn Sarasota	3,318,908
Residence Inn Savannah	2,669,306
Residence Inn Tallahassee	2,879,321
Residence Inn Tampa (Sabal Park)	4,055,216
SpringHill Suites Austin	2,408,380
SpringHill Suites Grand Rapids	2,712,702
SpringHill Suites Houston	3,137,419

SpringHill Suites Lexington		4,335,962
SpringHill Suites San Antonio		1,345,627
SpringHill Suites San Diego		5,036,342
Total	$	347,298,021

SCHEDULE 1.1(b)

Mortgage Loan Documents

Except as defined above , all defined terms set forth in this Section 1.1(b) shall have the definitions contained in this Section 1.1(b) and in the Assumption and Release Agreement by and among W2007 Equity Inns Realty, LLC, a Delaware limited liability company (“LLC Original Borrower”), and W2007 Equity Inns Realty, L.P., a Delaware limited partnership (“LP Original Borrower”; LLC Original Borrower and LP Original Borrower are individually and collectively, as the context may require, referred to as “Original Borrower”), each with a mailing address at c/o Goldman Sachs & Co., 200 West Street, New York, New York 10282, ARC Hospitality Portfolio I Owner, LLC, a Delaware limited liability company (“LLC New Borrower”), ARC Hospitality Portfolio I BHGL Owner, LLC, a Delaware limited liability company (“BHGL New Borrower”), ARC Hospitality Portfolio I PXGL Owner, LLC, a Delaware limited liability company (“PXGL New Borrower”), ARC Hospitality Portfolio I GBGL Owner, LLC, a Delaware limited liability company (“GBGL New Borrower”), ARC Hospitality Portfolio I NFGL Owner, LLC, a Delaware limited liability company (“NFGL New Borrower”), ARC Hospitality Portfolio I MBGL 1000 Owner, LLC, a Delaware limited liability company (“MBGL 1000 New Borrower”), ARC Hospitality Portfolio I MBGL 950 Owner, LLC, a Delaware limited liability company (“MBGL 950 New Borrower”), ARC Hospitality Portfolio I NTC Owner, LP, a Delaware limited partnership (“LP New Borrower”), ARC Hospitality Portfolio I DLGL Owner, LP, a Delaware limited partnership (“DLGL New Borrower”), and ARC Hospitality Portfolio I SAGL Owner, LP, a Delaware limited partnership (“SAGL New Borrower”; LLC New Borrower, BHGL New Borrower, PXGL New Borrower, GBGL New Borrower, NFGL New Borrower, MBGL 1000 New Borrower, MBGL 950 New Borrower, LP New Borrower, DLGL New Borrower and SAGL New Borrower are individually and collectively, as the context may require, referred to as “New Borrower”), each with a mailing address at c/o American Realty Capital, 405 Park Avenue, New York, New York 10022, U.S. Bank National Association, as Trustee for the Registered Holders of EQTY 2014-INNS Mortgage Trust, Commercial Mortgage Pass-Through Certificates (“Lender”), with a mailing address at c/o Berkadia Commercial Mortgage LLC, 323 Norristown Road, Suite 300, Ambler, Pennsylvania 19002 (“Berkadia”), Whitehall Street Global Real Estate Limited Partnership 2007, a Delaware limited partnership (“Whitehall Street Global”), and Whitehall Parallel Global Real Estate Limited Partnership 2007, a Delaware limited partnership (“Whitehall Parallel Global”; Whitehall Street Global and Whitehall Parallel Global are individually and collectively, as the context may require, referred to as “Original Guarantor” and together with the Original Borrower, the “Original Indemnitors”), each with a mailing address at c/o Goldman Sachs & Co., 200 West Street, New York, New York 10282, and American Realty Capital Hospitality Operating Partnership, L.P., a Delaware limited partnership (“ARC OP”) and American Realty Capital Hospitality Trust, Inc., a Maryland corporation (“ARC REIT”; together with Whitehall Street Global and Whitehall Parallel Global, ARC OP and ARC REIT are individually and collectively, as the context may require, referred to as “New Guarantor” and together with the New Borrower, the “New Indemnitors”)

1. The Mortgage Loan Agreement, as defined in the Agreement above.

2. Promissory Note A-1, dated April 11, 2014 (together with all addenda, modifications, amendments, riders, exhibits and supplements thereto), in the original principal amount of $519,000,000.00;

3. Promissory Note A-2, dated April 11, 2014 (together with all addenda, modifications, amendments, riders, exhibits and supplements thereto), in the original principal amount of $346,000,000.00;

4. Collateral Assignment of Interest Rate Protection Agreement, dated as of April 11, 2014;

5. Indemnification Agreement, dated as of April 11, 2014;

6. Those certain UCC Financing Statements naming Original Borrower as debtor therein, and Original Lender as secured party therein, and filed with the appropriate recorder or clerk in which the Properties (as defined in the Loan Agreement) are located and in the records of the Secretary of State of Delaware;

7. Those certain documents identified on Schedule 1.1(b)-M attached hereto;

8. Environmental Indemnity Agreement executed by the Original Indemnitors in favor of Mortgage Lender;

9. Guaranty of Recourse Obligations, executed by Original Guarantor in favor of Mortgage Lender;

10. Payment Guaranty, executed and delivered by ARC REIT in favor of Mortgage Lender;

11. Cash Management Agreement, dated as of April 11, 2014, and that certain Addendum to Cash Management Agreement, dated as of April 11, 2014;

12. Contribution Agreement, dated as of April 11, 2014, executed by Original Borrower and Original Lender;

13. Pledge and Security Agreement (the “New KS Liquor Subsidiary Pledge”), executed and delivered by ARC Hospitality Portfolio I DEKS TRS, LLC, a Delaware limited liability company (“DEKS TRS”), for the benefit of Lender;

14. Liquor License Agreement (the “New KS Liquor License Agreement”), executed by ARC Hospitality Portfolio I KS TRS, LLC, a Kansas limited liability company (“KS Liquor Subsidiary”), DEKS TRS and LLC New Borrower for the benefit of Lender;

15. Pledge and Security Agreement (the “New TX Liquor Subsidiary Pledge” and together the New KS Liquor Subsidiary Pledge, the “New Liquor Subsidiary Pledge”), executed and delivered by ARC Hospitality Portfolio I TX Holdings, LLC, a Delaware limited liability company (“TX Liquor Holdco”), for the benefit of Lender;

16. Liquor License Agreement (the “New TX Liquor License Agreement” and together with the New KS Liquor License Agreement, the “New Liquor License Agreement”), executed by ARC Hospitality Portfolio I TX Beverage Company, LLC, a Delaware limited liability company (“TX Liquor Subsidiary”), ARC Hospitality Portfolio I NTC TRS, LP, a Delaware limited partnership (“NTC TRS”), and LP New Borrower for the benefit of Lender;

17. Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) executed by LLC New Borrower, LP New Borrower, DLGL New Borrower, SAGL New Borrower, ARC Hospitality Portfolio I TRS, LLC, a Delaware limited liability company (“TRS LLC”), DEKS TRS, NTC TRS, Lender, and American Realty Capital Hospitality Grace Portfolio, LLC, a Delaware limited liability company (“ARC Manager”), as operator, for the benefit of Lender (the “Crestline Operating Agreement Subordination”);

18. Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) executed by LLC Borrower, LP Borrower, DLGL Borrower, SAGL Borrower, Main TRS, DEKS TRS, NTC TRS, Mortgage Lender, American Realty Capital Hospitality Grace Portfolio, LLC, a Delaware limited liability company (“ARC Manager”), as operator, and Crestline Hotels & Resorts, LLC, a Delaware limited liability company (“Crestline”), as manager, for the benefit of Mortgage Lender (the “Crestline Management Agreement Subordination”);

19. Subordination of Management Agreement (TX – Alcohol Management and Services Agreement) executed by Crestline, as manager, for the benefit of Lender, and acknowledged by TX Liquor Subsidiary (the “Crestline TX Alcohol Management Agreement Subordination” and together with the Crestline Operating Agreement Subordination and the Crestline Management Agreement Subordination, the “Crestline Subordination”);

20. Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) executed by LLC New Borrower, ARC Hospitality Portfolio I MISC TRS, LLC, a Delaware limited liability company (“MISC TRS”), Lender, and ARC Manager, as operator, for the benefit of Lender (the “Pillar Operating Agreement Subordination”);

21. Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) executed by LLC Borrower, MISC TRS, Mortgage Lender, ARC Manager, as operator, and Pillar Hotels & Resorts, L.P. (“Pillar”), as manager, for the benefit of Mortgage Lender (the “Pillar Management Agreement Subordination” and together with the Pillar Operating Agreement Subordination, the “Pillar Subordination”)

22. Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) executed by LLC Borrower, MISC TRS, Mortgage Lender, and ARC Manager, as operator, for the benefit of Mortgage Lender (the “Musselman Operating Agreement Subordination”);

23. Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) executed by LLC Borrower, MISC TRS, Mortgage Lender, ARC Manager, as operator, and Musselman Hotels Management, L.L.C. (“Musselman”), as manager, for the benefit of Mortgage Lender (the “Musselman Management Agreement Subordination” and together with the Musselman Operating Agreement

Subordination, the “Musselman Subordination”);

24. Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) executed by LLC Borrower, GBGL New Borrower, BHGL New Borrower, LP Borrower, NFGL New Borrower, ARC Hospitality Portfolio I HIL TRS, LLC, a Delaware limited liability company (“HIL TRS”), ARC Hospitality Portfolio I NTC HIL TRS, LP, a Delaware limited partnership (“NTC HIL TRS”), Mortgage Lender, and ARC Manager, as operator, for the benefit of Mortgage Lender (the “Hilton-Hampton Operating Agreement Subordination”);

25. Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) executed by LLC Borrower, GBGL New Borrower, BHGL New Borrower, LP Borrower, NFGL New Borrower, HIL TRS, NTC HIL TRS, Mortgage Lender, ARC Manager, as operator, and Hampton Inns Management LLC, a Delaware limited liability company (“Hilton-Hampton”), as manager, for the benefit of Mortgage Lender (the “Hilton-Hampton Management Agreement Subordination” and together with the Hilton-Hampton Operating Agreement Subordination, the “Hilton-Hampton Subordination”);

26. Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) executed by LLC Borrower, PXGL New Borrower, LP Borrower, HIL TRS, LLC, NTC HIL TRS, Mortgage Lender, and ARC Manager, as operator, for the benefit of Mortgage Lender (the “Hilton-Homewood Operating Agreement Subordination”);

27. Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) executed by LLC Borrower, PXGL New Borrower, LP Borrower, HIL TRS, NTC HIL TRS, Mortgage Lender, ARC Manager, as operator, and Homewood Suites Management LLC, a Delaware limited liability company (“Hilton-Homewoood”), as manager, for the benefit of Mortgage Lender (the “Hilton-Homewood Management Agreement Subordination” and together with the Hilton-Homewood Operating Agreement Subordination, the “Hilton-Homewood Subordination”);

28. Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) executed by MBGL 1000 New Borrower, MBGL 950 New Borrower, LLC Borrower, LP Borrower, ARC Hospitality Portfolio I MCK TRS, LLC, a Delaware limited liability company (“MCK TRS”), NTC TRS, Mortgage Lender, and ARC Manager, as operator, for the benefit of Mortgage Lender (the “McKibbon Operating Agreement Subordination”);

29. Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) executed by MBGL 1000 New Borrower, MBGL 950 New Borrower, LLC Borrower, LP Borrower, MCK TRS, NTC TRS, Mortgage Lender, ARC Manager, as operator, and McKibbon Hotel Management, Inc. (“McKibbon”), as manager, for the benefit of Mortgage Lender (the “McKibbon Management Agreement Subordination”) and together with the McKibbon Operating Agreement Subordination, the “McKibbon Subordination”;

30. Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) executed by LLC Borrower, MISC TRS, Mortgage Lender, and ARC Manager, as operator, for the benefit of Mortgage Lender (the “Innventures Operating Agreement Subordination”);

31. Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) executed by LLC Borrower, MISC TRS, Mortgage Lender, ARC Manager, as operator, and InnVentures IVI, LP (“Innventures”), as manager, for the benefit of Mortgage Lender (the “Innventures Management Agreement Subordination” and together with the Innventures Operating Agreement Subordination, the “Innventures Subordination”);

32. Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) executed by LLC Borrower, MISC TRS, Mortgage Lender, and ARC Manager, as operator, for the benefit of Mortgage Lender (the “First Hospitality Operating Agreement Subordination”);

33. Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) executed by LLC Borrower, MISC TRS, Mortgage Lender, ARC Manager, as operator, and First Hospitality Group, Inc. (“First Hospitality” and together with ARC Manager, Crestline, Pillar, Musselman, Hilton-Hampton, Hilton-Homewood, McKibbon, and Innventures, the “Property Managing Entities”), as manager, for the benefit of Mortgage Lender (the “First Hospitality Management Agreement Subordination” and together with the First Hospitality Operating Agreement Subordination, the “First Hospitality Subordination”; the First Hospitality Subordination together with the Crestline Subordination, the Pillar Subordination, the Musselman Subordination, the Hilton-Hampton Subordination, the Hilton-Homewood Subordination, the McKibbon Subordination, and the Innventures Subordination, is referred to as the “Management Subordination”);

34. Clearing Account Agreement executed by TRS Holdco, Main TRS, DEKS TRS, NTC TRS, ARC Manager, Crestline, Mortgage Lender and Wells Fargo together with that certain Addendum A to Clearing Account Agreement executed by TRS Holdco, Main TRS, DEKS TRS, NTC TRS, LLC Borrower, LP Borrower, DLGL Borrower, SAGL Borrower, Mortgage Lender and Wells Fargo (collectively, the “Crestline Clearing Account Agreement”);

35. Clearing Account Agreement executed by TRS Holdco, MISC TRS, ARC Manager, Pillar, Mortgage Lender and Wells Fargo together with that certain Addendum A to Clearing Account Agreement executed by TRS Holdco, MISC TRS, LLC Borrower, Mortgage Lender and Wells Fargo (collectively, the “Pillar Clearing Account Agreement”);

36. Clearing Account Agreement executed by TRS Holdco, MISC TRS, ARC Manager, Musselman, Mortgage Lender and Wells Fargo together with that certain Addendum A to Clearing Account Agreement executed by TRS Holdco, MISC TRS, LLC Borrower, Mortgage Lender and Wells Fargo (collectively, the “Musselman Clearing Account Agreement”);

37. Clearing Account Agreement executed by TRS Holdco, HIL TRS, NTC HIL TRS, ARC Manager, Hilton-Hampton, Hilton-Homewood, Mortgage Lender and Wells Fargo together

with that certain Addendum A to Clearing Account Agreement executed by TRS Holdco, HIL TRS, NTC HIL TRS, LLC Borrower, BHGL New Borrower, PXGL New Borrower, GBGL New Borrower, NFGL New Borrower, LP Borrower, Mortgage Lender and Wells Fargo (collectively, the “Hilton Clearing Account Agreement”);

38. Clearing Account Agreement executed by TRS Holdco, MCK TRS, NTC TRS, ARC Manager, McKibbon, Mortgage Lender and Wells Fargo together with that certain Addendum A to Clearing Account Agreement executed by TRS Holdco, MCK TRS, NTC TRS, LLC Borrower, MBGL 1000 New Borrower, MBGL 950 New Borrower, LP Borrower, Mortgage Lender and Wells Fargo (collectively, the “MkKibbon Clearing Account Agreement”);

39. Clearing Account Agreement executed by TRS Holdco, MISC TRS, ARC Manager, Innventures, Mortgage Lender and Wells Fargo together with that certain Addendum A to Clearing Account Agreement executed by TRS Holdco, MISC TRS, LLC Borrower, Mortgage Lender and Wells Fargo (collectively, the “Innventures Clearing Account Agreement”);

40. Clearing Account Agreement executed by TRS Holdco, MISC TRS, ARC Manager, First Hospitality, Mortgage Lender and Wells Fargo together with that certain Addendum A to Clearing Account Agreement executed by TRS Holdco, MISC TRS, LLC Borrower, Mortgage Lender and Wells Fargo (collectively, the “First Hospitality Clearing Account Agreement”; the First Hospitality Clearing Account Agreement together with the Crestline Clearing Account Agreement, the Pillar Clearing Account Agreement, the Musselman Clearing Account Agreement, the Hilton Clearing Account Agreement, the McKibbon Clearing Account Agreement, and the Innventures Clearing Account Agreement, is referred to as the “New Clearing Account Agreements”);

41. Recognition Agreement (the “New Recognition Agreement”), executed by and between W2007 Equity Inns Senior Mezz, LLC, a Delaware limited liability company (“Qualified Preferred Equity Investor”), and Mortgage Lender;

42. Subordination Agreement executed by and among Main TRS, HIL TRS, MCK TRS, MISC TRS, DEKS TRS, NTC TRS, NTC HIL TRS (such entities referred to herein, individually and collectively, as “New Operating Lessee”), New Borrower and Mortgage Lender (the “Operating Lease Subordination”);

Schedule 1.1(b) - M

Hyatt Place Birmingham/Hoover, 2980 John Hawkins Parkway, Birmingham, AL 35244

a.           MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender. 

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Embassy Suites Orlando International Drive/Jamaican Court, 8250 Jamaican Court, Orlando, FL 32819

a.           AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hyatt Place Miami Airport - West/Doral, 3655 NW 82nd Avenue, Miami, FL 33166

a.           AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender. 

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hyatt Place Tampa Airport/Westshore, 4811 West Main Street, Tampa Airport/Westshore, FL 33607

a.           AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender. 

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Fairfield Inn & Suites Atlanta Vinings, 2450 Paces Ferry Road, Atlanta , GA 30339

a.           DEED TO SECURE DEBT, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability

company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED TO SECURE DEBT, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Homewood Suites by Hilton Chicago – Downtown, 40 East Grand Avenue, Chicago, IL 60611

a.           MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender. 

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hyatt Place Indianapolis/Keystone, 9104 Keystone Crossing, Indianapolis, IN 46240

a.           MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hyatt Place Baton Rouge/I-10, 6080 Bluebonnet Boulevard, Baton Rouge, LA 70809

a.           MULTIPLE INDEBTEDNESS MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender. 

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF MULTIPLE INDEBTEDNESS MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hyatt Place Baltimore/BWI Airport, 940 International Drive, Linthicum Heights, MD 21090

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hyatt Place Albuquerque/Uptown, 6901 Arvada North East, Albuquerque, NM 87110

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hyatt Place Cincinnati Blue Ash, 11435 Reed Hartman Highway, Blue Ash, OH 45241

a.           OPEN-END MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF OPEN-END MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hyatt Place Columbus/Worthington, 7490 Vantage Drive, Columbus, OH 43235

a.           OPEN-END MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF OPEN-END MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hyatt Place Memphis/Wolfchase Galleria, 7905 Giacosa Place, Memphis, TN 38133

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender. 

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hyatt Place Nashville/Franklin/Cool Springs, 650 Bakers Bridge Avenue, Franklin, TN 37067

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hyatt Place Richmond/Innsbrook, 4100 Cox Road, Glen Allen, VA 23060

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Courtyard Lexington South/Hamburg Place, 1951 Pleasant Ridge, Lexington, KY 40509

a.           MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender. 

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Courtyard Louisville Downtown, 100 South Second Street, Louisville, KY40202

a.           MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender. 

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Residence Inn Lexington South/Hamburg Place, 2688 Pink Pigeon Parkway, Lexington, KY 40509

a.           MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007

EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender. 

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

SpringHill Suites Lexington Near the University of Kentucky, 863 S. Broadway, Lexington, KY 40504

a.           MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender. 

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hyatt Place Kansas City/Overland Park/Metcalf, 6801 West 112th Street, Overland Park, KS 66211

a.           MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender. 

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS

REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Birmingham/Mountain Brook, 2731 US Highway 280, Birmingham, AL 35223

a.           LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender. 

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I BHGL OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Homewood Suites by Hilton Phoenix – Biltmore, 2001 East Highland Avenue, Phoenix, AZ 85016

a.           LEASEHOLD DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender. 

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF LEASEHOLD DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I PXGL OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn and Suites Colorado Springs Air Force Academy I-25 North, 7245 Commerce Center Drive, Colorado Springs, CO 80919

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, FIXTURE FILING AND FINANCING STATEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender. 

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, FIXTURE FILING AND FINANCING STATEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Homewood Suites by Hilton Hartford/Windsor Locks, 65 Ella Grasso Turnpike, Windsor Locks, CT 06096

a.           OPEN-END MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender. 

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF OPEN-END MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn & Suites Boynton Beach, 1475 West Gateway Boulevard, Boynton Beach, FL 33426

a.           AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender. 

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability

company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Boca Raton, 1455 Yamato Road, Boca Raton, FL 33431

a.           AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender. 

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Deerfield Beach, 660 West Hillsboro Boulevard, Deerfield Beach, FL 33441

a.           AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender. 

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS

OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Palm Beach Gardens, 4001 RCA Boulevard, Palm Beach Gardens, FL 33410

a.           AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender. 

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn West Palm Beach Florida Turnpike, 2025 Vista Parkway, West Palm Beach, FL 33411

a.           AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender. 

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Columbus – Airport, 5585 Whitesville Road, Columbus, GA 31904

a.           DEED TO SECURE DEBT, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to

GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender. 

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED TO SECURE DEBT, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Chicago/Gurnee, 5550 Grand Avenue, Gurnee, IL 60031

a.           MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender. 

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Kansas City/Overland Park, 10591 Metcalf Frontage Road, Overland Park, KS 66212

a.           MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender. 

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS

REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Baltimore/Glen Burnie, 6617 Ritchie Highway, Glen Burnie, MD 21061

a.           LEASEHOLD DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender. 

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF LEASEHOLD DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I GBGL OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Detroit/Madison Heights/South Troy, 32420 Stephenson Highway, Madison Heights, MI 48071

a.           MORTGAGE, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES AND RENTS, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF MORTGAGE, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

d.           ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES AND RENTS, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Detroit/Northville, 20600 Haggerty Road, Northville, MI 48167

a.           MORTGAGE, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES AND RENTS, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF MORTGAGE, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

d.           ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES AND RENTS, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Kansas City – Airport, 11212 North Newark Circle, Kansas City, MO 64153

a.           FUTURE ADVANCES DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF FUTURE ADVANCES DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn St. Louis/Westport, 2454 Old Dorsett Road, Maryland Heights, MO 63043

a.           FUTURE ADVANCES DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender. 

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF FUTURE ADVANCES DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Albany – Wolf Road (Airport), 10 Ulenski Drive, Albany, NY 12005

a.           MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Cleveland/Westlake, 29690 Detroit Road, Westlake, OH 44145

a.           OPEN-END MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF OPEN-END MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Columbus/Dublin, 3920 Tuller Road, Dublin, OH 43017

a.           OPEN-END MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF OPEN-END MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Scranton at Montage Mountain, 22 Montage Mountain Road, Scranton, PA 18507

a.           OPEN-END MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF OPEN-END MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn State College, 1101 East College Avenue, State College, PA 16801

a.           OPEN-END MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF OPEN-END MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES,

RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Charleston – Airport/Coliseum, 4701 Saul White Boulevard North, Charleston, SC 29418

a.           MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Columbia – I-26 Airport, 1094 Chris Drive, West Columbia, SC 29169

a.           MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Chattanooga-Airport/I-75, 7013 Shallowford Road, Chattanooga, TN 37421

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014,

from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Memphis-Poplar, 5320 Poplar Avenue, Memphis, TN 38119

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Pickwick Dam at Shiloh Falls, 90 Old South Road, Counce, TN 38326

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS

REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Homewood Suites by Hilton Memphis-Germantown, 7855 Wolf River Boulevard, Germantown, TN 38138

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Norfolk-Naval Base, 8501 Hampton Boulevard, Norfolk, VA 23505

a.           LEASEHOLD DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF LEASEHOLD DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I NFGL OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Beckley, 110 Harper Park Drive, Beckley, WV 25801

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to

GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Morgantown, 1053 Van Voorhis Road, Morgantown, WV 26505

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Courtyard Mobile, 1000 West I-65 Service Road, Mobile, AL 36609

a.           LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY

PORTFOLIO I MBGL 1000 OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Residence Inn Mobile, 950 West I-65 Service Road S., Mobile , AL 36609

a.           LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I MBGL 950 OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Courtyard Gainesville, 3700 SW 42nd Street, Gainesville, FL 32608

a.           AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Courtyard Orlando Altamonte Springs/Maitland, 1750 Pembrook Drive, Orlando, FL 32810

a.           AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability

company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Courtyard Sarasota Bradenton Airport, 850 University Parkway, Sarasota, FL 34234

a.           AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Courtyard Tallahassee North/I-10 Capital Circle, 1972 Raymond Diehl Road, Tallahassee, FL 32308

a.           AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF

ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Holiday Inn Express and Suites: Kendall East-Miami, 11520 SW 88th Street, Miami, FL 33176

a.           AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Residence Inn Fort Myers, 2960 Colonial Boulevard, Fort Myers, FL 33912

a.           AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Residence Inn Sarasota Bradenton, 1040 University Parkway, Sarasota, FL 34234

a.           AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Residence Inn Tallahassee North/I-10 Capital Circle, 1880 Raymond Diehl Road, Tallahassee, FL 32308

a.           AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Residence Inn Tampa Sabal Park/Brandon, 9719 Princess Palm Avenue, Tampa, FL 33619

a.           AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability

company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Residence Inn Tampa North/I-75 Fletcher, 13420 North Telecom Parkway, Tampa, FL 33637

a.           AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Courtyard Athens Downtown, 166 North Finley Street, Athens, GA 30601

a.           DEED TO SECURE DEBT, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED TO SECURE DEBT, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK

NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Residence Inn Macon, 3900 Sheraton Drive, Macon, GA 31210

a.           DEED TO SECURE DEBT, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED TO SECURE DEBT, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Residence Inn Savannah Midtown, 5710 White Bluff Road, Savannah, GA 31405

a.           DEED TO SECURE DEBT, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED TO SECURE DEBT, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Courtyard Knoxville Cedar Bluff, 216 Langley Place, Knoxville, TN 37922

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to

GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Residence Inn Chattanooga Downtown, 215 Chestnut Street, Chattanooga, TN 37402

a.           FEE AND LEASEHOLD DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF FEE AND LEASEHOLD DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Residence Inn Knoxville Cedar Bluff, 215 Langley Place at North Peters Road, Knoxville, TN 37922

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS

AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Courtyard Jacksonville Airport Northeast, 14668 Duval Road, Jacksonville, FL 32218

a.           AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Residence Inn Boise Downtown, 1401 Lusk Avenue, Boise, ID 83706

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Courtyard Chicago Elmhurst/Oakbrook Area, 370 North IL Route 83, Elmhurst, Il 60126

a.           MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007

EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Courtyard Bowling Green Convention Center, 1010 Wilkinson Trace, Bowling Green, KY 42104

a.           MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Boston/Peabody, 59 Newbury Street Route 1 North, Peabody, MA 01960

a.           MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS

TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Homewood Suites by Hilton Boston – Peabody, 57 Newbury Street, Boston, MA 01960

a.           MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Grand Rapids – North, 500 Center Drive, Grand Rapids, MI 49544

a.           MORTGAGE, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES AND RENTS, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF MORTGAGE, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

d.           ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES AND RENTS, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

SpringHill Suites Grand Rapids North, 450 Center Drive, Grand Rapids, MI 49544

a.           MORTGAGE, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES AND RENTS, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF MORTGAGE, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

d.           ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES AND RENTS, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hyatt Place Minneapolis Airport-South, 7800 International Drive, Bloomington, MN 55425

a.           MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hyatt Place Las Vegas, 4520 Paradise Road, Las Vegas, NV 89109

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL

ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Residence Inn Portland Downtown/Lloyd Center, 1710 NE Multnomah Street, Portland, OR 97232

a.           LINE OF CREDIT INSTRUMENT, DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND FINANCING STATEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF LINE OF CREDIT INSTRUMENT, DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND FINANCING STATEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Holiday Inn Charleston Mt. Pleasant, 250 Johnny Dodds Boulevard, Mount Pleasant, SC 29464

a.           MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn & Suites Nashville/Franklin (Cool Springs), 7141 South Springs Drive, Franklin, TN 37067

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to

GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT, AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I OWNER, LLC, a Delaware limited liability company, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Residence Inn Los Angeles LAX/El Segundo, 2135 East El Segundo Boulevard, El Segundo, CA 90245

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I NTC OWNER, LP, a Delaware limited partnership, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Residence Inn San Diego Rancho Bernardo, 12011 Scripps Highlands Drive, San Diego, CA 92131

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS

AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I NTC OWNER, LP, a Delaware limited partnership, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

SpringHill Suites San Diego Rancho Bernardo, 12032 Scripps Highlands Drive, San Diego, CA 92131

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I NTC OWNER, LP, a Delaware limited partnership, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Courtyard Dallas Medical/Market Center, 2150 Market Center Blvd., Dallas, TX 75207

a.           LEASEHOLD DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, L.P., a Delaware limited partnership, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, L.P., a Delaware limited partnership, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF LEASEHOLD DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, L.P., a Delaware limited partnership, ARC HOSPITALITY PORTFOLIO I DLGL OWNER, LP, a Delaware limited partnership, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Fairfield Inn & Suites Dallas Medical/Market Center, 2110 Market Center Boulevard at Stemmons, Dallas, TX 75207

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007

EQUITY INNS REALTY, L.P., a Delaware limited partnership, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, L.P., a Delaware limited partnership, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, L.P., a Delaware limited partnership, ARC HOSPITALITY PORTFOLIO I NTC OWNER, LP, a Delaware limited partnership, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hilton Garden Inn Austin/Round Rock, 2310 North IH35, Round Rock, TX 78681

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, L.P., a Delaware limited partnership, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, L.P., a Delaware limited partnership, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, L.P., a Delaware limited partnership, ARC HOSPITALITY PORTFOLIO I NTC OWNER, LP, a Delaware limited partnership, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

SpringHill Suites Austin Round Rock, 2960 Hoppe Trail, Round Rock, TX 78681

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, L.P., a Delaware limited partnership, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, L.P., a Delaware limited partnership, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, L.P., a Delaware limited partnership, ARC HOSPITALITY PORTFOLIO I NTC OWNER, LP, a Delaware limited partnership, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE

FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

SpringHill Suites Houston Hobby Airport, 7922 Mosley Road, Houston, TX 77061

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, L.P., a Delaware limited partnership, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, L.P., a Delaware limited partnership, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, L.P., a Delaware limited partnership, ARC HOSPITALITY PORTFOLIO I NTC OWNER, LP, a Delaware limited partnership, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

SpringHill Suites San Antonio Medical Center, 3636 NW Loop 410, San Antonio, TX 78201

a.           LEASEHOLD DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, L.P., a Delaware limited partnership, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, L.P., a Delaware limited partnership, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF LEASEHOLD DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, L.P., a Delaware limited partnership, ARC HOSPITALITY PORTFOLIO I SAGL OWNER, LP, a Delaware limited partnership, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Courtyard Asheville, One Buckstone Place, Asheville, NC 28805

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I NTC OWNER, LP, a Delaware limited partnership, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Charlotte/Gastonia, 1859 Remount Road, Gastonia, NC 28054

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I NTC OWNER, LP, a Delaware limited partnership, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Fayetteville I-95, 1922 Cedar Creek Road, Fayetteville, NC 28312

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, SECURITY AGREEMENT AND FIXTURE FILING AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company, ARC HOSPITALITY PORTFOLIO I NTC OWNER, LP, a Delaware limited partnership, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Hampton Inn Dallas – Addison, 4505 Beltway Drive, Addison, TX 75001

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, L.P., a Delaware limited partnership, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, L.P., a Delaware limited partnership, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, L.P., a Delaware limited partnership, ARC HOSPITALITY PORTFOLIO I NTC OWNER, LP, a Delaware limited partnership, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

Homewood Suites by Hilton San Antonio – Northwest, 4323 Spectrum One, San Antonio, TX 78230

a.           DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, L.P., a Delaware limited partnership, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

b.           ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of April 11, 2014, from W2007 EQUITY INNS REALTY, L.P., a Delaware limited partnership, to GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, as assigned to Lender.

c.           ASSIGNMENT AND ASSUMPTION OF DEED OF TRUST, ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUE, AND SECURITY AGREEMENT AND ASSIGNMENT AND ASSUMPTION OF ASSIGNMENT OF LEASES, RENTS AND HOTEL REVENUES, dated as of the date hereof, by and among W2007 EQUITY INNS REALTY, L.P., a Delaware limited partnership, ARC HOSPITALITY PORTFOLIO I NTC OWNER, LP, a Delaware limited partnership, and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF EQTY 2014-INNS MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES.

SCHEDULE 1.1(c)

First Mezzanine Loan Documents

Except as defined above, all defined terms set forth in this Section 1.1(b) shall have the definitions contained in this Section 1.1(b) and in the Assumption and Release Agreement (Mezzanine) dated February 27, 2015, by and among WNT Mezz I, LLC, a Delaware limited liability company, with a mailing address at c/o Goldman Sachs & Co., 200 West Street, New York, New York 10282 (“Original Borrower”), ARC Hospitality Portfolio I Mezz, LP, a Delaware limited partnership, with a mailing address at c/o American Realty Capital, 405 Park Avenue, New York, New York 10022 (“New Borrower”), U.S. Bank National Association, as Trustee for the Registered Holders of EQTY 2014-MZ Mezzanine Trust, Commercial Mezzanine Pass-Through Certificates (“Lender”), with a mailing address at c/o Berkadia Commercial Mortgage LLC, 323 Norristown Road, Suite 300, Ambler, Pennsylvania 19002 (“Berkadia”), Whitehall Street Global Real Estate Limited Partnership 2007, a Delaware limited partnership (“Whitehall Street Global”), and Whitehall Parallel Global Real Estate Limited Partnership 2007, a Delaware limited partnership (“Whitehall Parallel Global”; Whitehall Street Global and Whitehall Parallel Global are individually and collectively, as the context may require, referred to as “Original Guarantor” and together with the Original Borrower, the “Original Indemnitors”), each with a mailing address at c/o Goldman Sachs & Co., 200 West Street, New York, New York 10282, and American Realty Capital Hospitality Operating Partnership, L.P., a Delaware limited partnership (“ARC OP”) and American Realty Capital Hospitality Trust, Inc., a Maryland corporation (“ARC REIT”; together with Whitehall Street Global and Whitehall Parallel Global, ARC OP and ARC REIT are individually and collectively, as the context may require, referred to as “New Guarantor” and together with the New Borrower, the “New Indemnitors”), each with a mailing address at c/o American Realty Capital, 405 Park Avenue, New York, New York 10022.

1. First Mezzanine Loan Agreement as defined in the Agreement above.

2. German American Capital Corporation, a Maryland corporation (“Original Lender”), made a mezzanine loan in the original principal amount of $111,000,000.00 to Original Borrower, which Loan is evidenced by that certain (i) Mezzanine Promissory Note A-1, dated April 11, 2014 (together with all addenda, modifications, amendments, riders, exhibits and supplements thereto, the “A-1 Note”), from Original Borrower in the original principal amount of $66,600,000.00 (the “A-1 Loan”), and (ii) Mezzanine Promissory Note A-2, dated April 11, 2014 (together with all addenda, modifications, amendments, riders, exhibits and supplements thereto, the “A-2 Note” and together with the A-1 Note, the “Note”), from Original Borrower in the original principal amount of $44,400,000.00 (the “A-2 Loan” and together with the A-1 Loan, the “Loan”). Collateral Assignment of Interest Rate Protection Agreement (Mezzanine), by WNT Mezz I, LLC, a Delaware limited liability company, for the benefit of German American Capital Corporation, a Maryland corporation, dated as of April 11, 2014;

3. Indemnification Agreement, by WNT Mezz I, LLC, a Delaware limited liability company, for the benefit of German American Capital Corporation, a Maryland

corporation, dated as of April 11, 2014 (together with all addenda, modifications, amendments, riders, exhibits and supplements thereto, the “Indemnification Agreement”).

4. UCC Financing Statements naming New Borrower as debtor therein, and naming Lender, as secured party therein, to be filed in the records of the Secretary of State of Delaware

5. Environmental Indemnity Agreement (Mezzanine) from New Indemnitors in favor of First Mezzanine Lender (the “New Environmental Indemnity”);

6. Guaranty of Recourse Obligations (Mezzanine) (the “New Guaranty”), executed and delivered by each New Guarantor in favor of First Mezzanine Lender;

7. Subordination of Management Agreement (Mezzanine – Operating Agreement) executed by New Borrower, ARC Hospitality Portfolio I TRS, LLC, a Delaware limited liability company (“TRS LLC”), ARC Hospitality Portfolio I DEKS TRS, LLC, a Delaware limited liability company (“DEKS TRS”), ARC Hospitality Portfolio I NTC TRS, LP, a Delaware limited partnership (“NTC TRS”), First Mezzanine Lender, and American Realty Capital Hospitality Grace Portfolio, LLC, a Delaware limited liability company (“ARC Manager”), as operator, for the benefit of First Mezzanine Lender (the “Crestline Operating Agreement Subordination”);

8. Subordination of Management Agreement (Mezzanine – Management Agreement) executed by First Mezzanine Borrower, TRS LLC, DEKS LLC, NTC TRS, First Mezzanine Lender, ARC Manager, as operator, and Crestline Hotels & Resorts, LLC, a Delaware limited liability company (“Crestline”), as manager, for the benefit of First Mezzanine Lender (the “Crestline Management Agreement Subordination”);

9. Subordination of Management Agreement (Mezzanine) (Texas – Alcohol Management and Services Agreement) executed by Crestline, as manager, for the benefit of First Mezzanine Lender, and acknowledged by ARC Hospitality Portfolio I TX Beverage Company, LLC, a Delaware limited liability company (the “Crestline TX Alcohol Management Agreement Subordination”, and together with the Crestline Operating Agreement Subordination and the Crestline Management Agreement Subordination, the “Crestline Subordination”);

10. Subordination of Management Agreement (Mezzanine – Operating Agreement) executed by First Mezzanine Borrower, ARC Hospitality Portfolio I MISC TRS, LLC, a Delaware limited liability company (“MISC TRS”), First Mezzanine Lender, and ARC Manager, as operator, for the benefit of First Mezzanine Lender (the “Pillar Operating Agreement Subordination”);

11. Subordination of Management Agreement (Mezzanine – Management Agreement) executed by First Mezzanine Borrower, MISC TRS, LLC, First Mezzanine Lender, ARC Manager, as operator, and Pillar Hotels & Resorts, L.P. (“Pillar”), as manager, for the benefit of First Mezzanine Lender (the “Pillar Management Agreement Subordination” and together with the Pillar Operating Agreement Subordination, the “Pillar Subordination”);

12. Subordination of Management Agreement (Mezzanine – Operating Agreement) executed by First Mezzanine Borrower, MISC TRS, First Mezzanine Lender, and ARC Manager, as operator, for the benefit of First Mezzanine Lender (the “Musselman Operating Agreement Subordination”);

13. Subordination of Management Agreement (Mezzanine – Management Agreement) executed by First Mezzanine Borrower, MISC TRS, First Mezzanine Lender, ARC Manager, as operator, and Musselman Hotels Management, L.L.C. (“Musselman”), as manager, for the benefit of First Mezzanine Lender (the “Musselman Management Agreement Subordination” and together with the Musselman Operating Agreement Subordination, the “Musselman Subordination”);

14. Subordination of Management Agreement (Mezzanine – Operating Agreement) executed by First Mezzanine Borrower, ARC Hospitality Portfolio I HIL TRS, LLC, a Delaware limited liability company (“HIL TRS”), ARC Hospitality Portfolio I NTC HIL TRS, LP, a Delaware limited partnership (“NTC HIL TRS”), First Mezzanine Lender, and ARC Manager, as operator for the benefit of First Mezzanine Lender (the “Hilton-Hampton Operating Agreement Subordination”);

15. Subordination of Management Agreement (Mezzanine – Management Agreement) executed by First Mezzanine Borrower, HIL TRS, NTC HIL TRS, First Mezzanine Lender, ARC Manager, as operator, and Hampton Inns Management LLC, a Delaware limited liability company (“Hilton-Hampton”), as manager, for the benefit of First Mezzanine Lender (the “Hilton-Hampton Management Agreement Subordination” and together with the Hilton-Hampton Operating Agreement Subordination, the “Hilton-Hampton Subordination”);

16. Subordination of Management Agreement (Mezzanine – Operating Agreement) executed by First Mezzanine Borrower, HIL TRS, NTC HIL TRS, First Mezzanine Lender, and ARC Manager, as operator for the benefit of First Mezzanine Lender (the “Hilton-Homewood Operating Agreement Subordination”);

17. Subordination of Management Agreement (Mezzanine – Management Agreement) executed by First Mezzanine Borrower, HIL TRS, NTC HIL TRS, First Mezzanine Lender, ARC Manager, as operator, and Hampton Inns Management LLC, a Delaware limited liability company (“Hilton-Homewood”), as manager, for the benefit of First Mezzanine Lender (the “Hilton-Homewood Management Agreement Subordination” and together with the Hilton-Homewood Operating Agreement Subordination, the “Hilton-Homewood Subordination”);

18. Subordination of Management Agreements (Mezzanine – Operating Agreement) executed by First Mezzanine Borrower, ARC Hospitality Portfolio I MCK TRS, LLC, a Delaware limited liability company (“MCK TRS”), NTC TRS, First Mezzanine Lender, and ARC Manager, as operator, for the benefit of First Mezzanine Lender (the “McKibbon Operating Agreement Subordination”);

19. Subordination of Management Agreements (Mezzanine – Management Agreement) executed by First Mezzanine Borrower, MCK TRS, NTC TRS, First Mezzanine Lender, ARC Manager, as operator, and McKibbon Hotel Management, Inc. (“McKibbon”), as manager, for the benefit of First Mezzanine Lender (the “McKibbon Management Agreement Subordination” and together with the McKibbon Operating Agreement Subordination, the “McKibbon Subordination”);

20. Subordination of Management Agreements (Mezzanine – Operating Agreement) executed by First Mezzanine Borrower, MISC TRS, First Mezzanine Lender, and ARC Manager, as operator, for the benefit of First Mezzanine Lender (the “Innventures Operating Agreement Subordination”);

21. Subordination of Management Agreements (Mezzanine – Management Agreement) executed by First Mezzanine Borrower, MISC TRS, First Mezzanine Lender, ARC Manager, as operator, and InnVentures IVI, LP (“Innventures”), as manager, for the benefit of First Mezzanine Lender (the “Innventures Management Agreement Subordination” and together with the Innventures Operating Agreement Subordination, the “Innventures Subordination”);

22. Subordination of Management Agreements (Mezzanine – Operating Agreement) executed by First Mezzanine Borrower, MISC TRS, First Mezzanine Lender, ARC Manager, as operator, for the benefit of First Mezzanine Lender (the “First Hospitality Operating Agreement Subordination”);

23. Subordination of Management Agreements (Mezzanine – Management Agreement) executed by First Mezzanine Borrower, MISC TRS, First Mezzanine Lender, ARC Manager, as operator, and First Hospitality Group, Inc. (“First Hospitality” and together with ARC Manager, Crestline, Pillar, Musselman, Hilton-Hampton, Hilton-Homewood, McKibbon, and Innventures, the “Property Managing Entities”), as manager, for the benefit of First Mezzanine Lender (the “First Hospitality Management Agreement Subordination” and together with the First Hospitality Operating Agreement Subordination, the “First Hospitality Subordination” and, together with the Crestline Subordination, the Pillar Subordination, the Musselman Subordination, the Hilton-Hampton Subordination, the Hilton-Homewood Subordination, the McKibbon Subordination, and the Innventures Subordination, the “Management Subordination”);

24. Subordination Agreement executed by and among TRS LLC, HIL TRS, MCK TRS, MISC TRS, DEKS TRS, NTC TRS, NTC HIL TRS, First Mezzanine Borrower and First Mezzanine Lender (the “Operating Lease Subordinations”);

25. Recognition Agreement (Mezzanine) (the “Recognition Agreement”), executed by and between W2007 Equity Inns Senior Mezz, LLC, a Delaware limited liability company (“Qualified Preferred Equity Investor”), and First Mezzanine Lender;

26. First Mezzanine Assignment of Title Insurance Proceeds (Multi-State) executed by and between First Mezzanine Borrower, First Mezzanine Lender and such other parties as more particularly set forth therein (the “New Assignment of Title Insurance Proceeds”);

27. incumbency certificate of ARC REIT, ARC OP, First Mezzanine Borrower and each New Operating Lessee (as defined on Schedule I attached hereto) certifying as to the incumbency of each of ARC REIT, ARC OP, First Mezzanine Borrower and each New Operating Lessee, executed by an authorized officer of ARC REIT, for the benefit of First Mezzanine Lender;

28. incumbency certificates of Whitehall Street Global, Whitehall Parallel Global and Qualified Preferred Equity Investor executed by an authorized officer of WH Advisors, L.L.C. 2007, a Delaware limited liability company, as applicable, for the benefit of First Mezzanine Lender;

29. Pledge Agreement; and

30. Assumption and Release Agreement (Mezzanine).

SCHEDULE 5.15(a)

Special Purpose Covenants

1. With respect to each Subsidiary, such Subsidiary shall comply with the single purpose entity and bankruptcy remoteness requirements of the Senior Loan Documents, whether or not the applicable Senior Loan remains outstanding.

2. With respect to the Company:

(a)          The Company (i) has been, is, and will be organized solely for the purpose of acquiring, developing, owning, holding, financing, selling, leasing, transferring, exchanging, managing and operating such the Properties through the Subsidiaries, entering into this Agreement and the other Transaction Documents, and transacting lawful business that is incident, necessary and appropriate to accomplish the foregoing, and (ii) has not owned, does not own, and will not own any asset or property other than (A) its limited liability company and limited partnership interests in the Subsidiaries and (B) incidental personal property necessary for the ownership or operation of such limited liability company interests.

(b)          The Company has not engaged and will not engage in any business other than the ownership, management and operation of the Properties through the Subsidiaries and business incidental thereto.

(c)          The Company has not and will not enter into any Class B Member Affiliate Contract unless (i) such agreement or other arrangement is on arm’s-length commercially reasonable terms and (ii) such agreement or other arrangement is terminable by the Class A Member following the declaration of a Changeover Event without payment of any termination or similar fee.

(d)          The Company has not incurred and will not incur any Indebtedness other than its obligations under this Agreement and the other Transaction Documents.

(e)          Except as contemplated in this Agreement and the other Transaction Documents, the Company has not made and will not make any loans or advances to any third party (including the Class B Member, any Guarantor and/or any of their respective Affiliates), and has not and shall not acquire obligations or securities of its Affiliates.

(f)          The Company is and intends to remain solvent and the Company has, in all material respects, paid and will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets; provided that the foregoing shall not require any direct or indirect member, partner or shareholder of the Company to make any additional capital contributions to the Company; and provided further that it shall not be a breach of this subsection (f) to the extent that the Company does (or did) not pay such debts or liabilities because it does not have (or did not have) sufficient cash flow.

(g)          The Company has done or caused to be done, and will do, all things necessary to observe organizational formalities and preserve its existence, and the Company has not and will not, (i) terminate or fail other than to a de minimis and immaterial extent, to comply with the provisions of its Organizational Documents, or (ii) from and after the date hereof only, unless the Class A Member has consented, amend, modify or otherwise change its certificate of formation, operating agreement or other Organizational Documents.

(h)          The Company has, in all material respects, maintained and will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any other Person. The Company’s assets will not be listed as assets on the financial statement of any other Person, provided, however, that the Company’s assets may be included in a consolidated financial statement of its Affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Company and such Affiliates and to indicate that the Company’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person, and (ii) such assets shall be listed on the Company’s own separate balance sheet. The Company will file its own tax returns (to the extent the Company is required to file any such tax returns) and will not file a consolidated federal income tax return with any other Person (for the avoidance of doubt, the inclusion of the results of operations, income, profits, losses or other tax attributes of a Person that is a disregarded entity for federal or state income tax purposes in the federal or state income tax returns of the beneficial owner of such Person shall not constitute the filing of an income tax return by such Person), except to the extent that the Company is (i) required to file consolidated tax returns by law or (ii) is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law. The Company has maintained and shall maintain its books, records, resolutions and agreements in accordance with this Agreement.

(i)          The Company has been, will be, and at all times has held and will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of the Class B Member or any Guarantor), 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 department or part of the other and shall maintain and utilize separate stationery, invoices and checks bearing its own name.

(j)          The Company intends to 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; provided that nothing in this clause (j) shall be interpreted to require the partners, members or other principals of the Company to make any capital contributions or loans to such entity or arrange for any such capital contribution or loan by any third party.

(k)          None of the Company, any Affiliate Controlling the Company, the Class B Member, any Guarantor or any other Person holding any direct or Controlling indirect interest in the Company, has sought or intends to seek or effect the

liquidation, dissolution, winding up, consolidation or merger, in whole or in part, of the Company.

(l)          The Company has not and will not commingle the funds and other assets of the Company with those of any Affiliate, the Class B Member, any Guarantor or any other Person, and has held and will hold all of its assets in its own name.

(m)        The Company has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate, the Class B Member, any Guarantor or any other Person.

(n)         The Company has not and will not assume or guarantee or become obligated for the debts of any other Person and does not and will not hold itself out to be responsible for or have its credit available to satisfy the debts or obligations of any other Person.

(o)         The Company shall be a single purpose entity and shall have at all times (except for the limited and temporary circumstances described in Section 2.7 of this Agreement) at least one Special Member that has the rights and responsibilities described in this Agreement.

(p)         The Company has conducted and shall conduct its business so that the assumptions made with respect to the Company in any non-consolidation opinion delivered to the Class A Member in connection with its investment in the Company, or in any other non-consolidation opinion delivered subsequently to the Class A Member’s investment in the Company, shall be true and correct in all material respects. In connection with the foregoing, the Company hereby covenants and agrees that it will comply in all material respects with or cause the compliance in all material respects with, (i) all of the facts and assumptions (whether regarding the Company or any other Person) set forth in such non-consolidation opinion letter, (ii) all of the representations, warranties and covenants in this Schedule 5.15(a), and (iii) its Organizational Documents other than to a de minimis and immaterial extent.

(q)         Except as contemplated in this Agreement, the Company has not permitted and will not permit any Affiliate of the Class B Member or any Guarantor or any other Person holding any direct or indirect interest in the Company, independent access to its bank accounts.

(r)          Except as contemplated in this Agreement, the Company has, in all material respects, paid and shall pay its own liabilities and expenses, including the salaries of its own employees (if any) from its own funds; provided that the foregoing shall not require any direct or indirect member, partner or shareholder of the Company to make any additional capital contributions to the Company; provided further that it shall not be a breach of this subsection (r) to the extent that the Company does (or did) not pay such liabilities or expenses because it does not have (or did not have) sufficient cash flow.

(s)         Except as contemplated in this Agreement, the Company has compensated and shall compensate each of its consultants and agents from its own

funds for services provided to it and pay from its own assets all obligations of any kind incurred; provided that it shall not be a breach of this subsection (s) to the extent the Company does (or did) not compensate such consultants or agents or pay such obligations because it does not have (or did not have) sufficient cash flow.

(t)          The Company has not, and without the prior written consent of its Special Member, will not, (i) file a bankruptcy, insolvency or reorganization petition or otherwise institute insolvency proceedings or otherwise seek any relief under any laws relating to the relief from debts or the protection of debtors generally, (ii) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for such entity or for all or any portion of the Company’s properties, (iii) make any assignment for the benefit of the Company’s creditors, or (iv) take any action in furtherance of the foregoing.

(u)          Except as contemplated in this Agreement, the Company has, in all material respects, maintained and will maintain an arm’s-length relationship with its Affiliates; provided that the foregoing shall not require any direct or indirect member, partner or shareholder of the Company to make any additional capital contributions to the Company.

(v)          The Company has allocated and will allocate fairly and reasonably any overhead expenses that are shared with any Affiliate, including shared office space.

(w)         Except pursuant to the Transaction Documents, the Company has not pledged and will not pledge its assets for the benefit of any other Person.

(x)          The Company has and will have no obligation to indemnify its officers, directors, members or partners, as the case may be, or has such an obligation that is fully subordinated to the obligations owed to the Class A Member under this Agreement and the other Transaction Documents and will not constitute a claim against it if cash flow in excess of the amount required to pay the obligations owed to the Class A Member under this Agreement is insufficient to pay such indemnification obligation.

(y)         Except for the Guarantees, the Company has not, does not, and will not have any of its obligations guaranteed by any Affiliate.

(z)          The Company shall have one Special Member who will consider only the interests of the Company, including its creditors, in acting or otherwise voting on the matters for which its approval is required. Except as provided in the immediately preceding, the Special Member shall not have any fiduciary duties to any other Member or any other Person bound by this Agreement; provided, however, the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing. To the fullest extent permitted by law, including Section 18-1101(e) of the Act, the Special Member shall not be liable to the Company, any other Member or any other Person bound by this Agreement for breach of contract or breach of duties (including fiduciary duties), unless the Special Member acted in bad faith or engaged in willful misconduct.

3. With respect to the Class B Member, the Class B Member shall comply with each of the following:

(a)          The Class B Member (i) has been, is, and will be organized solely for the purpose of acquiring, owning, holding, selling, transferring, exchanging, managing and operating its limited liability company interests in the Company, entering into this Agreement and the other Transaction Documents, and transacting lawful business that is incident, necessary and appropriate to accomplish the foregoing, and (ii) has not owned, does not own, and will not own any asset or property other than (A) its limited liability company interests in the Subsidiaries and (B) incidental personal property necessary for the ownership or operation of such limited liability company interests.

(b)          The Class B Member has not engaged and will not engage in any business other than the ownership, management and operation of its limited liability company interests in the Company and business incidental thereto.

(c)          The Class B Member has not and will not enter into any contract or agreement with any Affiliate of the Class B Member, except upon terms and conditions that are intrinsically fair, commercially reasonable, and no less favorable to it than would be available on an arms-length basis with third parties other than any such party.

(d)          The Class B Member has not incurred and will not incur any Indebtedness other than its obligations under this Agreement and the other Transaction Documents.

(e)          Except as contemplated in this Agreement and the other Transaction Documents, the Class B Member has not made and will not make any loans or advances to any third party (including any Guarantor and/or any of their respective Affiliates), and has not and shall not acquire obligations or securities of its Affiliates.

(f)          The Class B Member is and intends to remain solvent and the Class B Member has, in all material respects, paid and will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets; provided that the foregoing shall not require any direct or indirect member, partner or shareholder of the Class B Member to make any additional capital contributions to the Class B Member; and provided further that it shall not be a breach of this subsection (f) to the extent that the Class B Member does (or did) not pay such debts or liabilities because it does not have (or did not have) sufficient cash flow.

(g)         The Class B Member has done or caused to be done, and will do, all things necessary to observe organizational formalities and preserve its existence, and the Class B Member has not and will not, (i) terminate or fail other than to a de minimis and immaterial extent, to comply with the provisions of its Organizational Documents, or (ii) from and after the date hereof only, unless the Class A Member has consented, amend, modify or otherwise change its certificate of formation, operating agreement or other Organizational Documents.

(h)          The Class B Member has, in all material respects, maintained and will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any other Person. The Class B Member’s assets will not be listed as assets on the financial statement of any other Person, provided, however, that the Class B Member’s assets may be included in a consolidated financial statement of its Affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Class B Member and such Affiliates and to indicate that the Class B Member’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person, and (ii) such assets shall be listed on the Class B Member’s own separate balance sheet. The Class B Member will file its own tax returns (to the extent the Class B Member is required to file any such tax returns) and will not file a consolidated federal income tax return with any other Person (for the avoidance of doubt, the inclusion of the results of operations, income, profits, losses or other tax attributes of a Person that is a disregarded entity for federal or state income tax purposes in the federal or state income tax returns of the beneficial owner of such Person shall not constitute the filing of an income tax return by such Person), except to the extent that the Class B Member is (i) required to file consolidated tax returns by law or (ii) is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law. The Class B Member has maintained and shall maintain its books, records, resolutions and agreements in accordance with this Agreement.

(i)          The Class B Member has been, will be, and at all times has held and will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of any Guarantor), 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 department or part of the other and shall maintain and utilize separate stationery, invoices and checks bearing its own name.

(j)          The Class B Member intends to 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; provided that nothing in this clause (j) shall be interpreted to require the partners, members or other principals of the Class B Member to make any capital contributions or loans to such entity or arrange for any such capital contribution or loan by any third party.

(k)          None of the Class B Member, any Affiliate Controlling the Class B Member, any Guarantor or any other Person holding any direct or Controlling indirect interest in the Class B Member, has sought or intends to seek or effect the liquidation, dissolution, winding up, consolidation or merger, in whole or in part, of the Class B Member.

(l)          The Class B Member has not and will not commingle the funds and other assets of the Class B Member with those of any Affiliate, any Guarantor or any other Person, and has held and will hold all of its assets in its own name.

(m)          The Class B Member has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate, any Guarantor or any other Person.

(n)          The Class B Member has not and will not assume or guarantee or become obligated for the debts of any other Person and does not and will not hold itself out to be responsible for or have its credit available to satisfy the debts or obligations of any other Person.

(o)          The Class B Member shall be a single purpose entity and its general partner shall have at all times at least one Special Member that has the rights and responsibilities described in this Agreement.

(p)          The Class B Member has conducted and shall conduct its business so that the assumptions made with respect to the Class B Member in any non-consolidation opinion delivered to the Class A Member in connection with its investment in the Company, or in any other non-consolidation opinion delivered subsequently to the Class A Member’s investment in the Company in any non-consolidation opinion delivered to the Class A Member in connection with its investment in the Company, or in any other non-consolidation opinion delivered subsequently to the Class A Member’s investment in the Company, shall be true and correct in all material respects. In connection with the foregoing, the Class B Member hereby covenants and agrees that it will comply in all material respects with or cause the compliance in all material respects with, (i) all of the facts and assumptions (whether regarding the Class B Member or any other Person) set forth in such non-consolidation opinion letter, (ii) all of the representations, warranties and covenants in this Schedule 5.15(a), and (iii) its Organizational Documents other than to a de minimis and immaterial extent.

(q)          Except as contemplated in this Agreement, the Class B Member has not permitted and will not permit any Affiliate, any Guarantor or any other Person holding any direct or indirect interest in the Class B Member, independent access to its bank accounts.

(r)           Except as contemplated in this Agreement, the Class B Member has, in all material respects, paid and shall pay its own liabilities and expenses, including the salaries of its own employees (if any) from its own funds; provided that the foregoing shall not require any direct or indirect member, partner or shareholder of the Class B Member to make any additional capital contributions to the Class B Member; provided further that it shall not be a breach of this subsection (r) to the extent that the Class B Member does (or did) not pay such liabilities or expenses because it does not have (or did not have) sufficient cash flow.

(s)          Except as contemplated in this Agreement, the Class B Member has compensated and shall compensate each of its consultants and agents from its own funds for services provided to it and pay from its own assets all obligations of any kind incurred; provided that it shall not be a breach of this subsection (s) to the extent the Class B Member does (or did) not compensate such consultants or agents or pay such obligations because it does not have (or did not have) sufficient cash flow.

(t)          The Class B Member has not, and without the prior written consent of the Special Member of its general partner, will not, (i) file a bankruptcy, insolvency or reorganization petition or otherwise institute insolvency proceedings or otherwise seek any relief under any laws relating to the relief from debts or the protection of debtors generally, (ii) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for such entity or for all or any portion of the Class B Member’s properties, (iii) make any assignment for the benefit of the Class B Member’s creditors, or (iv) take any action in furtherance of the foregoing.

(u)          Except as contemplated in this Agreement, the Class B Member has, in all material respects, maintained and will maintain an arm’s-length relationship with its Affiliates; provided that the foregoing shall not require any direct or indirect member, partner or shareholder of the Class B Member to make any additional capital contributions to the Class B Member.

(v)         The Class B Member has allocated and will allocate fairly and reasonably any overhead expenses that are shared with any Affiliate, including shared office space.

(w)         Except pursuant to the Transaction Documents, the Class B Member has not pledged and will not pledge its assets for the benefit of any other Person.

(x)          The Class B Member has and will have no obligation to indemnify its officers, directors, members or partners, as the case may be, or has such an obligation that is fully subordinated to the obligations owed to the Class A Member under this Agreement and the other Transaction Documents and will not constitute a claim against it if cash flow in excess of the amount required to pay the obligations owed to the Class A Member under this Agreement is insufficient to pay such indemnification obligation.

(y)          Except for the Guarantees, the Class B Member has not, does not, and will not have any of its obligations guaranteed by any Affiliate.

(z)          The general partner of the Class B Member shall have one Special Member who will consider only the interests of the Class B Member, including its creditors, in acting or otherwise voting on the matters for which its approval is required.

SCHEDULE 5.15(b)

Anti-Terrorism and Anti-Money Laundering Laws; Embargoed Persons

(a)           Compliance with Anti-Terrorism and Anti-Money Laundering Laws. (i) None of the Company, the Guarantors, the Subsidiaries, the Class B Member, their respective constituents, investors and Affiliates is in violation of any Legal Requirements relating to terrorism or money laundering, including Executive Order No. 13224 on Terrorist Financing (effective September 24, 2001 (the “Executive Order”) and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56, the “Patriot Act”).

(ii)           None of the Company, the Guarantors, the Subsidiaries, the Class B Member, their respective constituents, investors and Affiliates or other agents (if any), acting or benefiting in any capacity in connection with this Agreement or the transactions contemplated herein, is a “Prohibited Person” which is defined as:

(1) a Person or entity that is listed in the Annex to, or is otherwise subject to the provisions of the Executive Order;

(2) a Person or entity owned or Controlled by, or acting for or on behalf of any person or entity that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order;

(3) a Person or entity with whom Landlord is prohibited from dealing or otherwise engaging in any transaction by any terrorism or money laundering Legal Requirements, including the Executive Order and the Patriot Act;

(4) a Person or entity who commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order;

(5) a Person or entity that is named as a “specially designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website, http://www.treas.gove/ofac/t11sdn.pdf or at any replacement website or other replacement official publication of such list; and

(6) a Person or entity who is an Affiliate of a Person or entity listed above.

(iii)          None of the Company, the Guarantors, the Subsidiaries, the Class B Member, their respective constituents, investors and Affiliates, any of their respective brokers or other agents, if any, acting in any capacity in connection with this Agreement or the Properties is or knowingly will (i) conduct any business or engage in any transaction or dealing with any Prohibited Person, including the making or receiving of any contribution of funds, goods or services to or for the benefit of any Prohibited Person, (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order; or (iii) engage in or conspire to engage in any transaction that evades or avoids, or has the purposes of evading or avoiding, or

attempts to violate, any of the prohibitions set forth in the Executive Order or the Patriot Act.

(iv)        The Guarantors, the Subsidiaries and the Class B Member shall not knowingly use funds from any Prohibited Person to make any payment due to the Company hereunder, and the Company shall not knowingly use funds from any Prohibited Person to make any payment due to the Class A Member hereunder, provided that this provision shall not excuse the Company, the Guarantors, the Subsidiaries or the Class B Member from any of their payment obligations or allow any of them to defer the same.

(v)         The Company, the Guarantors, and the Class B Member covenant and agree to deliver to the Class A Member any certification or other evidence requested from time to time by the Class A Member in its reasonable discretion, confirming, to its Knowledge, the compliance with this section by the Company, the Guarantors, the Subsidiaries and the Class B Member.

(b)          Embargoed Person. To the Knowledge of the Company, the Guarantors, and the Class B Member, (a) none of the funds or other assets of the Company or any of its Subsidiaries constitute property of, or are beneficially owned, directly or indirectly, by any Embargoed Person (as defined below); (b) no Embargoed Person has any interest of any nature whatsoever in the Company or any of its Subsidiaries (whether directly or indirectly); and (c) none of the funds of the Class B Member have been derived from any unlawful activity with the result that the investment in Class B Member is prohibited by law. “Embargoed Person” means any person, entity or government subject to trade restrictions under U.S. law, including but not limited to, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations promulgated thereunder.

SCHEDULE 6.1

Initial Capital Contributions and Percentage Interests of the Members

Member	Initial Capital Contribution		Initial Percentage Interest
Class A Member	$	347,298,021		0	%
Class B Member	$	100		100	%
Special Member	$	0.00		0	%

EX-10.22

Exhibit 10.22

AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT

OF

ARC HOSPITALITY PORTFOLIO II HOLDCO, LLC

AMONG

AMERICAN REALTY CAPITAL HOSPITALITY PORTFOLIO MEMBER, LP,

W2007 Equity Inns PARTNERSHIP, L.P.,

W2007 EQUITY INNS TRUST

and

WILLIAM G. POPEO

Dated: February 27, 2015

IN RELIANCE UPON CERTAIN EXEMPTIONS FROM REGISTRATION AND QUALIFICATION, THE LIMITED LIABILITY COMPANY INTERESTS DESCRIBED IN AND ISSUED PURSUANT TO THIS AGREEMENT HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT (AS DEFINED HEREIN) OR THE SECURITIES LAWS OF ANY STATE OR THE DISTRICT OF COLUMBIA. ACCORDINGLY, NO SUCH LIMITED LIABILITY COMPANY INTEREST MAY BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT AND ANY APPLICABLE FEDERAL OR STATE SECURITIES LAWS. ANY VIOLATION OF SUCH PROVISIONS COULD EXPOSE THE SELLING MEMBER AND THE COMPANY TO LIABILITY.

INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. IN MAKING THE DECISION WHETHER TO BE A MEMBER IN THE COMPANY INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY AND THE TERMS OF THE LIMITED LIABILITY COMPANY INTERESTS.

TABLE OF CONTENTS

		Page
ARTICLE 1 DEFINITIONS		2
1.1	Definitions	2
1.2	Terms Generally	18
ARTICLE 2 THE COMPANY AND ITS BUSINESS		18
2.1	Members; Continuation of the Company	18
2.2	Company Name	19
2.3	Term	19
2.4	Filing of Amendments to the Certificate	19
2.5	Purpose	19
2.6	Principal Office; Registered Agent	19
2.7	Classes of Members	19
2.8	Names and Addresses of the Members	20
2.9	Authorized Persons	22
2.10	Representations by the Class B Member	22
2.11	Representations by the Class A Member	24
2.12	Certain Tax Matters	25
ARTICLE 3 MANAGEMENT OF COMPANY BUSINESS; POWERS AND DUTIES OF THE MEMBERS		27
3.1	Management of the Company Business	27
3.2	Appointment of Initial Managing Member	27
3.3	Class A Member’s Rights Following a Changeover Event	27
3.4	Buy/Sell Following a Changeover Event; Remedy Not Exclusive	30
3.5	The Class B Member’s Rights Following a Changeover Event	33
3.6	Significant Decisions	34
3.7	Class B Member Affiliate Contracts	36
3.8	Cooperation	36
3.9	The Class A Member’s Right to Cure Senior Loan Defaults	37
ARTICLE 4 RIGHTS AND DUTIES OF MEMBERS		37
4.1	Duties and Obligations of the Class B Member	37
4.2	Prohibition of Other Activities of the Class B Member	38
4.3	Limitation on Member Liability; Indemnification	38
4.4	Compensation of Members and their Affiliates	39
4.5	Use of Company Property	39
4.6	Tax Contests	39
4.7	Duty of the Class A Member	40
ARTICLE 5 BOOKS AND RECORDS; ANNUAL REPORTS; EXPENSES AND OTHER MATTERS		40
5.1	Books of Account	40
5.2	Availability of Books of Account	41
5.3	Annual Reports and Statements; Annual Budgets	41
5.4	Class A Member’s Expenses	41
5.5	Cash Management Account	42

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5.6	Plan Assets	42
5.7	Insurance	43
5.8	Casualty/Condemnation	43
5.9	Existence; Compliance with Legal Requirements	43
5.10	Impositions and Other Claims	43
5.11	Litigation	44
5.12	Access to Properties	44
5.13	Notice of Default	44
5.14	Intentionally Omitted	44
5.15	Conduct of Business	44
5.16	Standard of Operation	44
5.17	No Sales of Assets	45
5.18	Compliance with Senior Loans	45
5.19	Intentionally Omitted	45
5.20	Prohibited Persons	45
5.21	Forgiveness of Debt	45
ARTICLE 6 CAPITAL CONTRIBUTIONS,  LOANS AND LIABILITIES		45
6.1	Initial Capital Contributions of the Members	45
6.2	Protective Capital/Additional Capital	45
6.3	Application of Capital	46
6.4	Capital of the Company	47
ARTICLE 7 INTENTIONALLY OMITTED		47
ARTICLE 8 APPLICATIONS AND DISTRIBUTIONS OF AVAILABLE CASH; REDEMPTION		47
8.1	Distributions of Cash	47
8.2	Sales; Financings; Qualified Capital Raises	47
8.3	Redemption Right	48
8.4	Distribution of Capital Event Proceeds	48
8.5	Distribution After Changeover Event	49
ARTICLE 9 TRANSFER OF COMPANY INTERESTS		49
9.1	Restrictions on Transfers by the Class B Member	49
9.2	Transfers by the Class A Member	50
9.3	Assignment Binding on Company	51
9.4	Bankruptcy of a Member	51
9.5	Substituted Members	51
9.6	Acceptance of Prior Acts	51
9.7	Additional Limitations	52
9.8	Restraining Order; Specific Performance; Other Remedies	52

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ARTICLE 10 DISSOLUTION OF THE COMPANY; WINDING UP AND DISTRIBUTION OF ASSETS		52
10.1	Dissolution	52
10.2	Winding Up	53
10.3	Distribution of Assets	54
ARTICLE 11 AMENDMENTS		54
11.1	Amendments	54
11.2	Additional Members	55
ARTICLE 12 MISCELLANEOUS		55
12.1	Further Assurances	55
12.2	Notices	55
12.3	Remedies of the Class B Member	55
12.4	Exculpation	56
12.5	Headings and Captions	56
12.6	Variance of Pronouns	56
12.7	Counterparts	56
12.8	Governing Law	56
12.9	Consent to Jurisdiction	56
12.10	Arbitration	57
12.11	Partition	58
12.12	Invalidity	58
12.13	Successors and Assigns	58
12.14	Entire Agreement	58
12.15	Waivers	58
12.16	No Brokers	58
12.17	Press Releases	58
12.18	No Third Party Beneficiaries	58
12.19	Construction of Documents	59
12.20	Time of Essence	59

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SCHEDULES

Schedule A	Properties
Schedule 1.1(a)	Allocated Amounts
Schedule 1.1(b)	Mortgage Loan Documents
Schedule 5.15(a)	Special Purpose Covenants
Schedule 5.15(b)	Anti-Terrorism and Anti-Money Laundering Laws; Embargoed Persons
Schedule 6.1	Initial Capital Contributions and Percentage Interests of the Members

iv

Amended and Restated LIMITED LIABILITY COMPANY AGREEMENT
OF
ARC HOSPITALITY PORTFOLIO II HOLDCO, LLC

This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT, dated as of February 27, 2015, is made by and among AMERICAN REALTY CAPITAL HOSPITALITY PORTFOLIO MEMBER, LP, a Delaware limited partnership (together with its successors and permitted assigns each in such Person’s capacity as a member of the Company, the “Class B Member”), W2007 EQUITY INNS PARTNERSHIP, L.P., a Tennessee limited partnership, and W2007 EQUITY INNS TRUST, a Maryland trust (collectively, and together with their respective successors and permitted assigns each in such Person’s capacity as a member of the Company, the “Class A Member”), and WILLIAM G. POPEO, as the initial Special Member.

RECITALS

WHEREAS, the Company (as defined herein) was formed under the Act pursuant to a Certificate of Formation of the Company, which was filed with the Secretary of State of the State of Delaware on July 23, 2014, and that certain Limited Liability Company Agreement, dated as of November 7, 2014, by the Class B Member, as the sole member (the “Existing LLC Agreement”);

WHEREAS, the Company (i) is the ninety-nine percent (99%) limited partner of ARC Hospitality Portfolio II Mezz, LP, a Delaware limited partnership (the “Mezzanine LP”), and (ii) is the sole member of ARC Hospitality Portfolio II Mezz GP, LLC, a Delaware limited liability company (the “Mezzanine GP”), which in turn is the one percent (1%) general partner of Mezzanine LP;

WHEREAS, the Mezzanine LP is (i) the sole member of ARC Hospitality Portfolio II Owner, LLC, a Delaware limited liability company (“LLC Borrower”), (ii) the sole member of ARC Hospitality Portfolio II NTC Owner GP, LLC, a Delaware limited liability company (“Owner GP”), which in turn is the one percent (1%) general partner of ARC Hospitality Portfolio II NTC Owner, LP, a Delaware limited partnership (“LP Borrower”; LLC Borrower, and LP Borrower are individually and collectively, as the context may require, referred to as the “Pool 2 Owners”), (iii) the ninety-nine percent (99%) limited partner of LP Borrower, (iv) the sole member of ARC Hospitality Portfolio II TRS Holdco, LLC, a Delaware limited liability company (“TRS Holdco”), which in turn (a) is the sole member of ARC Hospitality Portfolio II TRS, LLC, a Delaware limited liability company (“Main TRS”), ARC Hospitality Portfolio II HIL TRS, LLC, a Delaware limited liability company (“HIL TRS”), and ARC Hospitality Portfolio II MISC TRS, LLC, a Delaware limited liability company (“MISC TRS”), and (b) the sole member of ARC Hospitality Portfolio II NTC TRS GP, LLC, a Delaware limited liability company (“TRS GP”), which is the one percent (1%) general partner of each of ARC Hospitality Portfolio II NTC TRS, LP, a Delaware limited partnership (“Main LP TRS”), and ARC Hospitality Portfolio II NTC HIL, LP, a Delaware limited partnership (“HIL LP TRS”, and together with Main TRS, HIL TRS and MISC TRS, the “TRS”), and (c) the ninety-nine percent (99%) limited partner of both Main LP TRS and HIL LP TRS;

WHEREAS, Mortgage Borrowers own the fee or ground leasehold (as applicable) interests in the Properties (as herein defined);

WHEREAS, TRS has operating leases for all of the Properties granted by Mortgage Borrowers (the “Operating Leases”); and

WHEREAS, pursuant to the terms of that certain Amended & Restated Real Estate Sale Agreement, dated as of November 11, 2014 (the “ Sale Agreement”), by and among the parties listed on Schedule 1A attached thereto, as the sellers (the “Sellers”), and the parties listed on Schedule 1B attached thereto, as the purchasers, the Mortgage Borrowers acquired the Properties and the Company is issuing the Interest (as herein defined) described herein to the Class A Member (on behalf of its wholly-owned subsidiaries, who were the sellers under the Sale Agreement) in partial consideration for such sale.

NOW, THEREFORE, in order to carry out the intentions expressed above and in consideration of the mutual agreements hereinafter contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Class B Member hereby agrees to admit the Class A Member and the Special Member as members of the Company upon the terms contained herein and each of the Class A Member, the Class B Member and the Special Member hereby agree to amend and restate the Existing LLC Agreement to read in its entirety as follows:

ARTICLE 1

DEFINITIONS

1.1           Definitions. As used in this Agreement, the following terms shall have the meanings set forth below, which meanings shall be applicable equally to the singular and plural of the terms defined:

“Accrual Period” means the period from and including a Scheduled Distribution Date to but excluding the next Scheduled Distribution Date, except that the first Accrual Period shall be the period from and including the Effective Date to but excluding the first Scheduled Distribution Date thereafter.

“Act” means the Delaware Limited Liability Company Act (6 Del. C. § 18-101 et seq.), as amended from time to time.

“Additional Class B Member Deposit” has the meaning set forth in Section 3.4(h).

“Additional Mezzanine Lender” means, with respect to any Additional Mezzanine Loan, the holder(s), from time to time, of such Additional Mezzanine Loan.

“Additional Mezzanine Loan” means any additional mezzanine loan incurred by a Subsidiary of the Company as an “Approved Mezzanine Loan” in accordance with the terms of the Mortgage Loan Agreement.

2

“Additional Mezzanine Loan Agreement” means, with respect to each Additional Mezzanine Loan, the mezzanine loan agreement evidencing such Additional Mezzanine Loan, as the same may be amended, supplemented or modified from time to time.

“Additional Mezzanine Loan Documents” means, with respect to each Additional Mezzanine Loan, the Additional Mezzanine Loan Agreement evidencing such Additional Mezzanine Loan, the notes, pledges, environmental indemnities, guarantees and all other agreements, instruments or documents relating to, evidencing or securing such Additional Mezzanine Loan, as any of the foregoing may be amended, supplemented or modified from time to time.

“Additional Mezzanine Loan Obligations” means the indebtedness evidenced, secured or otherwise governed by the Additional Mezzanine Loan Documents.

“Affiliate” means with respect to any Person (i) any other Person that directly or indirectly through one or more intermediaries Controls or is Controlled by or is under common Control with such Person and (ii) any other Person owning or controlling twenty-five percent (25%) or more of the outstanding voting securities of, or other ownership interests in, such Person; provided that, notwithstanding the foregoing, each of the following entities shall be deemed an Affiliate of each of the Class B Member and the Guarantors: AR Capital, LLC, American Realty Capital IX, LLC, American Realty Capital Hospitality Special Limited Partner, LLC, American Realty Capital Hospitality Advisors, LLC, American Realty Capital Hospitality Properties, LLC, Realty Capital Securities, LLC, ARC OP (as defined below), Crestline Hotels & Resorts, LLC, REIT (as defined below) and each of their respective Affiliates.

“Agreement” means this Amended and Restated Limited Liability Company Agreement of the Company, together with the Schedules attached hereto, as it may hereafter be amended, supplemented or otherwise modified from time to time.

“Allocated Amount” means, with respect to a Property, an amount equal to the portion of the total of the Class A Member’s Initial Capital Contributions allocated to such Property, as set forth on Schedule 1.1(a), which amount shall be increased from time to time in order to reflect any additional Capital Contributions made by the Class A Member with respect to such Property.

“Annual Budget” means the annual budget for the Company and its Subsidiaries (which shall include both an operating budget and a capital expenditure budget) and each of the Properties, on an aggregate and individual Property basis, which annual budget shall set forth, on a month-by-month basis, in reasonable detail, each line item of operating income, operating expenses and capital expenses for the applicable Budget Year.

“ARC OP” means American Realty Capital Hospitality Operating Partnership, L.P., a Delaware limited partnership.

“Assignee” means any Person to whom a limited liability company interest in the Company has been Transferred in a Transfer expressly permitted hereunder and who has not been admitted as a Substituted Member.

“Available Cash” means for any period, the excess, if any, of (A) the sum of (i) the amount of all cash receipts during such period of the Company and any Subsidiary thereof,

3

without duplication (to the extent, in the case of amounts received by a Subsidiary, such cash is permitted by the Senior Loan Documents to be distributed by such Subsidiary to the Company after payment of all expenses of such Subsidiary incurred by such Subsidiary to the extent such expenses are not prohibited by this Agreement or the Senior Loan Documents (collectively the “Permitted Subsidiary Expenses”)) and (ii) any working capital of the Company existing at the start of such period less (B) the sum of (i) all cash amounts payable in such period on account of expenses incurred directly by the Company in accordance with and as permitted by this Agreement (but specifically excluding sums payable to the Class B Member or any Affiliate thereof (except for the Permitted Subsidiary Expenses) unless approved by the Class A Member or permitted hereunder), and (ii) reserves of amounts required for the working capital, capital expenditures and future needs of the Company and its Subsidiaries, including, without limitation, current and future property improvement plans and other franchisor requirements, as established by the Class B Member in its reasonable determination.

“Bad Boy Guaranty” means that certain Bad Boy Guaranty, dated as of the date hereof, made by the Guarantors in favor of the Class A Member.

“Bankruptcy” means, with respect to the affected party, (i) the entry of an order for relief under the Bankruptcy Code, (ii) the admission by such party in writing of its inability to pay its debts as they mature, (iii) the making by it of an assignment for the benefit of creditors, (iv) the filing by it of a petition in bankruptcy or a petition for relief under the Bankruptcy Code or any other applicable federal or state bankruptcy or insolvency statute or any similar law, (v) the application by such party for the appointment of a receiver for the assets of such party, (vi) the filing of an involuntary petition seeking liquidation, reorganization, arrangement or readjustment of its debts or any other similar relief under the Bankruptcy Code or any other federal or state insolvency law that is not discharged, stayed or dismissed within sixty (60) days or (vii) the imposition of a judicial or statutory lien on all or a substantial part of its assets that is not discharged, stayed or dismissed within sixty (60) days. With respect to a Member, the foregoing definition of “Bankruptcy” is intended to replace and shall supersede and replace the definition of “Bankruptcy” set forth in Sections 18-101(1) and 18-304 of the Act.

“Bankruptcy Code” means Title 11 of the United States Code, as amended.

“Barcelo Note” shall mean those certain Promissory Notes in the aggregate original principal amount of $63,074,056.52, dated March 21, 2014, from ARC OP to Barcelo Crestline Corporation.

“Budget Year” means, with respect to the Fiscal Year 2015 or any Fiscal Year thereafter, the period beginning on January 1 and ending on December 31 of such year.

“Business Day” means any day other than a Saturday, a Sunday or a legal holiday on which national banks are not open for general business in the State of New York.

“Buy/Sell Response Notice” has the meaning set forth in Section 3.4.

“Capital Contribution” when used with respect to any Member means the aggregate amount of capital contributed (including any amounts deemed contributed) to the Company by such Member in accordance with Article 6.

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“Capital Event” means:  (i) any sale, transfer or other disposition or liquidation of the Properties or any portion thereof, or any direct or indirect interest therein owned by the Company or any Subsidiary or any portion thereof (including, in each case, a foreclosure sale or deed-in-lieu thereof); (ii) any Casualty; (iii) any Condemnation; or (iv) any refinancing of all or any of the Properties or any direct or indirect interest therein owned by the Company or any Subsidiary or all of any of the Senior Loans.

“Capital Event Proceeds” means Net Sales Proceeds, Net Disposition Proceeds and Net Financing Proceeds, collectively.

“Cash Management Account” has the meaning set forth in Section 5.5.

“Cash Management Agreement” means that certain Deposit Account Control Agreement, dated as of the date hereof, among Wells Fargo Bank, National Association, the Company, the Class A Member and the Class B Member, as the same may be amended, supplemented or otherwise modified from time to time with the approval of the Class A Member.

“Cash Management Bank” has the meaning set forth in Section 5.5.

“Casualty” means, with respect to any Property, any fire, explosion, flood, collapse or other casualty affecting all or any portion of such Property.

“Certificate” means the Certificate of Formation of the Company filed with the Secretary of State of the State of Delaware on July 23, 2014, as the same may hereafter be amended and/or restated from time to time.

“Changeover Event” means the occurrence of any of the following events:

(1)         any failure (regardless of the availability of funds) of the Company to distribute on any Scheduled Distribution Date the full Class A Return for the Accrual Period ending on that Scheduled Distribution Date, it being understood that if such a failure occurs, the Class A Return Rate used to calculate any amounts then owing to the Class A Member or that become due to the Class A Member at any time following such failure will be the Increased Rate, with the Increased Return resulting from such failure accruing interest at the Increased Rate until paid and such additional interest being due on the next Scheduled Distribution Date; provided, however, that with respect to each of the first two times that the Company fails to pay the Class A Return in full on a Scheduled Distribution Date only, such failure to pay shall not constitute a Changeover Event hereunder if the Company pays such amount in full (together with interest thereon at the Increased Rate) to the Class A Member within five (5) Business Days following the Class A Member’s delivery of written notice to the Class B Member of such failure to pay;

(2)         any failure of the Class B Member to contribute any Protective Capital to the Company or to reimburse the Class A Member for contributions of Protective Capital made by the Class A Member, in either case within the time set forth in, and otherwise in accordance with Section 6.2 hereof; provided that such failure of the Class B Member to contribute Protective Capital pursuant to Section 6.2(a) hereof shall not constitute a Changeover Event unless either (A) such failure is not remedied by the Class B Member within sixty (60) days after the Class A Member’s written notice to the Class B Member

5

of such failure or (B) if the Class A Member funds any Protective Capital pursuant to Section 6.2(a) hereof, then the Class B Member shall have a period of sixty (60) days following the funding of such Protective Capital to cure such default by reimbursing the full amount of such Protective Capital (together with a return thereon at the Increased Rate) to the Class A Member;

(3)         the failure (regardless of the availability of funds) of the Company or the Class B Member (a) to redeem or cause to be redeemed the Class A Member’s Interest in full, and to pay in full the Redemption Price, on or before the Mandatory Redemption Date or (b) to pay to the Class A Member in full the Release Payment for any Property upon the sale or other disposition of any Property (or any direct or indirect interest therein owned by any of the Company or its Subsidiaries) or (c) to pay to the Class A Member in full the QCR Redemption Amount in respect of any Qualified Capital Raise in accordance with the provisions hereof or (d) to pay to the Class A Member all of the Net Financing Proceeds from the incurrence of any Additional Mezzanine Loan by the Company or any of its Subsidiaries upon such incurrence or (e) to pay to the Class A Member all of the Capital Event Proceeds from any other Capital Event affecting any Property ((but, in the event such Capital Event only affects certain Properties (as opposed to all Properties), only in an amount up to the Release Payment for such Property)) upon the occurrence of such Capital Event;

(4)         the failure (regardless of the availability of funds) of the Company or the Class B Member to pay the Class A Member any amounts not described in clause (1), (2) or (3) above when due and payable hereunder unless such payment is made within ten (10) Business Days after notice from the Class A Member that such payment is delinquent, provided, however, that interest at the Increased Rate will accrue on any such amounts not paid when due, irrespective of the amount owed, from the day first due until paid in full;

(5)         if the Company or any Subsidiary takes any action that constitutes a breach of Section 3.1(b);

(6)         if the Company fails to comply with any of the covenants in any of Sections 5.5(a), 5.6, 5.10 (unless caused by the Senior Lender’s failure to pay taxes or insurance premiums despite there being sufficient amounts in the reserves held by the Senior Lender for such purposes), 5.15(a), 5.17 or Schedule 5.15(a) hereof, or fails to maintain the insurance required by Section 5.7; provided, however, that with respect to a violation or breach of any of the covenants set forth in Section 5.15(a) or Schedule 5.15(a), such violation or breach shall not constitute a Changeover Event in the event that (1) such violation or breach is not intentional, (2) such violation or breach is immaterial, (3) such violation or breach shall be remedied in a timely and expedient manner and in any event within not more than sixty (60) days, and (4) within fifteen (15) Business Days following the request of the Class A Member, but not prior to the date on which such violation or breach shall have been remedied in accordance with the immediately foregoing clause (3), the Company delivers to the Class A Member (I) a new non-consolidation opinion or (II) a modification of a non-consolidation opinion that was previously delivered to the Class A Member to the effect that such breach or violation shall not in any way impair, negate or adversely change the opinions rendered in such opinion, which opinion or opinion modification and any counsel delivering such opinion

6

or opinion modification shall be acceptable to the Class A Member in its reasonable discretion;

(7)         any Prohibited Transfer occurs or if the Class B Member ceases to be Controlled, directly or indirectly, by ARC OP, or if ARC OP ceases to be Controlled, directly or indirectly by the REIT, or if the REIT ceases to be Controlled, directly or indirectly, by AR Capital, LLC;

(8)         if, as of the third (3rd) anniversary of the Effective Date, the Company has failed to make payments to the Class A Member in respect of its Unrecovered Capital in an amount equal to or greater than fifty percent (50%) of the Initial Capital Contributions made by the Class A Member;

(9)         if, as of the fourth (4th) anniversary of the Effective Date, the Company has failed to make payments to the Class A Member in respect of its Unrecovered Capital in an amount equal to or greater than one hundred percent (100%) of the Initial Capital Contributions made by the Class A Member;

(10)        any representation or warranty made by the Class B Member in Section 2.10 of this Agreement or any other representation made by the Class B Member or by any Guarantor in any other Transaction Document shall be untrue, incorrect or misleading in any material respect on or as of the date made; provided, however, that as to any such untrue, incorrect or misleading representation or warranty which (a) was unintentionally made to the Class A Member and (b) which can be made true and correct by action of the Class B Member, the Class B Member shall have a period of thirty (30) days following written notice thereof to the Class B Member to undertake and complete all action necessary to make such representation or warranty, true and correct in all material respects; provided, further, that if the same cannot be cured within such thirty (30) day period, if the Class B Member commences to take action to cure such breach within such thirty (30) day period and thereafter diligently and expeditiously proceeds to cure the same, the Class B Member shall have such additional time as is reasonably necessary to effect such cure, but in no event in excess of an additional ninety (90) days;

(11)        the occurrence of any default in any material respect or of any material nature by the Class B Member, any Guarantor or any Affiliate of any of them in the performance of any obligation under any of the Transaction Documents (other than any default described elsewhere in this definition of “Changeover Event”), if such default shall continue for thirty (30) days after notice of such default; provided, however, that if such default is a default which cannot be cured by the payment of a sum of money and is otherwise susceptible of cure but cannot reasonably be cured within such 30-day period, and provided further that the Class B Member shall have commenced to cure such default within such 30-day period and shall thereafter diligently and expeditiously proceed to cure the same, such 30-day period shall be extended for such time as is reasonably necessary for the Class B Member in the exercise of due diligence to cure such default, such additional period not to exceed ninety (90) days;

(12)        the occurrence of any “event of default” (i.e., after applicable grace and cure periods, if any) arising pursuant to any of the Senior Loan Documents or pursuant to any loan document evidencing or relating to any subsequent financing entered into by the

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Company or any of its Subsidiaries, or the failure to pay the Senior Loans or any such subsequent financing at the stated or accelerated maturity of the Senior Loans or such subsequent financing (whether such accelerated maturity occurs by declaration of the lender or otherwise);

(13)        if (a) the Company, the Class B Member, any Guarantor or any Subsidiary commences any action or proceeding for the purpose of asserting or alleging that any provision of this Agreement or any other Transaction Document is not enforceable by the Class A Member in accordance with its terms, or (b) it is determined by any court or other tribunal or governmental authority that any provision of this Agreement or any Transaction Document is not in full force and effect or valid or enforceable by the Class A Member in accordance with its terms to the extent that such provision relates to the Class A Member’s right to receive amounts otherwise payable or due hereunder (other than to the extent such determination is that such amounts are usurious under applicable law), the priority of any such amounts and/or the right of the Class A Member to exercise any of its rights or remedies hereunder; provided, however, that this clause (b) shall not be applicable to the extent that such determination is made solely due to the Class A Member’s failure, as of the Effective Date, to obtain any governmental order, consent, approval or authorization (or failure, as of the Effective Date, to make any registration or other filing with any governmental authority) in connection with its receipt of its Interest on the date hereof;

(14)        if the Class B Member or any Guarantor shall, or shall cause or permit the Company or any of its Subsidiaries to, make an assignment for the benefit of creditors or admit, in any legal proceeding, its inability to pay its debts as they become due or generally not be paying its debts as they become due;

(15)        if any receiver, liquidator or trustee shall be appointed for the Class B Member, any Guarantor, the Company or any Subsidiary, or if a Bankruptcy occurs with respect to any such Person, or if any proceeding shall be instituted for the dissolution or liquidation of any such Person or its assets;

(16)        intentionally omitted;

(17)        a final, non-appealable, uninsured judgment for the payment of money in excess of $5,000,000 shall be rendered against the Company by a court of competent jurisdiction and is not satisfied in full within ten (10) days;

(18)        the occurrence of a Liability Indemnification Event under a Guaranty that remains unpaid for ten (10) Business Days after written notice thereof, provided that interest at the Increased Rate will accrue on any such amounts not paid when due, irrespective of the amount owed, from the day first due until paid in full;

(19)        the occurrence of any “event of default” (i.e., after applicable grace and cure periods, if any) arising pursuant to any ground lease to which the Company or any Subsidiary is a party to the extent such event of default could reasonably be expected to have a Material Adverse Effect;

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(20)        the occurrence of any “event of default” (i.e., after applicable grace and cure periods, if any) arising pursuant to any franchise agreement to which the Company or any Subsidiary is a party to the extent such event of default could reasonably be expected to have a Material Adverse Effect, if such default shall continue for sixty (60) days after notice of such default or, if (x) such default is not reasonably susceptible of being cured within such 60-day period, (y) the Company is diligently and continuously attempting to cure such breach and (z) such breach does not cause any imminent danger to one or more of the Properties or of termination of such franchise agreement by the franchisor as a result of the continuation of such default without cure thereof, such longer period as is reasonably necessary to cure such default using diligent efforts, provided that such cure period in the aggregate shall not exceed one hundred eighty (180) days;

(21)        if the Class B Member, any Guarantor or any of their respective Affiliates misappropriates the funds of the Company or any Subsidiary or the funds of any Affiliate of the Company or otherwise commits a fraudulent act in connection with the business of the Company or any Subsidiary or the business of any Affiliate of the Company, or if the Class B Member, any Guarantor or any of their respective Affiliates is convicted of a felony (whether or not such felony is related to the Company or any Subsidiary) or commits an act of dishonesty, willful misconduct or gross negligence, or breaches a fiduciary duty, in connection with the Company or any Subsidiary or in connection with its activities as a Member (if applicable) or the performance of its duties hereunder or under any Transaction Documents; and/or

(22)        if any of the assumptions contained in any non-consolidation opinion delivered to the Class A Member in connection with its investment in the Company, or in any other non-consolidation opinion delivered subsequently to the Class A Member’s investment in the Company, is or becomes untrue in any material respect.

“Class A Interest Sale Price” has the meaning set forth in Section 3.4.

“Class A Member” has the meaning set forth in the Preamble. With respect to any matter which requires the consent or approval of the Class A Member hereunder or under the other Transaction Documents, W2007 Equity Inns Partnership, L.P. shall have the sole and exclusive power and authority to vote on behalf of and to bind all Persons constituting the Class A Member with respect to such matter.

“Class A Member Deposit” has the meaning set forth in Section 3.4(d).

“Class A Member Protective Advance” has the meaning set forth in Section 6.2.

“Class A Return” means, with respect to any Accrual Period, an amount equal to the product of (i) the weighted average outstanding Unrecovered Capital of the Class A Member during such period multiplied by (ii) the Class A Return Rate for such Accrual Period, multiplied by (iii) a fraction the numerator of which is the number of days in such Accrual Period and the denominator of which is 365.

“Class A Return Rate” means, (i) with respect the first eighteen (18) months following the Effective Date, a rate equal to 7.50% per annum, and (ii) thereafter, a rate equal to 8.00% per annum; provided, however, that (i) if any Changeover Event has occurred, the Class A Return

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Rate applicable in calculating any Class A Return shall automatically (without any action required by the Class A Member) increase to the Increased Rate and (ii) the rate that will accrue on any Protective Capital funded by the Class A Member shall be the Increased Rate.

“Class B Interest Sale Price” has the meaning set forth in Section 3.4.

“Class B Member” has the meaning set forth in the Preamble.

“Class B Member Affiliate Contract” means any contract or other agreement between or among the Company and/or any Subsidiary, on the one hand, and the Class B Member, any Guarantor or any of their respective Affiliates, on the other hand, regardless of whether there are other Persons party to such contract or other agreement.

“Class B Member Deposit” has the meaning set forth in Section 3.4(h).

“Code” means the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder, or any corresponding provision(s) of succeeding law and/or regulation.

“Collateral” means all tangible and intangible property in respect of which a security interest or pledge is granted under the Senior Loan Documents.

“Company” means ARC Hospitality Portfolio II Holdco, LLC, a Delaware limited liability company, as said company from time to time hereafter may be constituted; unless the context clearly requires otherwise, all references herein to the “Company” include the Company and each Subsidiary.

“Company Assets” means all right, title and interest of the Company in and to all or any portion of the assets of the Company and any property (real, personal, tangible or intangible) or estate acquired in exchange therefor or in connection therewith.

“Condemnation” means any taking or voluntary conveyance during the term hereof of all or any part of any Property or any interest therein or right accruing thereto or use thereof, as the result of, or in settlement of, any condemnation or other eminent domain proceeding by any Governmental Authority, whether or not the same shall actually have been commenced.

“Contingent Obligation” means any obligation of any Subsidiary or the Company directly or indirectly guaranteeing any indebtedness or other obligation of any other Person in any manner.

“Control”, when used with respect to any Person, means the power to direct the management and policies of such Person, directly or through one or more intermediaries, whether through the ownership of voting securities, by contract or otherwise (including through any external management arrangements), and the terms “Controlling” and “Controlled” have meanings correlative to the foregoing.

“Delaware Court” has the meaning set forth in Section 12.9.

“Deposit” has the meaning set forth in Section 3.4(d).

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“Effective Date” means the date of this Agreement set forth in the introductory paragraph hereto.

“Election Notice” has the meaning set forth in Section 3.4(a).

“Environmental Claim” means any written notice, claim, proceeding, investigation, demand or other communication by any Person or Governmental Authority alleging or asserting liability with respect to any Subsidiary or any Property arising out of, based on or resulting from (i) the presence, use or release of any Hazardous Substance, (ii) any fact, circumstance, condition or occurrence forming the basis of any violation, or alleged violation, of any Environmental Law, or (iii) any alleged injury or threat of injury to property, health or safety or to the environment caused by Hazardous Substances.

“Environmental Indemnity Agreement” means that certain Environmental Indemnity Agreement, dated as of the date hereof, by the Guarantors for the benefit of the Class A Member.

“Environmental Laws” has the meaning assigned to such term in the Environmental Indemnity Agreement.

“Equity Members” means the Class B Member and the Class A Member.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated thereunder.

“ERISA Affiliate,” at any time, means each trade or business (whether or not incorporated) that would, at the time, be treated together with the Company or any of its Subsidiaries as a single employer under Title IV or Section 302 of ERISA or Section 412 of the Code.

“Executive Order” has the meaning set forth in Schedule 5.15(b).

“Existing LLC Agreement” has the meaning set forth in the Recitals.

“Fiscal Year” means the fiscal year of the Company, which shall be the calendar year; but upon termination of the Company, “Fiscal Year” shall mean the period from the end of the last preceding Fiscal Year to the date of such termination.

“Fundamental Decision” has the meaning set forth in Section 3.3(g).

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

“GS Group” means The Goldman Sachs Group, Inc., a Delaware corporation, together with its successors and assigns by merger, consolidation and/or sale of all or substantially all of its assets.

“Guarantees” means, collectively, the Mandatory Redemption Guaranty and the Bad Boy Guaranty and “Guaranty” shall mean either of them.

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“Guarantors” means each of Nicholas S. Schorsch, an individual, William M. Kahane, an individual, Edward M. Weil, Jr., an individual, Peter M. Budko, an individual, ARC OP and REIT.

“Hazardous Substances” has the meaning assigned to such term in the Environmental Indemnity Agreement.

“Increased Rate” means a rate per annum calculated on a cumulative basis and compounded monthly if not paid currently, equal to the sum of (i) the then-applicable Class A Return Rate plus (ii) five percent (5%).

“Increased Return” means any amount paid or due and payable to the Class A Member as a result of an increase in the Class A Return Rate to the Increased Rate.

“Indebtedness” of a Person, at a particular date, means the sum (without duplication) at such date of (a) indebtedness or liability for borrowed money; (b) obligations evidenced by bonds, debentures, notes, or other similar instruments; (c) obligations for the deferred purchase price of property or services (including trade obligations); (d) obligations under letters of credit; (e) obligations under acceptance facilities; (f) all guaranties, endorsements (other than for collection or deposit in the ordinary course of business), and other contingent obligations to purchase, to provide funds for payment, to supply funds to invest in any Person or otherwise to assure a creditor against loss; and (g) obligations secured by any Liens voluntarily granted on such Person’s property, whether or not the obligation have been assumed by such Person.

“Initial Class B Member Deposit” has the meaning set forth in Section 3.4(c).

“Insurance Requirements” means, collectively, (i) all material terms of any insurance policy required pursuant to this Agreement and (ii) all material regulations and then-current standards applicable to or affecting any Property or any part thereof or any use or condition thereof, which may, at any time, be recommended by the Board of Fire Underwriters, if any, having jurisdiction over any Property, or such other body exercising similar functions.

“Interest” means, with respect to any Member, the entire limited liability company interest of that Member in the Company, including the right of such Member to any and all benefits to which a Member may be entitled as provided in this Agreement, together with the obligations of such Member to comply with all the terms and provisions of this Agreement.

“Investment Company Act” has the meaning set forth in Section 2.11(c).

“IRS” means the Internal Revenue Service and any successor agency or entity thereto.

“Legal Requirements” means:

(i)          all governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions of Governmental Authorities affecting the Company, any Guarantor, any Subsidiary, the Class B Member or any Property or any part thereof or the construction, ownership, use, alteration or operation thereof or any part thereof (whether now or hereafter enacted and in force),

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(ii)         all permits, licenses and authorizations and regulations relating thereto, and

(iii)        all covenants, conditions and restrictions contained in any instruments at any time in force (whether or not involving Governmental Authorities) affecting any Property or any part thereof which, in the case of this clause (iii), require repairs, modifications or alterations in or to any Property or any part thereof, or in any material way limit or restrict the existing use and enjoyment thereof.

“Liability Indemnification Event” means any event or occurrence that entitles the Class A Member to a payment under a Guaranty.

“Lien” means any mortgage, deed of trust, lien (statutory or other), pledge, hypothecation, assignment, preference, priority, security interest, or any other encumbrance or charge on or affecting any Collateral or any portion thereof, or any interest therein (including, without limitation, any conditional sale or other title retention agreement, any sale-leaseback, any financing lease having substantially the same economic effect as any of the foregoing, the filing of any financing statement or similar instrument under the Uniform Commercial Code or comparable law of any other jurisdiction, domestic or foreign, and mechanics’, materialmen’s and other similar liens and encumbrances).

“Lockout Expiration Date” has the meaning set forth in Section 9.2.

“Managing Member” means, initially, the Class B Member, provided, that if for any reason the Class B Member ceases to be the Managing Member pursuant to the terms hereof, the term “Managing Member” shall thereafter mean the Class A Member or such other Person as may be so designated by the Class A Member in its sole discretion. The Managing Member is hereby designated as a “manager” of the Company within the meaning of Section 18-101(10) of the Act.

“Mandatory Redemption Date” means the earlier of (i) the date on which a Changeover Event first occurs, and (ii) the ninetieth (90th) day following the stated maturity date of the Senior Loans (as the same may be extended in accordance with the terms of the Senior Loan Documents pursuant to the extension options set forth therein as of the date hereof).

“Mandatory Redemption Guaranty” means that certain Mandatory Redemption Guaranty, dated as of the date hereof, made by the Guarantors in favor of the Class A Member.

“Material Adverse Effect” means a material adverse effect on (i) the use, operation, financial performance or prospects or value of the Company and its Subsidiaries taken as a whole or of the Properties taken as a whole, (ii) the current or future financial position or results of operations or business of the Company and its Subsidiaries taken as a whole, (iii) the ability of the Class A Member to enforce any Transaction Document or (iv) the ability of the Company, any Guarantor or the Class B Member to perform its obligations under any Transaction Document.

“Member” means each of the Class B Member, the Class A Member and the Company’s Special Member and any additional Persons hereafter admitted as a member of the Company in accordance with the provisions of this Agreement, for so long as such Person shall be a member

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of the Company and any transferee of such Person permitted hereunder and admitted as a member of the Company in accordance with Section 9.5, and “Members” shall mean such Persons, collectively.

“Mortgage Borrowers” means, collectively, the Pool 2 Owners, TRS, ARC Hospitality Stratford, LLC, a Delaware limited liability company, and ARC Hospitality TRS Stratford, LLC, a Delaware limited liability company.

“Mortgage Lender” means the holder(s), from time to time, of the Mortgage Loan.

“Mortgage Loan” means that certain loan in the original principal amount of $227,000,000 made by Ladder Capital Finance LLC, a Delaware limited liability company, and Deutsche Bank AG, New York Branch, a branch of Deutsche Bank, AG, a German Bank, to the Mortgage Borrowers.

“Mortgage Loan Agreement” means that certain Loan Agreement, dated as of the date hereof by the Mortgage Borrowers, as the mortgage borrowers, and Mortgage Lender as the mortgage lender, as the same may be subsequently amended, supplemented or modified from time to time.

“Mortgage Loan Documents” means the Mortgage Loan Agreement, the notes, mortgages, deeds of trust, assignments of leases, pledges, environmental indemnities, guarantees and all other agreements, instruments or documents relating to, evidencing or securing the Mortgage Loan including those documents listed on Schedule 1.1(b), as any of the foregoing may be amended, supplemented or modified from time to time.

“Mortgage Loan Obligations” means the indebtedness evidenced, secured or otherwise governed by the Mortgage Loan Documents.

“Net Disposition Proceeds” means Casualty or Condemnation proceeds not applied to restoring, repairing, replacing or rebuilding one or more Properties or retained by the Senior Lender under the Senior Loan Documents.

“Net Financing Proceeds” has the meaning set forth in Section 8.2(b).

“Net Sale Proceeds” has the meaning set forth in Section 8.2(a).

“New York Court” has the meaning set forth in Section 12.9.

“Offer Price” has the meaning set forth in Section 3.4.

“Organizational Document” means with respect to any Person (i) in the case of a corporation, such Person’s certificate of incorporation and by-laws, and any shareholder agreement, voting trust or similar arrangement applicable to any of such Person’s authorized shares of capital stock or the holders thereof, (ii) in the case of a limited partnership, such Person’s certificate of limited partnership, limited partnership agreement and any voting trusts or similar arrangements applicable to its partners or any of its partnership interests, (iii) in the case of a limited liability company, such Person’s certificate of formation or certificate of organization, limited liability company agreement and any other document affecting the rights or

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duties of managers or holders of limited liability company interests or (iv) in the case of any other legal entity, such Person’s organizational documents and all other documents establishing or affecting the duties or rights of holders of equity interests in such Person.

“Percentage Interest” means, with respect to any Member, initially, the percentage following such Member’s name on Schedule 6.1.

“Permitted Transfer” has the meaning assigned to it in Section 9.1(a).

“Person” means any individual, partnership, corporation, limited liability company, trust or other legal entity.

“Plan” means an employee benefit plan (i) which is maintained for employees of Company or its Subsidiaries or any ERISA Affiliate and which is subject to Title IV of ERISA or (ii) with respect to which Company or its Subsidiaries or any ERISA Affiliate could be subjected to any liability under Title IV of ERISA (including Section 4069 of ERISA).

“Plan Assets” means assets of any Plan, including any employee benefit plan subject to Part 4, Subtitle A, Title I of ERISA.

“Prohibited Person” has the meaning set forth in Schedule 5.15(b).

“Prohibited Transfer” means (i) any violation of Section 5.17 hereof, and (ii) any Transfer of the Class B Member’s Interest or any direct or indirect equity interest in the Class B Member in violation of the terms hereof.

“Properties” means the land and improvements at the locations set forth on Schedule A hereto and “Property” means the land and improvements at each such location, along with all personal property relating thereto and owned or controlled by the Mortgage Borrower or TRS (including, without limitation, the operating leases held by TRS).

“Property Management Agreements” means, collectively, each agreement to manage one or more of the Properties between the Company or a Subsidiary and a Property Manager; provided that each such agreement (together with any modification thereto) must be approved by the Class A Member (which approval shall not be unreasonably withheld, delayed or conditioned) unless (i) such agreement has been approved by the Senior Lender pursuant to the terms of the Senior Loan Documents or otherwise conforms with the terms of the Senior Loan Documents and (ii) if such agreement constitutes a Class B Member Affiliate Contract, such agreement is terminable by the Class A Member following the declaration of a Changeover Event without payment of any termination or similar fee (which termination right may be documented in a separate subordination, non-disclosure and attornment agreement with the Class A Member); provided, further, that if the Senior Lender receives a subordination or other agreement from the manager and/or any sub-manager, then such manager and/or sub-manager shall have entered into an agreement for the benefit of the Class A Member in substantially the same form and substance as the subordination or other agreement provided to the Senior Lender.

“Property Manager” means each manager of a Property appointed by the Company or a Subsidiary provided that each such manager must be approved by the Class A Member (which approval shall not be unreasonably withheld, delayed or conditioned) unless such appointment (i)

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has been approved by the Senior Lender pursuant to the terms of the Senior Loan Documents or otherwise complies with the terms of the Senior Loan Documents and (ii) the agreement with such manager complies with the terms set forth in the definition of “Property Management Agreements” above.

“Protective Capital” has the meaning set forth in Section 6.2.

“Qualified Capital Raise” means the issuance of interests in the REIT or any subsidiary of the REIT (excluding any such issuance completed on or prior to the Effective Date and in respect of amounts due under the Sale Agreement as of the Effective Date).

“QCR Redemption Amount” means, with respect to each Qualified Capital Raise, seven and eighty-one hundredths percent (7.81%) of the gross amount of proceeds received by the issuer from such Qualified Capital Raise after the earlier to occur of (a) the date of the repayment in full of the Barcelo Note, and (b) the date the gross amount of proceeds received by the issuer with respect to Qualified Capital Raises exceeds $100,000,000; provided, however, that in no event shall the aggregate QCR Redemption Amounts payable to the Class A Member exceed $78,120,000 during any twelve-month period.

“Recognition Agreements” means, collectively, (i) that certain Recognition Agreement, dated as of February 27, 2015, by and among Mortgage Lender, Mortgage Borrower, TRS and the Class A Member, and (ii) any recognition agreement hereafter entered into by the Class A Member with respect to any Additional Mezzanine Loan.

“Redemption Price” means, as of any date, an amount equal to the sum of (i) the Unrecovered Capital as of such date plus (ii) the accrued and unpaid Class A Return as of such date plus (iii) any other amounts then due or payable to the Class A Member hereunder or under the other Transaction Documents.

“Redemption Right” has the meaning set forth in Section 8.3.

“REIT” means American Realty Capital Hospitality Trust, Inc., Maryland corporation.

“Related Person” means with respect to any Person (i) an Affiliate of such Person, (ii) any officer, director, employee, agent, representative, shareholder, partner, member, manager, beneficial owner, servant, contractor or subcontractor of such Person or any Affiliate of such Person and (iii) any Person who controls any of the foregoing.

“Release Payment” means, with respect to the sale or other disposition of any Property, or any direct or indirect interest owned therein by the Company or any Subsidiary, (i) 110% of the aggregate Allocated Amount for such Property less (ii) the amount of any distributions in respect of the Unrecovered Capital of the Class A Member that were previously made to the Class A Member with Net Sale Proceeds, Net Disposition Proceeds and/or Net Financing Proceeds from such Property.

“Sale Agreement” has the meaning set forth in the Recitals.

“Scheduled Distribution Date” means in any calendar month the first (1st) day of such month or, if such day is not a Business Day, the immediately succeeding Business Day; provided,

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however, that in the event the payment date under the Senior Loan Documents should be hereafter modified, the Scheduled Distribution Date shall also be modified so that the Scheduled Distribution Date hereunder is also the payment date under the Senior Loan Documents.

“Scheduled Redemption Notice” has the meaning set forth in Section 5.5.

“Securities Act” has the meaning set forth in Section 2.11(c).

“Senior Lender” means, individually or collectively as the context may require, Mortgage Lender and each Additional Mezzanine Lender.

“Senior Loans” means, individually or collectively as the context may require, the Mortgage Loan and each Additional Mezzanine Loan.

“Senior Loan Documents” means, individually or collectively as the context may require, the Mortgage Loan Documents and the Additional Mezzanine Loan Documents.

“Senior Obligations” means, individually or collectively as the context may require, the Mortgage Loan Obligations and the Additional Mezzanine Loan Obligations.

“Significant Decision” has the meaning set forth in Section 3.6.

“Special Form” has the meaning set forth in Section 5.7(a).

“Special Member” means (i) with respect to the Company, the individual appointed and admitted as a Special Member in accordance with Section 2.7, who initially is William G. Popeo, (ii) with respect to the general partner of the Class B Member, the individual appointed and admitted as a special member of the general partner of the Class B Member in accordance with the terms hereof, and (iii) with respect to each Subsidiary, the individuals appointed and admitted as independent managers or independent directors of such Subsidiary in accordance with the terms hereof. The Special Member of the Company shall only have those rights and duties expressly set forth in this Agreement.

“Subsidiary” means Mezzanine GP, Mezzanine LP, Owner GP, Pool 2 Owners, TRS, TRS Holdco, TRS GP, Borrower, ARC Hospitality Portfolio II Concessions, LLC, a Delaware limited liability company, ARC Hospitality Portfolio II TX Management, LLC, a Delaware limited liability company, ARC Hospitality Portfolio II TX Holdings, LLC, a Delaware limited liability company, ARC Hospitality Portfolio II TX Beverage Company, LLC, a Delaware limited liability company, and any other entity in which the Company holds any ownership interest, whether directly or through one or more other Persons.

“Substituted Member” means any Person admitted to the Company as a Member pursuant to the provisions of Section 9.5.

“Transaction Documents” means collectively, this Agreement, the Environmental Indemnity Agreement, the Guarantees, the Cash Management Agreement, the Recognition Agreements, the certificate of formation and limited liability company agreement of each Subsidiary and each other instrument, agreement or certificate delivered by the Class B Member,

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any Guarantor or any Affiliate of any of them concurrently herewith or hereafter to or for the benefit of the Class A Member or any of its Affiliates in connection with this Agreement.

“Transfer” means, with respect to the Interest of any Member or the interests of the Company in any Subsidiary, any of the Properties or any other asset, any transfer, sale, pledge, hypothecation, encumbrance, assignment or other disposition, directly or indirectly (including of any interest in a Member or through any one or more intermediaries), of all or any portion of such asset or other asset or any right to receive proceeds therefrom (whether voluntarily, involuntarily, by operation of law or otherwise).

“Treasury Regulations” means the regulations promulgated under the Code, as such regulations are in effect on the date hereof.

“TRS” has the meaning set forth in the Recitals.

“Unrecovered Capital” means, as of any date, with respect to the Class A Member an amount (but not less than zero) equal to the excess of (a) the aggregate amount of the Class A Member’s Capital Contributions theretofore made pursuant to Article 6 over (b) the sum of the aggregate amount theretofore distributed to the Class A Member as a return of capital pursuant to Article 8. Amounts distributed or paid to the Class A Member as a Class A Return, an Increased Return or indemnification for Damages will not be considered a “return of capital”. As of the date hereof, the Class A Member’s Unrecovered Capital is equal to the amount set forth in Schedule 6.1 opposite its name.

“Whitehall Street” means Whitehall Street Global Real Estate Limited Partnership 2007, a Delaware limited partnership, together with its successors and assigns by merger, consolidation and/or sale of all or substantially all of its assets.

1.2          Terms Generally. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

(a)          the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision;

(b)          the words “including” and “include” and other words of similar import shall be deemed to be followed by the phrase “without limitation”; and

(c)          references herein to a “Schedule” are to one of the Schedules attached to this Agreement and references to an Article or a Section are to one of the Articles or Sections of this Agreement. Each Schedule attached hereto and referred to herein is hereby incorporated herein by reference.

ARTICLE 2

THE COMPANY AND ITS BUSINESS

2.1          Members; Continuation of the Company. Each of the Class A Member and the Special Member are hereby admitted to the Company as members. As a result of such admission, the members of the Company shall be the Class B Member, the Class A Member and the

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Company’s Special Member. Each of the Members hereby agrees to continue the Company in accordance with the terms hereof and pursuant to the Act.

2.2           Company Name. The business of the Company shall be conducted under the name of “ ARC Hospitality Portfolio II Holdco, LLC” in the State of Delaware and under such name or such assumed names as the Managing Member deems necessary or appropriate to comply with the requirements of any other jurisdiction in which the Company may be required to qualify.

2.3           Term. The term of the Company commenced with the filing of the Certificate with the Secretary of State of the State of Delaware on July 23, 2014 and shall continue in full force and effect perpetually unless the Company is dissolved as hereinafter provided.

2.4           Filing of Amendments to the Certificate. Each of the Members hereby agrees to execute and file any required amendments to the Certificate and to do or cause to be done all other acts requisite for the continuation of the Company as a limited liability company pursuant to the laws of the State of Delaware or any other applicable law.

2.5           Purpose. The Company is formed solely for the purpose of owning, operating managing, selling, financing and otherwise dealing with the Properties through the Subsidiaries. The Company may engage in any and all activities necessary or incidental to the foregoing. Notwithstanding anything contained herein to the contrary, the Company may not engage in any business, and may not have any purpose, unrelated to the Properties and may not acquire or own any real property or other assets other than those related to the ownership of the Properties through the Subsidiaries and the proceeds thereof (e.g., cash distributions received from the Subsidiaries).

2.6           Principal Office; Registered Agent. The principal office of the Company will be 106 York Road, Jenkintown, Pennsylvania 19046. The Company may change its place of business to such location or locations in the United States as may at any time or from time to time be designated by the Managing Member and approved by the Class A Member. The mailing address of the Company will be 106 York Road, Jenkintown, Pennsylvania 19046, or such other address as may be selected from time to time by the Managing Member. The Company shall maintain a registered office at c/o Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808. The name and address of the Company’s registered agent is Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808.

2.7          Classes of Members.

(a)          The Company shall have three classes of Members: a Class A Member and a Class B Member (collectively defined herein as “Equity Members”) and a special non-economic Member, who shall be a Special Member. For so long as any of the Senior Loans remains outstanding and the Class A Member has not been fully redeemed, the Company at all times shall have at least one Special Member who shall be a natural person appointed by the Class A Member and who Class A Member may confirm shall not have been at the time of appointment as Special Member, shall not thereafter become and shall not have been at any time during the five years preceding appointment (i) a member, manager or director (other than an “independent director” or “special member”) of, or an officer or employee of, the Company, any Member or any of their respective members, managers, investors or Affiliates, (ii) a customer of, supplier or

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service provider (including a provider of professional services) to, the Company, any Member, or any of their respective members, managers, investors or Affiliates such that such individual’s annual revenues derived from the Company, any Member, and their respective members, managers, investors or Affiliates exceeded 5% of such individual’s annual revenues for any of the preceding three years, (iii) a Person Controlling or under common Control with any of the Persons described in the foregoing clauses (i) or (ii), or (iv) a member of the immediate family of any such member, manager, director, officer, employee, supplier or customer or a member of the immediate family of any other member or manager described in the foregoing clauses (i) or (ii). Upon the occurrence of any event that causes the Special Member to cease to be a member of the Company, a new Special Member shall be appointed forthwith by the Class A Member, and no decision stated in this Agreement as requiring the consent of the Special Member shall be taken in the interim period until a new Special Member is appointed. No resignation or removal of a Special Member, and no appointment of a successor Special Member, shall be effective until such successor shall have accepted his or her appointment as a Special Member by a written instrument in which he or she agrees to be bound by all of the terms and conditions of this Agreement applicable to the Special Member. All right, power and authority of the Special Member shall be limited to the extent necessary to exercise those rights and perform those duties specifically set forth in this Agreement as being the responsibility of the Special Member. No Special Member shall at any time serve as trustee in bankruptcy for any Affiliate of the Company.

(b)          The Equity Members will be the only Members of the Company that have any interest in the profits, losses or capital of the Company. Except for the rights specifically granted to the Special Member in this Agreement, the Equity Members will be the only members of the Company with any voting or management rights.

(c)          The Special Member agrees to remain independent from the Equity Members and perform its obligations under this Agreement, agrees to be a Member of the Company for the limited purposes provided herein and to perform its obligations as the Special Member hereunder, and the Company and the Equity Members agree that the Special Member will be a Member of the Company only for such limited purposes. The Company, the Equity Members and the Special Member agree that the Special Member: (a) in accordance with Section 18-301 of the Act: (i) will not make, and will not be obligated to make, a contribution to the Company, and (ii) will not own, and will not be obligated to acquire, an Interest in the Company and (b) will have no management, approval, voting, consent or veto rights in the Company, other than to the extent that its affirmative vote, approval or consent is required for the Company or the Equity Members to perform certain acts or take certain actions as expressly provided in this Agreement. The Special Member may not bind the Company.

(d)          The limited liability company interests issued to the Equity Members pursuant to this Agreement have been duly authorized and are validly issued limited liability company interests in the Company.

2.8          Names and Addresses of the Members.

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The names and addresses for notices of the Equity Members are as follows:

Class A Member:

c/o Goldman Sachs Realty Management, L.P.
6011 Connection Drive
Irving, TX 75039
Attn: Greg Fay
Facsimile No.: (972) 368-3699
Telephone No.: (972) 368-2743

with copies to:

Whitehall Street Global Real Estate Limited Partnership 2007
c/o Goldman, Sachs & Co.
200 West Street
New York, NY 10282
Attn: Chief Financial Officer
Facsimile No.: (212) 357-5505
Telephone No.: (212) 902-5520

and to:

Sullivan & Cromwell LLP
125 Broad Street
New York, NY 10004
Attn: Anthony J. Colletta, Esq.
Facsimile No.: (212) 291-9029
Telephone No.: (212) 558-4608

Class B Member:

c/o American Realty Capital

405 Park Avenue

New York, New York 10022

Attn: Jon Mehlman

Facsimile No.: (212) 421-5799

Telephone No.: (646) 626-8857

with copies to:

c/o American Realty Capital

405 Park Avenue

New York, New York 10022

Attn: Michael Ead

Facsimile No.: (212) 421-5799

Telephone No.: (646) 381-0604

and to:

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Goodwin Procter LLP

53 State Street

Boston, MA 02109

Attn: Samuel L. Richardson, Esq.

Facsimile No.: (617) 523-1231

Telephone No.: (67) 570-1878

Special Member:

c/o Corporation Service Company

2711 Centerville Road, Suite 400

Wilmington, DE 19808

Attn: Independent Director Services

Facsimile No.: (302) 636-5454

Telephone No.: (302) 636-5401, ext. 65466

2.9         Authorized Persons. Erin Corbett, is hereby designated as an “authorized person” within the meaning of the Act, and has executed, delivered and filed the Certificate of Formation of the Company with the Secretary of State of the State of Delaware. Upon the filing of the Certificate of Formation with the Secretary of State of the State of Delaware, his (or her) powers as an “authorized person” ceased, and the Managing Member thereupon became the designated “authorized person” and shall continue as the designated “authorized person” within the meaning of the Act. The Managing Member shall execute, deliver and file any other certificates (and any amendments and/or restatements thereof) necessary for the Company to qualify to do business in any jurisdiction in which the Company may wish to conduct business. Any actions taken by any of the foregoing persons in connection with the execution, delivery or filing of the Certificate with the Secretary of State of the State of Delaware or the qualification of the Company or the Subsidiaries to do business or any other action relating thereto is hereby ratified, confirmed and approved by the Members as having been authorized by the Company.

2.10       Representations by the Class B Member. The Class B Member represents, warrants and agrees to and for the benefit of the Class A Member that, as of the Effective Date:

(a)          it is a corporation, a limited liability company or limited partnership, as the case may be, duly organized or formed and validly existing and in good standing under the laws of the state of its organization or formation; it has all requisite corporate, limited liability company or partnership power and authority to enter into this Agreement, to acquire and hold its Interest and to perform its obligations hereunder; and the execution, delivery and performance of this Agreement and each other Transaction Document to which it is a party has been duly authorized by all necessary corporate, limited liability company or partnership action;

(b)          its execution and delivery of this Agreement and each other Transaction Document to which it is a party and the performance of its obligations hereunder and thereunder will not conflict with, result in a breach of or constitute a default (or any event that, with notice or lapse of time, or both, would constitute a default) or result in the acceleration of any obligation under any of the terms, conditions or provisions of any other agreement or instrument to which it is a party or by which it is bound or to which any of its property or assets are subject, conflict with or violate any of the provisions of its Organizational Documents, or violate any statute or any order, rule or regulation of any court or governmental or regulatory agency, body or official,

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in any manner that would adversely affect the performance of its duties hereunder; such Member has obtained any consent, approval, authorization or order of any court or governmental agency or body required for the execution, delivery and performance by such Member of its obligations hereunder and thereunder;

(c)          there is no action, suit or proceeding pending against the Class B Member or, to its knowledge, threatened in any court or by or before any other governmental agency or instrumentality that would prohibit its entering into or performing its obligations under this Agreement or any other Transaction Document;

(d)          this Agreement and each other Transaction Document to which it is a party is a binding agreement on the part of the Class B Member enforceable against the Class B Member in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights;

(e)          each of the Company and each of the Subsidiaries has filed, or caused to be filed, all material tax returns (federal, state, local and foreign) required to be filed and paid all amounts of taxes shown thereon to be due (including interest and penalties) and has paid all other taxes, fees, assessments and other governmental charges (excluding real estate taxes and assessments in respect of the Properties, but including any taxes payable as a result of the consummation of the transactions contemplated by the Sale Agreement) owing by it, except for such taxes (i) which are not yet delinquent or (ii) as are being contested in good faith and by proper proceedings, and against which adequate reserves are being maintained in accordance with generally accepted accounting principles;

(f)          each of the Company, each Guarantor and the Class B Member is in full compliance with all Legal Requirements applicable to it, except for such instances of noncompliance when taken individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect;

(g)          none of the Company, any Subsidiary, the Class B Member or any ERISA Affiliate of any of the foregoing has incurred any liability under Title IV or Section 302 of ERISA or Section 412 of the Code or maintains or contributes to, or is or has been required to maintain or contribute to, any employee benefit plan subject to Title IV or Section 302 of ERISA or Section 412 of the Code. The consummation of the transactions contemplated hereby will not constitute or result in any transaction prohibited by Section 406 of ERISA or Section 4975 of the Code;

(h)          none of the Company, the Subsidiaries or the Class B Member is (i) an “investment company” as defined in the Investment Company Act, or controlled by such a company, or (ii) subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act, or the Interstate Commerce Act, each as amended;

(i)          none of the Company, any Subsidiary, the Class B Member or any Guarantor has filed or, to its knowledge, is contemplating the filing of a petition under any state or federal bankruptcy or insolvency laws or the liquidation of all or a major portion of its assets or property, and to its knowledge, no Person has threatened or is contemplating the filing of any such petition against the Company, any Subsidiary, the Class B Member or any Guarantor;

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(j)          neither the Company nor any Subsidiary has any outstanding Indebtedness other than as permitted under the Senior Loan Documents, and the Class B Member does not have any outstanding Indebtedness for borrowed money;

(k)          there are no actions, suits or legal, equitable, arbitration or administrative proceedings pending or, to its knowledge, threatened against the Company, any Subsidiary or the Class B Member or any Guarantor which, if adversely determined could be reasonably expected to result in a Material Adverse Effect;

(l)          none of the Class B Member, the Company, any Subsidiary or any Person controlling any of the foregoing has violated any of the covenants contained in Schedule 5.15(a) hereto (other than with respect to any obligations requiring a Special Member prior to the date hereof);

(m)          none of the Company, any Subsidiary or the Class B Member (or, if the Class B Member is disregarded as separate from its owner for tax purposes, the owner of the Class B Member for tax purposes) is a “foreign person” within the meaning of § 1445(f)(3) of the Code;

(n)          neither the Company nor any Subsidiary has entered any agreement or other arrangement for the provision of asset or property management, leasing or other advisory services or any franchise agreement with respect to any of the Properties prior to the Effective Date, except for any such agreements that (x) forms of which have been delivered to the Class A Member at least two (2) days prior to the Effective Date and (y) would comply with the terms of this Agreement if entered into by the Company or any of its Subsidiaries following the Effective Date.

2.11        Representations by the Class A Member. The Class A Member represents, warrants and agrees to and for the benefit of the Class B Member that, as of the Effective Date:

(a)          it is a limited liability company, duly formed and validly existing and in good standing under the laws of the state of its formation; it has all requisite limited liability company power and authority to enter into this Agreement, to acquire and hold its Interest and to perform its obligations hereunder; and the execution, delivery and performance of this Agreement and each other Transaction Document to which it is a party has been duly authorized by all necessary limited liability company action;

(b)          the Class A Member is acquiring its Interest for its own account, solely for investment purposes and not with a view to resale or distribution thereof;

(c)          the Class A Member acknowledges that (1) the offering and sale of the Interest (A) has not been and will not be registered under the U.S. Securities Act of 1933, as amended from time to time (the “Securities Act”), the securities laws of any state of the United States or the securities laws of any other jurisdiction, nor is such registration contemplated, (B) is being made in reliance upon federal and state exemptions for transactions not involving a public offering and/or rules governing offers and sales made outside the United States and (2) the Company will not be registered as an investment company under the U.S. Investment Company Act of 1940, as amended from time to time (the “Investment Company Act”). In furtherance thereof, the Class A Member represents and warrants that it is an “accredited investor” (as

24

defined in Regulation D under the Securities Act), and a “qualified purchaser” (as defined in the Investment Company Act);

(d)          the Class A Member (either alone or together with any advisers retained by such person in connection with evaluating the merits and risks of prospective investments) has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of purchasing the Interest. The Class A Member’s financial situation is such that the Class A Member can afford to bear the economic risk of holding its Interest for an indefinite period of time, and the Class A Member can afford to suffer the complete loss of the Class A Member’s investment. The Class A Member understands that (A) its Interest has not been and will not be registered under the Securities Act or the securities laws of any U.S. state and accordingly may not be offered, sold, transferred or pledged unless its Interest is duly registered under the Securities Act and all other applicable securities laws or financial services laws or regulations of any jurisdiction or such offer or sale is made in accordance with an exemption from registration (including, if applicable, Regulation S), (B) this Agreement contains substantial restrictions on the transferability of its Interest, (C) no market for resale of its Interest exists or is expected to develop, (D) the Class A Member may not be able to liquidate its investment in the Company and (E) any instruments representing its Interest may bear legends restricting the transfer thereof. The Class A Member understands that its Interest will not be evidenced by a certificate subject to Article 8 of the Uniform Commercial Code; and

(e)          the Class A Member has been furnished with, and has carefully read, this Agreement and has been given the opportunity to (i) ask questions of, and receive answers from, the Managing Member or any Affiliate thereof concerning the terms and conditions pertaining to an investment in the Company and (ii) obtain any additional information which the Managing Member can acquire without unreasonable effort or expense that is necessary to evaluate the merits and risks of an investment in the Company. To the full satisfaction of the Class A Member, the Class A Member has been furnished with any materials the Class A Member has requested relating to the Company or the issuance of its Interest. In considering its acquisition of its Interest, the Class A Member is not relying, and will not rely with respect to its Interest upon any representations or warranties made by, or other information (including, without limitation, any advertisement, article, notice or other communication published in any newspaper, magazine, website or similar media or broadcast over television or radio, and any seminars or meetings whose attendees have been invited by any general solicitation or advertising) furnished by or on behalf of, the Company, the Managing Member, the Class B Member, any Affiliate of the foregoing or any of their respective directors, officers, employees, partners, shareholders, advisers, attorneys-in-fact, representatives or agents, written or otherwise, other than as set forth in this Agreement, the other Transaction Documents and/or any separate agreement in writing with the Managing Member executed in conjunction with the Class A Member’s acquisition of its Interest. The Class A Member acknowledges that it was offered its Interest through private negotiations, not through any general solicitation or advertising. The Class A Member has carefully considered and has, to the extent it believes such discussion necessary or appropriate, discussed with legal, tax, accounting and financial advisers the suitability of an investment in the Company in light of its particular tax and financial situation, and has determined that its Interest is a suitable investment for it.

2.12         Certain Tax Matters.

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(a)          The Members and the Company agree that for tax purposes, the Class A Member’s Initial Capital Contribution in exchange for its rights to the distributions set forth in Article 8 and Section 10.3 shall be treated as a disguised sale (under Section 707 of the Code and the Treasury Regulations thereunder) from the Class A Member to the Class B Member on the Effective Date, and that the rights to receive the distributions set forth in Article 8 and Section 10.3 shall be treated as an obligation of the Class B Member to make such payments as consideration for such disguised sale.

(b)          The Members intend that the Company be disregarded as an entity separate from the owner of the Class B Member for tax purposes, and that the Class A Member not be treated as a “partner” of the Company for tax purposes. The Company shall not elect to be classified as an association taxable as a corporation on Internal Revenue Service Form 8832.

(c)          The Members and the Company agree, except as otherwise required by applicable law (as agreed to by the Managing Member and the Class A Member) or pursuant to a “determination” within the meaning of Section 1313(a) of the Code, not to take an inconsistent position with such treatment on any tax return. Subject to the preceding sentence, in the event that the Class A Member is required to be treated as a “partner” of the Company for tax purposes, income, gain, loss and deduction with respect to any property contributed to the capital of the Company by the Members shall, solely for tax purposes, be allocated among the Members so as to take into account any variation between the adjusted basis of such property for federal income tax purposes and the value of such property reflected on the books of the Company using the “ remedial method” described in Treasury Regulations Section 1.704-3(b).

(d)          The Members acknowledge that the Class B Member is an Affiliate of the REIT and agree to manage the Company and its Subsidiaries in a manner that enables the REIT to qualify as a real estate investment trust within the meaning of Section 856 of the Code and that recognizes the income, asset and operating requirements applicable to a real estate investment trust under the Code. To this end, the Members shall cooperate to cause the Company and its Subsidiaries (i) to (A) limit the investment of amounts deposited in the Cash Management Account to investments treated as cash, cash items or government securities for purposes of Section 856(c)(4) of the Code and (B) otherwise operate in such a manner such that the Company, assuming it were a real estate investment trust, would satisfy the income and asset tests applicable to real estate investment trusts and would not be subject to any taxes under Section 857 of the Code, and (ii) to avoid taking any action that could otherwise result in the REIT failing to qualify as a real estate investment trust under the Code. Notwithstanding the preceding provisions of this Section 2.12(d), nothing herein shall in any way limit the rights or remedies of the Class A Member hereunder or under any of the other Transaction Documents or modify the economic or other terms of this Agreement or the other Transaction Documents. The provisions of this Section 2.12(d) shall continue to apply for so long as the Class B Member owns an economic interest in the Company and, if the Class B Member is not the Managing Member, the Managing Member shall provide the Class B Member with any information regarding the Company it reasonably requests for purposes of establishing the Company’s compliance with this Section 2.12(d).

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ARTICLE 3

MANAGEMENT OF COMPANY BUSINESS;
POWERS AND DUTIES OF THE MEMBERS

3.1         Management of the Company Business.

(a)          Subject to the provisions of this Article 3 and the other provisions of this Agreement, the Managing Member shall have the right, power and authority and the duty to manage the day-to-day operations of the Company in accordance with the terms hereof, this Agreement and applicable laws and regulations. The Managing Member shall devote such time to the Company and its business as is necessary to conduct the operations of the Company in an efficient manner and to carry out the Managing Member’s responsibilities as set forth herein. In furtherance of the foregoing, but subject to the limitations in this Article 3 and the other provisions of this Agreement, the Managing Member shall have the right, authority and duty to deal with, operate and manage the Properties on behalf of the Company and its Subsidiaries.

(b)          The Managing Member shall not have any right, power or authority under this Agreement or otherwise to (and shall not) bind or take any action on behalf of or in the name of the Company, or enter into any commitment or obligation binding upon the Company, that would constitute a Significant Decision, unless authorized by the Class A Member in advance in the manner set forth herein. To the fullest extent permitted by law, and without limiting its indemnification pursuant to Section 4.3(a), the Managing Member shall indemnify and hold harmless the Company and the other Members and their Affiliates from and against any and all claims, demands, losses, damages, liabilities, lawsuits and other proceedings, judgments and awards, and costs and expenses (including, but not limited to, reasonable attorneys’ fees) arising, directly or indirectly, in whole or in part, out of any breach of the provisions of this Section 3.1(b) by the Managing Member or any Affiliate of the Managing Member. The Managing Member shall not be entitled to any compensation from the Company for performance of its duties as Managing Member.

(c)          The Managing Member shall meet in person or telephonically with the Class A Member and/or its agents or designees at such reasonable times as the Class A Member may reasonably request to discuss the business and affairs of the Company, but in no event more frequently than monthly.

3.2          Appointment of Initial Managing Member. Subject to Section 3.3 and the other provisions of this Agreement, the Members hereby appoint the Class B Member as the initial Managing Member with the rights and responsibilities set forth in Section 3.1 and subject to the limitations set forth in Section 3.1(b), Section 3.6 and elsewhere in this Agreement. The rights of the Class B Member as Managing Member may not be assigned voluntarily or by operation of law by the Class B Member, and the duties of the Class B Member as Managing Member may not be delegated voluntarily or otherwise by the Class B Member.

3.3          Class A Member’s Rights Following a Changeover Event.

(a)          Notwithstanding the appointment set forth in Section 3.2 or any other provision of this Agreement to the contrary, upon the occurrence of a Changeover Event (subject to the provisions of Section 3.5 solely in the case of those events described in clauses (4), (5), (6), (10),

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(11), (18), (19), (20), (21) and (22) of the definition of Changeover Event) and the delivery by the Class A Member to the Class B Member of notice to such effect: (i) the Class B Member automatically, immediately and without any further action by the Class A Member or any other Person shall cease to be the Managing Member, (ii) all references in this Agreement to the term “Managing Member” shall refer to the Class A Member or such other Person as the Class A Member may then designate as Managing Member, (iii) the Class A Member, individually, or together with any designee appointed by it to act as Managing Member, shall have the exclusive right, power and authority, to make any and all decisions and take any actions (including, without limitation, any Significant Decisions) on behalf of or with respect to the Company and each of its Subsidiaries, provided, however, that the duties and obligations of the Managing Member to the other Members shall not be assumed by the Class A Member, and (iv) the Class A Member shall have the exclusive right, power and authority in its sole and absolute discretion to terminate the Property Management Agreements in accordance with the terms thereof (and each such Property Management Agreement entered into with an Affiliate of the Class B Member (and any related sub-property management agreement) shall provide that it shall be terminable by the Class A Member in such instance without payment of any termination or similar fee), and subject to the terms of the Senior Loan Documents, appoint a replacement. Any reasonable, out-of-pocket expenses incurred by the Class A Member, including any amounts payable to Affiliates of the Class A Member, in acting as the Managing Member of the Company shall be promptly reimbursed by the Company. The Class A Member’s authority and rights pursuant to the preceding sentence are in addition to, and not in limitation or to the exclusion of, any of the Class A Member’s other rights or remedies herein or in any of the other Transaction Documents following a Changeover Event. Upon the declaration of a Changeover Event by the Class A Member, the Class A Member shall deliver, or cause its Affiliate to deliver, to Senior Lender the replacement guaranty and environmental indemnity required by the terms of the Senior Loan Documents.

(b)          For the avoidance of any doubt, and without limiting the foregoing, the Class B Member hereby consents and agrees that upon the declaration by the Class A Member of the occurrence of a Changeover Event (subject to the provisions of Section 3.5 solely in the case of the events described in clauses (4), (5), (6), (10), (11), (18), (19), (20), (21) and (22) of the definition of Changeover Event), the Class A Member shall have sole and exclusive right, power and authority (i) to sell the Company or the direct or indirect interests of the Company in its Subsidiaries or cause the Company and each Subsidiary to sell or refinance all or any portion of its assets at such time or times as the Class A Member in its sole discretion shall determine, regardless of market conditions, real estate values or financial conditions at such time or times, regardless of the impact of such sale or refinancing or the timing thereof on the Company or the Class B Member (and regardless of the benefits derived by the Class A Member or the consequences suffered by the Class B Member or any Affiliate thereof by virtue of or from such sale or refinancing), provided that in no event may the Class A Member sell the Company or any of its Subsidiaries or any of the Properties to the Class A Member or an Affiliate of the Class A Member, (ii) to cause the Company and/or its applicable Subsidiaries to incur one or more Additional Mezzanine Loans pursuant to the terms of the Senior Loan Documents, (iii) to cause the Company promptly to make any and all payments and/or distributions to the Class A Member and any of its Affiliates to the extent of any amounts then due or past due or that thereafter become payable pursuant to this Agreement or any other Transaction Document or of all or any portion of the Class A Member’s Unrecovered Capital (whether or not then “due”), regardless of the impact of such payments or distributions on the Company or the Class B Member, (iv) to cause the Company to liquidate pursuant to Article 10, and (v) to exercise the rights and powers

28

granted to it pursuant to paragraph (a) above, including, without limitation, the making of any Significant Decision, in such manner as the Class A Member determines, in its sole discretion, and, in each of the foregoing cases, take (or cause the Company or any of its Subsidiaries to take) all actions and make all decisions that are reasonably related to its exercise of the foregoing remedies).

(c)          In financing or refinancing a Property or any other asset of the Company or any Subsidiary under the circumstances described in (b) above, the Class A Member may conduct the financing process or refinancing process, as applicable, in any manner the Class A Member determines, in its sole discretion, provided, that in no event may the Class A Member cause the Company or any Subsidiary to enter into financings or refinancings with the Class A Member or an Affiliate of the Class A Member.

(d)          The Class B Member acknowledges and agrees that in exercising the authority granted to the Class A Member in the foregoing provisions and elsewhere in this Agreement and each other Transaction Document relating to or following a Changeover Event, to the fullest extent permitted by law, the Class A Member shall have no duty, obligation or liability (fiduciary or otherwise) to the Class B Member or any Affiliate thereof or any other Person whatsoever (other than as expressly set forth in this Agreement), it being understood that the Class A Member shall be entitled to exercise such authority in any manner it deems necessary or desirable to maximize the value of its investment in the Company or to fulfill any other Class A Member objective.

(e)          In addition to the rights and remedies set forth in this Article 3 and elsewhere in this Agreement, following the occurrence of a Changeover Event, the Unrecovered Capital shall accrue a return in favor of the Class A Member at the Increased Rate.

(f)          The Class B Member acknowledges and agrees that the authority granted to the Class A Member in this Article 3 was a material inducement and conditions precedent to the Class A Member’s willingness to make its investment in the Company, and that the Class A Member would have refused to make its investment absent such authority.

(g)          Notwithstanding the foregoing provisions of this Section 3.3, following the replacement of the Managing Member by the Class A Member pursuant to the terms of Section 3.3(a), the Managing Member shall not take or cause the Company or any Subsidiary to take any of the following actions (each, a “Fundamental Decision”), unless such action has been approved by all of the Equity Members in writing and in advance:

(1)         causing the Company or any Subsidiary to engage in any business other than the business described in Section 2.5 hereof;

(2)         acquiring any other real property other than the Properties and any fee estate(s) underlying any Property that is subject to a ground lease;

(3)         except for mergers between or only the Company and its Subsidiaries, causing the Company or any Subsidiary to undertake a merger or consolidation;

(4)         instituting proceedings to adjudicate the Company or any Subsidiary a bankrupt, or consenting to the filing of a bankruptcy proceeding against the Company or

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any Subsidiary, or filing a petition or answer or consent seeking reorganization of the Company or any Subsidiary under the Bankruptcy Code or any other similar applicable federal, state or foreign law, or consenting to the filing of any such petition against the Company or any Subsidiary, or consenting to the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of the Company or any Subsidiary or of its property, or making an assignment for the benefit of creditors of the Company or any Subsidiary or otherwise taking action that would trigger full recourse to any guarantor of any Senior Loan that is an Affiliate of the Class B Member; or

(5)         terminating the operating lease for the Properties between the Mortgage Borrower and the TRS, except for the termination of the operating lease with respect to any Properties which are sold by the Mortgage Borrower.

(6)         causing the Company or any Subsidiary to enter into any agreement or arrangement with the Class A Member or an Affiliate of the Class A Member unless such agreement or arrangement is on arm’s-length commercially reasonable terms.

3.4           Buy/Sell Following a Changeover Event; Remedy Not Exclusive.

(a)          Subject to Section 3.5, if the Class A Member gives the Class B Member notice of a Changeover Event, then, in addition to all other rights of the Class A Member hereunder at law or otherwise, the Class A Member shall have the right (but not the obligation), in its sole and absolute discretion to initiate the following “buy/sell” procedure by delivering an election notice to the Class B Member (such notice, an “Election Notice”). Such Election Notice shall state that the Class A Member has elected to initiate the buy/sell procedures in this Section 3.4, pursuant to which the Company will be sold to either the Class B Member or the Class A Member. Within ten (10) Business Days after receiving an Election Notice from the Class A Member (with time being of the essence), the Class B Member shall deliver to the Class A Member a response (the “Buy/Sell Response Notice”) setting forth a proposed price (the “Offer Price”) for the Company. Any such Buy/Sell Response Notice shall state that it is, and in any event shall be deemed, an irrevocable and unconditional offer by the Class B Member (i) to buy the Interest of the Class A Member for (A) the amount that the Class A Member would have received if the Company were sold for the Offer Price and the proceeds thereof were distributed to the Members in accordance with Section 8.4, plus (B) without duplication, any amounts owed to the Class A Member and any of its Affiliates pursuant to the terms hereof (including as a result of the Changeover Event in question), less (C) the amount of the Class B Member Deposit (as hereinafter defined) posted by the Class B Member (the “Class A Interest Sale Price”) and (ii) to sell to the Class A Member the Interest of the Class B Member for (A) the amount that the Class B Member would have received if the Company were sold for the Offer Price and the proceeds thereof were distributed to the Members in accordance with Section 8.4, less (B) without duplication, any amounts owed to the Class A Member and any of its Affiliates pursuant to the terms hereof (including as a result of the Changeover Event in question), less (C) the amount of the Class A Member Deposit (as hereinafter defined) posted by the Class A Member (the “Class B Interest Sale Price”). If the Class B Member shall fail to deliver a Buy/Sell Response Notice within such 10-Business Day period, then the Class B Member shall nevertheless be deemed to have delivered, and the Class A Member shall be deemed to have received, a Buy/Sell Response Notice with an Offer Price equal to the Redemption Price. The Class A Member shall have the right, by notice to the Class B Member within ten (10) Business Days after the delivery (or deemed delivery) of the Buy/Sell Response Notice, either:

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(1)         to buy (or have its designee buy) the Interest of the Class B Member for the Class B Interest Sale Price, or

(2)         sell the Class A Member’s Interest in the Company to the Class B Member (or to their designee) for the Class A Interest Sale Price.

(b)          If the Class A Member does not respond to a Buy/Sell Response Notice within ten (10) Business Days following its receipt (or deemed receipt) thereof and the Class A Interest Sale Price set forth in such Buy/Sell Response Notice is greater than the Redemption Price, the Class A Member shall be deemed to have elected to sell its Interest to the Class B Member for such Class A Interest Sale Price. If the Class A Member does not respond to a Buy/Sell Response Notice within ten (10) Business Days of receipt thereof and the Class A Interest Sale Price set forth in such Buy/Sell Response Notice is equal to or less than the Redemption Price, the value of the Interest of the Class B Member shall conclusively be deemed to be zero ($0) and the Class A Member shall be deemed to have elected to buy the Interest of the Class B Member for a Class B Interest Sale Price equal to $1.

(c)          If the Class A Member elects (or is deemed to have elected) to sell its Interest to the Class B Member (or its designee) for the Class A Interest Sale Price, then, within thirty (30) days following such election, the Class B Member shall fund to the Class A Member a non-refundable earnest money deposit in the amount of five percent (5%) of the Class A Interest Sale Price (the “Initial Class B Member Deposit”). If the Class B Member shall fail to fund the Initial Class B Member Deposit to the Class A Member on or prior to the expiration of such 30-day period, then (i) the election of the Class A Member to sell its Interest to the Class B Member (or its designee) for the Class A Interest Sale Price shall be deemed revoked and the Class A Member shall instead be deemed to have elected to purchase the Class B Member’s Interest for the Class B Interest Sale Price and (ii) the Class B Interest Sale Price for such acquisition shall be $1.

(d)          If the Class A Member elects to acquire the Interest of the Class B Member for the Class B Interest Sale Price, then, within thirty (30) days following such election, the Class A Member shall fund to the Class B Member a non-refundable earnest money deposit in the amount of five percent (5%) of the Class B Interest Sale Price (the “Class A Member Deposit” and each of the Class A Member Deposit and the Class B Member Deposit being referred to herein as a “Deposit”). If the Class A Member shall fail to fund the Class A Member Deposit to the Class B Member on or prior to the expiration of such 30-day period, then the Class A Member shall be deemed to have elected to sell its Interest to the Class B Member for the Class A Interest Sale Price and the Class B Member shall have a period of ten (10) Business Days to either (1) elect to acquire the Internet of the Class A Member for the Class A Interest Sale Price or (2) elect not to acquire the Interest of the Class A Member, in which case the Class A Member may not issue a new Election Notice for a period of thirty (30) days.

(e)          Subject to Section 3.4(h), the closing for any such sale transaction shall occur no later than sixty (60) days after the date on which the Initial Class B Member Deposit or the Class A Member Deposit (as applicable) has been funded, with time being of the essence. If either Member defaults on its obligation to close within the 60-day period described above, then, in addition to any other rights and remedies available to the non-defaulting Member, (x) if the non-defaulting Member received a Deposit from the defaulting Member, the non-defaulting Member shell be entitled to keep such Deposit, together with any interest thereon, as liquidated damages, it being agreed that the non-defaulting Member’s actual damages would be difficult, if not

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impossible, to ascertain and that the liquidated damages hereinabove specified are a fair and reasonable estimate of the actual damages that the non-defaulting Member would suffer in the event of a default by the other Member; each Member hereby acknowledges and agrees that said liquidated damages are in no way a penalty or forfeiture, but instead represent the Members’ best estimate of the actual damages that would be suffered by the non-defaulting Member in the event of such a default, and (y) if the non-defaulting Member funded a Deposit, the non-defaulting Member shall be entitled to receive a return of such Deposit and seek specific performance of the defaulting Member’s obligation to sell its Interest to the non-defaulting Member.

(f)          Each of the Class A Member and the Class B Member hereby acknowledges and agrees that upon exercise by the Class A Member (or its designee) of the buy/sell option as described above, the selling Member must and will transfer its Interest free and clear of all Liens and adverse claims other than Liens arising pursuant to the terms of the Senior Loan Documents, this Agreement or any other Transaction Document. In the event that a Member shall have created or suffered any unauthorized Liens or other adverse claims against all or any portion of its Interest, then in addition to any other remedies then available, the acquiring Member or its designee shall be entitled to an action for specific performance to compel the selling Member and its constituent members and controlling persons to cause such adverse interests to be removed without any cost to the Company or the acquiring Member.

(g)          At the closing of any sale of a Member’s Interest under this Section, each of the buying Member and the selling Member shall be deemed to have released the other from any and all claims, obligations, liabilities, actions, judgments, suits or proceedings relating to the Company, the Members’ Interests and the Properties, except for liabilities arising under the Guarantees or the Environmental Indemnity Agreement which by their terms survive redemption of the Interests of the Class A Member. Each Member agrees to deliver any additional documents reasonably requested by the other Member to evidence or effectuate such releases.

(h)          In connection with any acquisition by the Class B Member of the Class A Member’s Interest pursuant to the terms of this Section 3.4, the Class B Member must comply with all applicable assumption, transfer and change in control conditions and provisions of the Senior Loan Documents and must obtain a release of the Class A Member and/or its Affiliates from their respective obligations under any guarantees and/or indemnities provided to the Senior Lenders in connection with the declaration of a Changeover Event, which compliance and release shall each be a condition to the obligation of the Class A Member to sell its Interest to the Class B Member pursuant to this Section 3.4. If the Class B Member fails to satisfy the conditions to closing set forth in the immediately preceding sentence prior to the expiration of the 60-day period described in paragraph (c) above, then the Class A Member’s election to sell its Interest to the Class B Member shall be null and void and the Class A Member shall instead be deemed to have elected to acquire the Class B Member’s Interest, provided that the Class B Interest Sale Price for such acquisition shall be $1; provided that the Class B Member shall be entitled to extend such 60-day period for an additional thirty (30) days in order to satisfy such condition if the Class B Member funds to the Class A Member an additional non-refundable earnest money deposit in the amount of five percent (5%) of the Class A Interest Sale Price (the “Additional Class B Member Deposit” and, together with the Initial Class B Member Deposit, collectively, the “Class B Member Deposit”). In connection with any acquisition by the Class A Member of the Class B Member’s Interest pursuant to the terms of this Section 3.4, the parties shall use commercially reasonable efforts to obtain a release of the Class B Member and/or its Affiliates from their respective obligations under any guarantees and/or indemnities provided to the Senior

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Lenders under the Senior Loan Documents, to the extent such obligations arise from any circumstance, condition, action or event first occurring after the date of such acquisition. To the extent the parties cannot obtain such a release from the Senior Lenders, then the Class A Member shall cause Whitehall Street to deliver an indemnity to the Class B Member and/or its applicable Affiliates with respect to such obligations.

(i)          The Class B Member will bear the costs incurred by both parties in connection with the exercise of the buy/sell, including reasonable attorneys’ fees and expenses, transfer taxes, termination fees (including contractual damages) and the costs of obtaining any consents or approvals.

(j)          Subject to Section 3.4(g), the Class B Member hereby acknowledges and agrees that none of the rights granted in this Section 3.4 is intended or shall be deemed to be exclusive, but that each is intended to and will be in addition to all the other rights available to the Class A Member following a Changeover Event, whether pursuant to the terms of this Agreement, any other Transaction Document, at law, in equity, or otherwise.

(k)          Nothing herein shall limit the Class B Member’s right to redeem the Class A Member’s Interest in the Company pursuant to terms of Section 8.3 hereof.

3.5           The Class B Member’s Rights Following a Changeover Event. If, the Class A Member gives the Class B Member a notice alleging the occurrence of a Changeover Event pursuant to Section 3.3 (such notice, a “Changeover Notice”) alleges only the occurrence of events of the type described in clauses (4), (5), (6), (10), (11), (18), (19), (20), (21) and (22) of the definition of Changeover Event and not of events described in any other clauses of the definition of Changeover Event, then, unless an arbitration award or judicial determination has already been issued supporting the allegations of the Changeover Notice, the Class B Member shall be entitled, within ten (10) Business Days after delivery of the Changeover Notice, to contest such allegations by delivering good faith written notice containing reasonable detail as to its basis for contesting such allegations (a “Dispute Notice”) within such 10-Business Day period to the Class A Member and, within such 10-Business Day period, submitting the same to arbitration in accordance with the provisions of Section 12.10. If the Class B Member fails to give such Dispute Notice within such 10-Business Day period, then (i) it shall be automatically and conclusively deemed that the allegations in the Changeover Notice are true and (ii) the Class A Member shall be entitled to exercise all of its rights hereunder, including its rights to initiate the buy/sell and sell the Properties, the Company or the Subsidiaries. If the Class B Member timely delivers a Dispute Notice and submits the matter to arbitration as aforesaid and the arbitration panel appointed pursuant to Section 12.10 determines that (x) one or more of the events described in the Changeover Notice did constitute one or more Changeover Events, then the Class A Member shall be entitled to exercise all of its rights and remedies hereunder retroactive, as applicable, to the date on which the Class A Member delivered the Changeover Notice, including its rights to charge the Increased Rate and to initiate the buy/sell and sell the Company, the Subsidiaries or the Properties, or (y) none of the events described in the Changeover Notice constituted a Changeover Event, then it shall be automatically and conclusively deemed that the Changeover Events specified in the Changeover Notice did not occur and the Class B Member shall be reinstated as the Managing Member (if it was acting as Managing Member immediately prior to the Class A Member’s declaration of a Changeover Event) and the Class A Member shall not be entitled to exercise its rights with respect to such Changeover Notice (without prejudice to its rights and remedies with respect to any other occurrence of a Changeover Event). In no event

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may the arbitration panel consider the enforceability of any provision of this Agreement, and the scope of any proceeding before the arbitration panel shall be limited to whether the grounds for the declaration of a Changeover Event in fact existed. Pending the ruling of such arbitration panel, a Changeover Event subject to this Section 3.5 will not be deemed to have occurred with respect to the matters before the arbitration panel, the Class A Member will not have the right to sell the Properties, the Company or the Subsidiaries or initiate the buy/sell procedures described in Section 3.4 in respect of such Changeover Event and the Managing Member shall continue to operate the Company and the Subsidiaries in the ordinary course of business and in accordance with the terms of this Agreement. In no event may the Class B Member arbitrate the occurrence of any Changeover Event described in clauses (1), (2), (3), (7), (8), (9), (12), (13), (14), (15), (16) or (17) of the definition of “Changeover Event” and any declaration by the Class A Member of a Changeover Event based in whole or in part on any one or more of the events described in such clauses shall be effective immediately.

3.6           Significant Decisions. Notwithstanding anything to the contrary set forth in this Agreement but subject to Section 3.3, no Member shall take or cause or permit the Company or any Subsidiary to take any of the following actions, expend any amount of money, make any decision or incur any obligation on behalf of the Company or any Subsidiary with respect to any matter within the scope of any of the matters enumerated below (each a “Significant Decision”) unless the action, expenditure or other decision has been approved by the Class A Member in writing and in advance and has been approved in accordance with any other requirements of this Agreement:

(1)         except for any sale of one or more Properties where the Net Disposition Proceeds therefrom are sufficient to pay all amounts owing to the Senior Lenders in respect of such sale and for the Company to pay the Release Payment required to be paid to the Class A Member in respect of such sale, sell, transfer, assign or otherwise dispose of, or enter into or cause or permit any Subsidiary to enter into any agreement or option to sell, transfer, assign or otherwise dispose of, all or any portion of any of the Properties or any other Company Asset (except immaterial items of personal property sold in the ordinary course of business) or of any of the Company’s direct or indirect interests in any Property or any Subsidiary;

(2)         (a) change the nature of the business or the method of conducting the affairs of the Company or any Subsidiary or the use of any Property or (b) acquire any land or other real property or interest therein;

(3)         enter into any agreement or other arrangement with the Class B Member, any Guarantor or any of their respective Affiliates unless (i) such agreement or other arrangement is on arm’s-length commercially reasonable terms and (ii) such agreement or other arrangement is terminable by the Class A Member following the declaration of a Changeover Event without payment of any termination or similar fee; provided that the Mortgage Loan Documents and Operating Leases are hereby approved in their current form;

(4)         fail to comply with any of the covenants set forth in Section 5.15;

(5)         to the fullest extent permitted by law, dissolve and wind-up the Company or any Subsidiary or elect to continue the Company or any Subsidiary or elect to continue

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the business of the Company or any Subsidiary (or permit any Subsidiary to do any of the foregoing) (other than dissolving and winding up any Subsidiary whose sole direct or indirect asset was a Property sold in accordance with the provisions hereof);

(6)         except (i) as permitted under the Senior Loan Documents, (ii) any refinancing of any of the Senior Loans in which the Company concurrently redeems the Class A Member’s Interest in full for the Redemption Price, and (iii) any incurrence of Additional Mezzanine Loans in accordance with the terms of the Senior Loan Documents where the Company concurrently pays the Class A Member all of the Net Financing Proceeds from the incurrence thereof, incur, renew or refinance Indebtedness of the Company or any Subsidiary (or permit any Subsidiary to do any of the foregoing);

(7)         except for immaterial modifications that are not adverse to the Class A Member or the Company or any of its Subsidiaries, modify (i) any loan documentation (including the Senior Loan Documents) executed by the Company or any Subsidiary or (ii) any other material agreement (including any franchise, leasing or property or asset management agreement) the execution of which required the approval of the Class A Member (or permit any Subsidiary to do any of the foregoing);

(8)         institute proceedings to adjudicate the Company or any Subsidiary a bankrupt, or consent to the filing of a bankruptcy proceeding against the Company or any Subsidiary, or file a petition or answer or consent seeking reorganization of the Company or any Subsidiary under the Bankruptcy Code or any other similar applicable federal, state or foreign law, or consent to the filing of any such petition against the Company or any Subsidiary, or consent to the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of the Company or any Subsidiary or of its property, or make an assignment for the benefit of creditors of the Company or any Subsidiary, or admit, in any legal proceeding, the Company’s or any Subsidiary’s inability to pay its debts generally as they become due (or permit any Subsidiary to do any of the foregoing); or make any decision on behalf of the Company or any Subsidiary with respect to any Bankruptcy or other similar proceeding under any present or future federal, state, local or other law involving the Company, any Subsidiary or any portion of the Property;

(9)         organize or form any Subsidiary of the Company or of any Subsidiary or become a member of any such entity (it being understood that (A) the Company already is a member of Mezzanine GP and TRS Holdco, and a limited partner of Mezzanine LP, (B) Mezzanine GP is the general partner of Mezzanine, (C) Mezzanine LP is already a member of LLC Borrower and Owner GP and a limited partner of LP Borrower, (D) Owner GP is already the general partner of LP Borrower, (E) TRS Holdco is already a member of Main TRS, HIL TRS, MISC TRS, and TRS GP, and a limited partner of Main LP TRS and HIL LP TRS, (F) TRS GP is already the general partner of Main LP TRS and HIL LP TRS, (G) Main LP TRS is already a member of ARC Hospitality Portfolio II Concessions, LLC, a Delaware limited liability company (“Concessions”), (H) Concessions is already a member of ARC Hospitality Portfolio II TX Management, LLC, a Delaware limited liability company (“Management”), (I) Management is already a member of ARC Hospitality Portfolio II TX Holdings, LLC, a Delaware limited liability company (“TX Holdings”), and (J) TX Holdings is already a member of ARC Hospitality Portfolio II TX Beverage Company, LLC, a Delaware limited liability company

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(“Beverage”)), other than in connection with the incurrence of an Additional Mezzanine Loan in accordance with the terms of this Agreement, in which case the Company shall own one hundred percent (100%) of the interests in the Subsidiary formed for the purpose of incurring such Additional Mezzanine Loan, which in turn shall own one hundred percent (100%) of the interests in the Mezzanine GP and ninety-nine percent (99%) of the limited partnership interests and the general partnership interest in Mezzanine LP;

(10)        amend this Agreement, the Certificate or any other Organizational Document of the Company, any Subsidiary (or permit any Subsidiary to do the same) or the Class B Member;

(11)        merge or consolidate the Company or any Subsidiary with or into any other Person (or permit any Subsidiary to do the same) (or engage in any other transaction having substantially the same effect);

(12)        make distributions to Members other than as required in, and in accordance with, Article 8 of this Agreement;

(13)        create or permit the creation of any encumbrance on any Property or the Company’s direct or indirect interest in any Subsidiary or any other Company Asset (or permit any Subsidiary to do any of the foregoing) other than space leases entered into in the ordinary course in accordance with the terms of the Senior Loan Documents and such other encumbrances as are permitted by the terms of the Senior Loan Documents, provided, however, that the Subsidiaries may, without the consent of the Class A Member, contest mechanics’ liens as permitted by the terms of the Senior Loan Documents; and

(14)        appoint any replacement Managing Member.

Upon the declaration of a Changeover Event, the Class A Member or any Person designated by it shall have the exclusive authority to take each of the foregoing actions and make each of the foregoing decisions on behalf of the Company as it deems appropriate in its sole discretion and any requirement in this Agreement, at law or otherwise that it seek approval from or consult with the Class B Member or any other Person shall be of no force or effect.

3.7           Class B Member Affiliate Contracts. The Class B Member shall enforce in all material respects the material obligations of each counterparty to a Class B Member Affiliate Agreement. If the Class A Member shall request in writing to the Class B Member that the Class B Member enforce any material obligation of a counterparty to any Class B Member Affiliate Contract and the Class B Member shall not, promptly following receipt of such request, proceed diligently to enforce such material obligation, then the Class A Member may, in the name of the Company and/or any of its Subsidiaries, exercise any right or remedy available to the Company and/or any of its Subsidiaries under the Class B Member Affiliate Contract in question.

3.8           Cooperation. If the Managing Member is removed as Managing Member in accordance with the provisions of this Article 3 or otherwise pursuant to the terms of this Agreement, and a replacement Managing Member has been selected by the Class A Member, or if the Class A Member has elected to exercise any of the remedies set forth in Section 3.3, then, in each case, the Managing Member shall cooperate fully with the Class A Member and, to the

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extent applicable, the replacement Managing Member, and furnish all books and records and any and all other information in its possession, or reasonably obtainable by the existing Managing Member, related to the management and development of the Company and the Properties as reasonably requested by such persons.

3.9           The Class A Member’s Right to Cure Senior Loan Defaults. If the Class A Member receives notice or otherwise becomes aware of any default (i.e., an event that would constitute an “event of default” after applicable grace and cure periods) under any of the Senior Loan Documents, then, in addition to the rights of the Class A Member to fund Protective Capital pursuant to Section 6.2 below, the Class A Member shall have the right to take any such action on behalf of the Company and its Subsidiaries as is reasonably necessary to cure such default, provided that the Class A Member first provide the Class B Member with at least two (2) Business Days’ prior notice of such proposed action unless there is not sufficient time to provide such prior notice and cure such default within the applicable grace or cure period, in which case, the Class A Member shall provide the Class B Member notice of such action concurrently with taking such action.

3.10         Mortgage Loan. For the avoidance of doubt, the Class A Member and the Class B Member each hereby approve the Mortgage Loan, and authorize the execution, delivery and performance of their respective obligations under the Mortgage Loan Documents by the Mortgage Borrowers, any Subsidiary and the Company.

ARTICLE 4

RIGHTS AND DUTIES OF MEMBERS

4.1          Duties and Obligations of the Class B Member.

(a)          In addition to such duties as are described elsewhere in this Agreement, the Managing Member shall (or shall cause the applicable Property Managers to) (i) prepare and deliver to the Class A Member (or cause to be prepared and delivered to the Class A Member) the Annual Budget for each Budget Year in accordance with Section 5.3, (ii) deliver (and cause the Property Manager to deliver) to the Class A Member promptly upon its receipt, copies of all (x) summonses and complaints served on the Company, any Subsidiary or the Class B Member (as the Managing Member of the Company) which are (I) served against the Company or the Managing Member or (II) not covered by insurance or (III) reasonably expected to result in a Material Adverse Effect and (y) written notices of default on any loan or other indebtedness for borrowed money of the Company or any Subsidiary or of any judgment or attachment against any Company Asset, the Property or the direct or indirect interests of Company in the Subsidiaries that is either against the Company or in excess of $1,000,000, (iii) monitor the Company’s and the Subsidiaries’ compliance with the Senior Loan Documents (and use diligent efforts to cause their compliance with the terms thereof), mortgages (and cause their compliance with the terms thereof) and any other agreements to which the Company or any Subsidiary is bound unless any such non-compliance is not reasonably expected to be material (and taking appropriate steps on behalf of the Company to cure any non-compliance to the extent permitted under this Agreement and promptly notifying the Class A Member of any such non-compliance), and (iv) carry out its responsibilities under Section 4.2 and the other sections of this Agreement.

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(b)          In the event the Class B Member shall fail to perform or comply with, or to cause the performance of or compliance with, any obligation or duty imposed on the Managing Member pursuant to this Agreement, then, without limiting any other remedy available to the Class A Member, the Class A Member shall have the right (but not the obligation) after ten (10) Business Days’ notice to the Managing Member to perform or comply with, or cause the performance of or compliance with, such obligation, any such additional cost or expense to be reimbursed by the Company.

4.2           Prohibition of Other Activities of the Class B Member. The Class B Member agrees that it will not engage in any activity not related to the Company or invest in any venture other than the Company or possess any interest therein independently or with others. Notwithstanding the foregoing, any owner of a direct or indirect interest in the Class B Member may engage or invest in any other activity or venture or possess any interest therein independently or with others whether or not in competition with the Company or any Subsidiary. In addition, no owner of a direct or indirect interest in the Class B Member or any other Person employed by, related to or in any way affiliated with any such Person shall have, by virtue of the terms of this Agreement, any duty or obligation to disclose or offer to the Company or the Members, or obtain for the benefit of the Company or the Members, any other activity or venture or interest therein, and none of the Company, the Members, the creditors of the Company or any other Person having any interest in the Company shall have (A) any claim, right or cause of action under this Agreement against the Class B Member or any owner of a direct or indirect interest in the Class B Member or any other Person employed by, related to or in any way affiliated with any such Person, by reason of any direct or indirect investment or other participation, whether active or passive, in any such activity or venture or any interest therein or (B) any right under this Agreement to participate therein.

4.3         Limitation on Member Liability; Indemnification.

(a)          Except as otherwise expressly provided by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be the debts, obligations and liabilities solely of the Company, and no Member shall be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a Member of the Company; provided, however, that the foregoing shall not: (i) relieve the Guarantors from any liability arising under the Guarantees or the Environmental Indemnity Agreement or otherwise limit or impair the obligations of the Guarantors thereunder or (ii) have any effect on the liability of such Persons for their own willful or tortious misconduct.

(b)          In any threatened, pending or completed action, suit or proceeding, to the fullest extent permitted by law, each Member shall be fully protected, indemnified and held harmless by the Company against all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, proceedings, costs, expenses and disbursements of any kind or nature whatsoever (including, without limitation, reasonable attorneys’ fees, costs of investigation, fines, judgments and amounts paid in settlement, actually incurred by such Member in connection with the business of the Company any Subsidiary or any Property in connection with such action, suit or proceeding) (collectively, “Damages”) by virtue of its status as Member or with respect to any action or omission taken or suffered in good faith, other than liabilities and losses resulting from the fraud, gross negligence or willful misconduct of such Member; provided, however, such Member shall not be so indemnified for any acts determined by any adjudicative or arbitration procedure to be in contravention of an express term of this Agreement or in breach of its fiduciary

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duties. The indemnification provided by this Section 4.3(b) shall be recoverable only out of the assets of the Company, and no indemnity payment from funds of the Company (as distinct from funds from other sources, such as insurance) shall be payable under this Section from amounts owing to the Class A Member.

(c)          The Company shall indemnify, reimburse, defend and hold harmless the Class A Member and its Related Persons for, from and against any and all Damages of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against them, in any way relating to or arising out of the following: (i) the making of the Class A Member’s Capital Contribution, (ii) owning or holding the Class A Member’s interest, (iii) enforcing the Class A Member’s rights or remedies under this Agreement, (iv) any acts or omissions of the Class A Member (directly or through its Affiliates) as a Member or Managing Member, as applicable, or (v) any Environmental Claim resulting from any circumstance, condition, action or event first occurring after the date hereof (other than Environmental Claims arising from circumstances, conditions, actions or events first occurring after the date of the declaration of a Changeover Event and not caused by the Class B Member or an Affiliate thereof); provided, however, that neither the Class A Member nor any of its Related Persons shall have the right to be indemnified under this subsection (c) for the Class A Member’s or its Affiliates’ own gross negligence, illegal acts, fraud or willful misconduct. For purposes of this Section 4.3(c), the Company shall not be deemed to be an Affiliate of the Class A Member unless and until the Class A Member exercises control over the Company following the declaration of a Changeover Event. The provisions of and undertakings and indemnification set forth in this subsection (c) shall survive the repayment in full of all sums otherwise due the Class A Member under this Agreement or in respect of its Interest, the transfer of the entirety of the Class A Member’s Interest to unaffiliated third parties, and the termination of this Agreement or liquidation of the Company.

(d)          All obligations in this Agreement to indemnify, defend, or hold harmless the Class A Member shall survive the Transfer or redemption of the Class A Member’s Interest, and the sale or other Transfer of any Property.

4.4           Compensation of Members and their Affiliates.  No Member, nor any of their respective Affiliates, shall be entitled to compensation from the Company in connection with any matter that may be undertaken in connection with the fulfillment of its duties and responsibilities hereunder.

4.5           Use of Company Property. No Member shall make use of the property or funds of the Company, or assign its rights to specific Company property, other than for the business or benefit of the Company.

4.6           Tax Contests. The Class B Member shall give prompt notice to the Class A Member of any and all tax proceedings relating to any matters covered in Section 2.12. The Managing Member shall furnish the Class A Member with timely and reasonably detailed status reports regarding any such tax proceedings promptly after any material new development, and the Class A Member shall be given reasonable advance notice by the Managing Member so that it shall have the opportunity to participate, and permit its professional tax advisers to participate, in person in all of such tax proceedings (including prior review of submissions by the Company and any of its Subsidiaries in respect of any such tax proceedings). The Class B Member shall not to settle any such tax proceeding which would have an adverse effect on the Class A Member

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without obtaining the prior approval of the Class A Member, such approval not to be unreasonably withheld, conditioned or delayed.

4.7           Duty of the Class A Member. To the fullest extent permitted by law, the Class A Member shall have no fiduciary or other duty to any other Member or to the Company, and each other Member waives any fiduciary or other duty or claim based thereon; provided, however, that the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing. In furtherance of the foregoing, each Member acknowledges and agrees that the Class A Member shall be entitled, in granting or withholding any consent or approval or carrying out any of its rights or remedies hereunder, to consider only the interests of the Class A Member and such other factors as the Class A Member determines in its sole discretion (even if such interests are different than or at odds or in conflict with the interests of the Company or other Members) and that the Class A Member has no duty or obligation to give any consideration to any interest of, or factors affecting, the Company or the other Members; provided, however, that the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing. Whenever the Class A Member is permitted to make a determination in “good faith” or another express standard, the Class A Member shall act under such express standard and shall not be subject to any other or different standard imposed by any other relevant provision of law or otherwise. Whenever the Class A Member is permitted to consent, withhold consent, approve, withhold approval or to take any other action under the terms of this Agreement, it may do so in its sole and absolute discretion and judgment unless this Agreement expressly states otherwise, and any approval or consent of the Class A Member shall not be effective unless given in writing. The Class B Member acknowledges and agrees that the Class A Member and/or any owner of a direct or indirect interest in the Class A Member may engage or invest in any other activity or venture or possess any interest therein independently or with others whether or not in competition with the Company or any Subsidiary notwithstanding any provision to the contrary at law or in equity. Neither the Class A Member nor any owner of a direct or indirect interest in the Class A Member or any other Person employed by, related to or in any way affiliated with any such Person shall have any duty or obligation to disclose or offer to the Company or the Members, or obtain for the benefit of the Company or the Members, any other activity or venture or interest therein, and none of the Company, the Members, the creditors of the Company or any other Person having any interest in the Company shall have (A) any claim, right or cause of action against the Class A Member or any owner of a direct or indirect interest in the Class A Member or any other Person employed by, related to or in any way affiliated with any such Person, by reason of any direct or indirect investment or other participation, whether active or passive, in any such activity or venture or any interest therein or (B) any right to participate therein.

ARTICLE 5

BOOKS AND RECORDS; ANNUAL REPORTS; EXPENSES AND OTHER MATTERS

5.1           Books of Account. At all times during the continuance of the Company, the Class B Member (in its capacity as Managing Member) shall keep or cause to be kept true and complete books of account in which shall be entered fully and accurately each transaction of the Company. Such books shall be kept on the basis of the Fiscal Year in accordance with the accrual method of accounting, and shall reflect all Company transactions in accordance with generally accepted accounting principles prevailing in the United States of America.

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5.2           Availability of Books of Account. All of the books of account referred to in Section 5.1, together with an executed copy of this Agreement and the Certificate, and any amendments thereto, shall at all times be maintained at the principal office of the Company or such other location as the Managing Member may propose and the Class A Member shall approve, and upon reasonable advance written notice to the Managing Member, shall be open to the inspection and examination of each other Member or its representatives during reasonable business hours.

5.3           Annual Reports and Statements; Annual Budgets. (a) The Class B Member (in its capacity as Managing Member) shall provide to each other Member, copies of all quarterly and annual financial statements and other financial reports delivered to the Mortgage Lender concurrently with the delivery of such reports to the Mortgage Lender, it being agreed that the foregoing shall include financial statements and other financial reports presenting the financial results and other information for the Company and its Subsidiaries on a consolidated basis. In addition, the Class B Member (in its capacity as Managing Member) shall send to each Member (i) all other material written notices, reports and other material information required to be delivered by the Subsidiaries under any of the Senior Loan Documents concurrently with the delivery of such materials to the applicable Senior Lender(s), (ii) all completed IRS Forms 1099 for the review and approval of the Managing Member and the Class A Member no later than ten (10) days prior to the due date of such Schedules, but in no event later than February 15 of each year in draft form and February 28 of each year in final form and (iii) such other information concerning the Company and reasonably requested by any Member as is necessary for the preparation of such Member’s federal, state and local income or other tax returns.

(b)          The Managing Member has submitted an Annual Budget for the remainder of the 2015 Budget Year to the Class A Member at least thirty (30) days prior to the Effective Date. Not later than (i) December 1, 2015, the Managing Member shall prepare or cause to be prepared the Annual Budget with respect to the 2016 Budget Year, and (ii) not later than December 1 of the prior Budget Year with respect to each subsequent Budget Year, the Managing Member shall prepare for the Company for the Budget Year in question, the Annual Budget for the Company. The Class A Member shall not have the right to approve any proposed Annual Budget; provided that the Class B Member shall promptly respond to any inquiries made, or additional information requested, by the Class A Member with respect to each proposed Annual Budget.

(c)          The Company shall cause the Company’s independent accountants to prepare (under the oversight of the Managing Member), on an accrual basis, all federal, state and local tax returns required to be filed by the Company or any Subsidiary, and shall cause each Subsidiary to file all such returns and other reports that it is required by law to file. The Company shall prepare or cause to be prepared all required returns as if the Company and the Subsidiaries named in the return in a manner consistent with Section 2.12.

5.4           Class A Member’s Expenses. The Company covenants and agrees to reimburse the Class A Member upon receipt of written notice from the Class A Member for all reasonable out-of-pocket expenses incurred by the Class A Member (including reasonable attorneys’ fees and other legal expenses) in connection with (A) the negotiation, preparation, execution, delivery and administration of any consents, amendments, waivers or other modifications to this Agreement and the other Transaction Documents and any other documents or matters requested by the Class B Member; (B) enforcing or preserving any rights, in response to third party claims or the prosecuting or defending of any action or proceeding or other litigation in each case

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against, under or affecting the Class B Member, the Company, any Subsidiary, this Agreement, the other Transaction Documents or the Collateral or any Property; (C) enforcing any obligations of or collecting any payments due from the Class B Member or the Company under this Agreement, the other Transaction Documents or with respect to any Property (including any modification, restructuring or “work out” related to the Transaction Documents or the obligations thereunder); and (D) any insolvency or bankruptcy proceedings.

5.5           Cash Management Account. Concurrently herewith, the Managing Member has opened an interest bearing account (the “Cash Management Account”) with Wells Fargo Bank, National Association (or such other banking institution as the Class A Member may select hereafter; the “Cash Management Bank”). The Company shall cause all cash allowed to be distributed to the Company pursuant to the Senior Loan Documents and available after payment of rent by the TRS as required under the Operating Leases to be deposited in the Cash Management Account on the first Business Day that such distribution would be allowed under the Senior Loan Documents; provided that (i) the Class A Member acknowledges that cash attributed under the Senior Loan Documents to ARC Hospitality Stratford, LLC or ARC Hospitality TRS Stratford, LLC will not be distributed to the Company, and (ii) the Class B Member acknowledges that any Company expenses attributable to ARC Hospitality Stratford, LLC or ARC Hospitality TRS Stratford, LLC shall be borne solely by the Class B Member. The Company may not establish or maintain any other bank accounts, securities accounts or other accounts without the prior approval of the Class A Member (which approval, among other things, may be expressly conditioned on appropriate cash management agreements in favor of the Class A Member). Amounts on deposit in the Cash Management Account shall be distributed in accordance with Sections 8.1 and 8.4.

(a)          Pursuant to the terms of the Cash Management Agreement (and any substitute or additional cash management agreement for any substitute or additional Company accounts) , (i) until the declaration of a Changeover Event, the Class B Member shall have control over, and the sole right to withdraw funds from, the Cash Management Account (and any substitute or additional Company accounts), and (ii) following the declaration of a Changeover Event, the Class A Member shall have control over, and the sole right to withdraw funds from, the Cash Management Account (and any substitute or additional Company accounts).

(b)          All reasonable costs and expenses for establishing and maintaining the Cash Management Account shall be paid by the Company. All interest on the Cash Management Account shall be added to and become a part of the Cash Management Account and shall be disbursed in the same manner as other monies deposited in the Cash Management Account. The Class A Member shall not be liable for any loss sustained on the investment of any funds in accordance with this Agreement.

5.6          Plan Assets. Neither the Company nor any of its Affiliates shall at any time (a) hold any Plan Assets; (b) maintain or contribute to, or agree to maintain or contribute to, or permit any ERISA Affiliate to maintain or contribute to or agree to maintain or contribute to, or permit any ERISA Affiliate to maintain or contribute to or agree to maintain or contribute to, any employee benefit plan subject to Title IV or Section 302 of ERISA or Section 312 of the Code; or (c) engage in a non-exempt prohibited transaction described in Section 406 of ERISA or Section 4975 of the Code, as such sections relate to the Company and its Affiliates, or in any transaction that would cause any obligation or action taken or to be taken hereunder or under the Transaction Documents to be a non-exempt prohibited transaction under ERISA.

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5.7           Insurance.  (a)  The Company shall cause each Subsidiary to keep the Properties it owns insured at all times with the coverage and in the amounts required hereunder against loss or damage by fire and against loss or damage by other risks and hazards covered by a standard extended coverage insurance policy (including, without limitation, riot and civil commotion, vandalism, malicious mischief, burglary and theft on the “Special Form” (formerly an “All Risk” form)). Such insurance shall be in an amount (i) equal to at least the full replacement cost of the improvements, furniture, fixtures and equipment owned by such Subsidiaries (exclusive of the cost of foundations and footings), without deduction for physical depreciation, (ii) such that the insurer would not deem any Subsidiary a co-insurer thereunder and (iii) at least equal in type and amount to the types of coverage and amounts required by the lender in any of the Senior Loan Documents.

(b)          The Company will maintain the insurance policies described in Section 5.1 of the Mortgage Loan Agreement whether or not the Mortgage Loan Documents remain in effect.

5.8          Casualty/Condemnation. (a) In the event of any Casualty or Condemnation requiring notice to the Mortgage Lender, the Company shall give prompt notice thereof to each of the Managing Member and the Class A Member. Subject to the terms of any of Senior Loan Documents, the Managing Member may settle and adjust any claims and the reasonable expenses incurred by them in the adjustment and collection of such proceeds shall be reimbursed by the Company upon request therefor.

(b)          Notwithstanding anything to the contrary contained herein, if the Company or any of its Subsidiaries is required under the terms of the Senior Loan Documents to restore any Property, then the Company and the Subsidiaries shall be entitled to apply the insurance proceeds or the condemnation awards from the casualty or condemnation affecting such Property to such restoration in accordance with the Senior Loan Documents.

5.9          Existence; Compliance with Legal Requirements. The Company shall cause each Subsidiary to do or cause to be done all things necessary to preserve, renew and keep in full force and effect its existence as a limited liability company and all rights, licenses, permits, franchises and other agreements necessary for the continued use and operation of its business, and shall comply with all Legal Requirements and Insurance Requirements applicable to each Subsidiary and each Property in each case in accordance with the provisions of the Senior Loan Documents. In addition, and whether or not required by law, the Company shall cause each Subsidiary at all times to maintain, preserve and protect all of the Properties to the extent necessary for the continued conduct of its business and maintain the Properties in a condition at least as good as that on the date hereof except for reasonable wear and use, and from time to time make, or cause to be made, all reasonably necessary repairs, renewals, replacements, betterments and improvements thereto, or, in each case, such higher standard as required under any applicable franchise license agreement entered into by any Subsidiary in each case in accordance with the provisions of the Senior Loan Documents.

5.10        Impositions and Other Claims. The Company shall and shall cause each Subsidiary to pay and discharge, or cause to be paid or discharged, all taxes, assessments and governmental charges levied upon it, its income and assets as and when such taxes, assessments and charges are due and payable (including, without limitation, all impositions), as well as all lawful claims for labor, materials and supplies or otherwise, which could become a lien or encumbrance on any of its assets, subject to any rights to contest permitted under the Senior Loan

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Documents. The Company shall not permit or suffer (and shall cause the Subsidiaries not to permit or suffer) to exist any Lien on any Property, the Company’s direct or indirect interest in the Subsidiaries or any other Company Asset, other than Permitted Encumbrances (as defined in the Senior Loan Documents) or the security interest of the Class A Member in the Cash Management Account; provided, however, that the Subsidiaries may, without the consent of the Class A Member, contest mechanics’ liens as permitted by the terms of the Senior Loan Documents. If a Lien is imposed on a Property due solely to Senior Lender’s failure to pay taxes that, under the Senior Loan Documents, the Senior Lender is obligated to pay and for which sufficient funds in the Senior Loan tax reserve are available, the imposition of such Lien will not constitute a breach of this covenant or a Changeover Event.

5.11         Litigation. The Managing Member shall give prompt written notice to the Class A Member of any litigation or governmental proceedings pending or threatened (in writing) against the Company, the Class B Member, any Guarantor or any Subsidiary of which it has actual knowledge which, if determined adversely to such Person, could reasonably be expected to have a Material Adverse Effect.

5.12         Access to Properties. The Company shall, and shall cause each Subsidiary to, permit agents, representatives and employees of the Class A Member or its Affiliates to inspect all of the Properties or any part thereof and the books and records of the Company and each Subsidiary at any time and from time to time as may be requested by the Class A Member or such Affiliates.

5.13         Notice of Default. The Managing Member shall promptly advise the Class A Member of any change in the condition, financial or otherwise, of the Company, any Guarantor or any Subsidiary which has had or is reasonably expected to have any Material Adverse Effect, or of the occurrence to the best of the Managing Member’s knowledge of the occurrence of any Changeover Event or of any event that, with the giving of notice of the passage of time, could become a Changeover Event.

5.14        Intentionally Omitted.

5.15        Conduct of Business.

(a)          The Class B Member, the Company and each Subsidiary shall conduct their respective affairs in accordance with each of the covenants and restrictions set forth on Schedule 5.15(a) (which schedule is hereby incorporated into and made a part of this Agreement) and neither the Company nor the Class B Member shall take any action or refrain from taking any action (or permit any Subsidiary to take any action or refrain from taking any action), inconsistent with the foregoing.

(b)          The Company and the Class B Member agree to the representations, warranties and covenants set forth in Schedule 5.15(b).

5.16        Standard of Operation. Subject to Section 3.6 and the terms of the Senior Loan Documents, the Company shall operate or cause to be operated the Properties at all times in a manner consistent with at least the standard of operation of the Properties as of the Effective Date (or, if greater, in accordance with the terms of the applicable franchise license agreements entered into by any Subsidiary).

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5.17         No Sales of Assets. Without the prior written consent of the Class A Member, the Company will not, and will not enter into any agreement or option to, sell, transfer, assign or otherwise dispose of any of the Company’s interests in any Company Asset including any direct or indirect interest in any Subsidiary or any Property (excluding transfers of immaterial items of personal property in the ordinary course of business), nor will it permit any Subsidiary to, or to enter into any agreement or option to, sell, transfer, assign or otherwise dispose of any Property (excluding transfers of immaterial items of personal property in the ordinary course of business), except (i) for all-cash consideration and (ii) in an amount that would, after taking into account any amounts payable under the Senior Loan Documents, result in the Company receiving an amount equal to or greater than such Property’s Release Payment, unless the Redemption Price is paid in full.

5.18         Compliance with Senior Loans. At all times, whether or not the Senior Loans remain outstanding, the Managing Member and the Company shall comply, and cause each Subsidiary and Property Manager that is an Affiliate of the Class B Member to comply with all provisions of the Senior Loan Documents.

5.19         Intentionally Omitted.

5.20         Prohibited Persons. The Class B Member shall not permit the Company or any Subsidiary to: (i) conduct any business, nor engage in any transaction or dealing, with any Prohibited Person, including, but not limited to, the making or receiving of any contribution of funds, goods, or services, to or for the benefit of a Prohibited Person; or (ii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set in Executive Order.

5.21         Forgiveness of Debt. None of the Company, the Class B Member or any Subsidiary shall cancel or otherwise forgive or release any material claim or debt owed to it by any Person, except for adequate consideration or in the ordinary course of its business.

ARTICLE 6

CAPITAL CONTRIBUTIONS,

LOANS AND LIABILITIES

6.1           Initial Capital Contributions of the Members. Each of the Members is hereby deemed to have made initial contributions to the Company (the “Initial Capital Contributions”) and to have Percentage Interests as set forth in Schedule 6.1. The limited liability company interests issued to each Equity Member pursuant to this Agreement have been duly authorized and are validly issued limited liability company interests.

6.2           Protective Capital/Additional Capital. In the event that the Company has insufficient cash on hand (i) to pay debt service owing pursuant to any of the Senior Loan Documents or to cure or avoid a default under any of the Senior Loan Documents (including to make any repairs or replacements, capital improvements or other expenditures required under the Senior Loan Documents), (ii) to pay real estate taxes, insurance premiums or ground rents, or (iii) to make any expenditures (including, without limitation, to fund the costs of any environmental remediation) or other disbursements to third parties that are necessary to preserve or protect any of the Properties or the Company’s direct or indirect interest therein (any additional

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funds required for purposes of funding any of the foregoing items are referred to herein as “Protective Capital”), the Class B Member shall contribute to the Company additional capital, in cash, in an amount sufficient to enable the Company to meet the obligation giving rise to such need on a timely basis, in which event sums so contributed shall be treated as an additional Capital Contribution. If the Class B Member fails to contribute such Protective Capital within the applicable time period set forth in paragraph (b) below after the Class A Member gives the Class B Member written notice that it has reasonably determined that the Company is in need of such additional capital, then, subject to the limitations set forth in paragraph (b) below, the Class A Member shall have the right, power and authority, but not the obligation, to make such payments on the Company’s behalf and, notwithstanding the limitations set forth in Article 3, to take any other actions reasonably related thereto in the Company’s name and on the Company’s behalf to fulfill the purpose for which the Protective Capital was needed, and the amount of any advance made by the Class A Member, together with any expenses incurred by the Class A Member in connection therewith (collectively, the “Class A Member Protective Advance”), shall constitute an additional Capital Contribution by the Class A Member, which shall be returned in full (together with a return thereon at the Increased Rate) prior to any distributions to the Class B Member. The provisions of this Agreement, including this Section 6.2, are intended to benefit the Members and, to the fullest extent permitted by law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor of the Company shall be a third-party beneficiary of this Agreement).

(a)          The Class A Member shall not be entitled to make any Protective Capital contribution unless it has first given the Class B Member at least five (5) Business Days’ prior written notice of its intention to make the contribution (which notice will specify the amount of the proposed contribution and the purpose for which the contribution is being made), provided, however, that the Class A Member may make a Protective Capital contribution upon one (1) day’s prior notice to the Class B Member in the case of an emergency (e.g., an expense necessary to prevent the incurrence by the Company or any Subsidiary of penalties or late fees or a default under the Senior Loan Documents, to prevent other imminent material harm to the Company, the Subsidiaries or the Properties or to preserve human health and/or safety), or with such shorter or no prior notice (but subsequent notice of such emergency and the Protective Capital contribution relating thereto as soon as possible thereafter) to the extent that one (1) day’s notice would jeopardize the ability of the Class A Member to respond to the emergency. The Class B Member shall contribute to the Company funds necessary to enable the Company to reimburse the Class A Member for any such emergency contribution within five (5) days after receipt of notice that the contribution was made, together with interest thereon at the Increased Rate until repaid.

(b)          Notwithstanding anything to the contrary herein, the Class A Member shall not be required under any circumstance to contribute additional capital or other amounts to the Company and no other Member shall be required to contribute additional capital except as set forth in this Section 6.2. Following the occurrence of a Changeover Event, the Class A Member shall be entitled to fund additional Capital Contributions from time to time as necessary to manage, operate, finance and sell the Company and its Subsidiaries and the Properties, as determined by the Class A Member in its sole and absolute discretion.

6.3           Application of Capital. The Class B Member shall take such actions as are reasonably necessary on behalf of the Company and/or any of its Subsidiaries to disburse the proceeds of any Capital Contributions or Protective Capital for the purposes for which the funds were contributed.

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6.4           Capital of the Company. Except as expressly provided for in this Agreement, no Member shall be entitled to withdraw or receive any interest or other return on, or return of, all or any part of its Capital Contribution, or to receive any Company Assets (other than cash) in return for its Capital Contribution. The Class A Member shall not be entitled to make a Capital Contribution to the Company except as expressly authorized or required by this Agreement.

ARTICLE 7

INTENTIONALLY OMITTED

ARTICLE 8

APPLICATIONS AND DISTRIBUTIONS
OF AVAILABLE CASH; REDEMPTION

8.1          Distributions of Cash. The Managing Member shall cause the Company to distribute all Available Cash (other than Net Sales Proceeds, Net Disposition Proceeds, Net Financing Proceeds and the QCR Redemption Amount, which shall be distributed in accordance with Section 8.4) monthly on each Scheduled Distribution Date as follows:

(1)         First, 100% to the Class A Member until it has received payment of the unpaid Increased Return, if any, and then any other Class A Return, if any, for any Accrual Periods ending on or prior to such Scheduled Distribution Date;

(2)         Second, 100% to the Class A Member until it has received payment of all Protective Capital contributed by the Class A Member plus, to the extent not returned under clause (i), the Increased Return thereon calculated from the date such contribution was made until repaid in full;

(3)         Third, if a Changeover Event has occurred, 100% to the Class A Member until the Class A Member has received in full the Redemption Price as of such Scheduled Distribution Date; and

(4)         Fourth, all remaining cash flow may be distributed to the Class B Member or, if the Class A Member has purchased the Interest of the Class B Member pursuant to Section 3.4, shall be distributed to the Class A Member.

(b)          The unavailability of cash to pay in full the amounts due to the Class A Member shall not excuse the Company’s obligation to pay such amounts, which shall be an unconditional obligation.

(c)          Notwithstanding the foregoing, if the Sellers shall at any time be obligated to pay any Second Pool Offset Amounts (as such term is defined in the Sale Agreement), then the Company shall pay such obligation to the Class B Member from amounts which would otherwise be distributed to the Class A Member (but any such payment shall nonetheless constitute distribution(s) to the Class A Member for purposes of this Agreement).

8.2           Sales; Financings; Qualified Capital Raises.

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(a)          In the event of a sale, transfer, assignment or other disposition of any Property by any Subsidiary or of any of the Company’s direct or indirect interests in any Property or any Subsidiary, as applicable, the net proceeds to the Company (taking into account amounts paid to the Senior Lender pursuant to the Senior Loan Documents) from such sale, transfer, assignment or other disposition after deduction of reasonable third-party costs approved by the Class A Member (such proceeds, the “Net Sale Proceeds”), shall be distributed as provided in Section 8.4.

(b)          In the event of (i) the Company or any of its Subsidiaries incurs any Additional Mezzanine Loans or (ii) there is a refinancing of any of the Senior Loans, then the net proceeds to the Company (taking into account amounts paid to the Senior Lender pursuant to the Senior Loan Documents) from such financing or refinancing, as applicable, after deduction of all reasonable third-party costs approved by the Class A Member (such net proceeds, the “Net Financing Proceeds”), shall be distributed as provided in Section 8.4.

(c)          In the event of the occurrence of any Qualified Capital Raise during any calendar month, the Class B Member shall cause an amount equal to the QCR Redemption Amount for such Qualified Capital Raise (together with an accounting of all Qualified Capital Raises that occurred during such month) to be contributed to the Company by no later than the fifth (5th) day of the next calendar month (or the next Business Day if such 5th day is not a Business Day) and the Company shall immediately distribute such amount as provided in Section 8.4.

8.3          Redemption Right.

(a)          On any date from and after the Effective Date, the Class B Member shall have the right, on ten (10) days’ prior written notice to the Class A Member, to redeem all or any portion of the Class A Member’s Interest in the Company at a price equal to the Redemption Price as of such date (or, in the case of a redemption in part, the amount being so redeemed in an amount no less than $1,000,000, together with the amounts described in clauses (ii), (iii) and (iv) of the definition of “Redemption Price” contained herein), provided, however, that if a Changeover Event has been declared, then such redemption right may only be exercised until the earliest to occur of (i) in the case of a Changeover Event only, the completion of the “buy/sell” procedure described in Section 3.4 and (ii) the occurrence of a Bankruptcy with respect to the Company, the Class B Member or any Subsidiary (and after the first to occur of any of these events, neither Company nor the Class B Member shall have any right to redeem the Class A Member).

(b)          Upon any closing of a redemption of one hundred percent (100%) of the Class A Member’s Interest permitted hereunder, and assuming that the Company has paid in full the Redemption Price and any and all fees and expense reimbursements then owing to the Class A Member and any of their Affiliates or designees, the Class A Member shall assign its Interest to the Class B Member or its designee without recourse and without representation or warranty other than that it owns the Interest and the same has not been transferred, pledged or otherwise encumbered (other than such encumbrances as are being released or terminated concurrently with such transfer).

8.4          Distribution of Capital Event Proceeds. Net Sale Proceeds, Net Disposition Proceeds, Net Financing Proceeds and the QCR Redemption Amount shall be distributed immediately upon receipt as follows:

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(1)         First, 100% to the Class A Member until it has received payment of the unpaid Increased Return, if any, and then any other Class A Return, if any, for any Accrual Periods ending on or prior to such date;

(2)         Second, 100% to the Class A Member until it has received payment of all Protective Capital contributed by the Class A Member plus, to the extent not returned under clause (1), the Increased Return thereon calculated from the date such contribution was made until repaid in full;

(3)         Third, 100% to the Class A Member until the Class A Member has received: (i) in the event the Capital Event in question is a refinancing of any of the Senior Loans, the full Redemption Price as of the date such distribution is made, (ii) in the event the Capital Event in question is a sale of one of more of the Properties (or any indirect interest therein), the full Release Payments for such Properties (or such indirect interest, as applicable), (iii) in the case of a distribution of the QCR Redemption Amount in respect of any Qualified Capital Raise, such QCR Redemption Amount, and (iv) in the event of any other Capital Event, all of the Capital Event Proceeds from such other Capital Event (but, in the event such Capital Event only affects certain Properties (as opposed to all Properties), only in an amount up to the Release Payment for such Property), which distribution pursuant to this clause (3) shall be considered a return of, and reduce, the Class A Member’s Unrecovered Capital;

(4)         Fourth, if a Changeover Event has occurred, 100% to the Class A Member until the Class A Member has received in full the Redemption Price as of the date such distribution is made; and

(5)         Fifth, 100% to the Class B Member or, if the Class A Member has purchased the Interest of the Class B Member pursuant to Section 3.4, 100% to the Class A Member.

8.5         Distribution After Changeover Event. Notwithstanding anything to the contrary herein, in no event will the Class B Member receive or be entitled to receive distributions or other amounts from the Company or any Subsidiary after a Changeover Event has occurred until the Class A Member has received all sums due it hereunder including the Redemption Price, and thereafter all sums shall be payable to the Class B Member.

ARTICLE 9
 

TRANSFER OF COMPANY INTERESTS

9.1         Restrictions on Transfers by the Class B Member.  

(a)         Except as expressly permitted by the rules set forth in Section 9.1(b) (any such permitted transfers, “Permitted Transfers”), the Class B Member may not Transfer, nor permit the Transfer of, all or any of its Interest to any Person and no Person owning any direct or indirect legal, beneficial or other interest in the Class B Member may Transfer, or permit the Transfer, of such interest, in each case without the Class A Member’s prior written consent.

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(b)         The direct or indirect transfer of membership interests in the members of the Class B Member by which, in a single transaction or a series of transactions, in the aggregate, not more than forty-nine percent (49%) of the direct and indirect membership interests in any member of the Class B Member shall be vested in parties not having an ownership interest as of the date hereof shall constitute a Permitted Transfer if (i) such Transfer constitutes a Qualified Capital Raise pursuant to the terms hereof, (ii) such Transfer does not violate the terms of the Senior Loan Documents, (iii) except for Transfers of direct or indirect interests in ARC OP, no Changeover Event has occurred and remains uncured, (iv) the Company and the Subsidiaries continue to be in compliance with the single purpose covenants set forth in Schedule 5.15(a), (v) except for Transfers of direct or indirect interests in ARC OP, the Class A Member receives not less than ten (10) days’ prior written notice of such proposed transfer, and (vi) following such Transfer, the Class B Member continues to be Controlled, directly or indirectly, by ARC OP, ARC OP continues to be Controlled, directly or indirectly by the REIT, and the REIT continues to be Controlled, directly or indirectly, by AR Capital, LLC.

9.2         Transfers by the Class A Member.

(a)          Until the occurrence of a Changeover Event (the date of such occurrence, “Lockout Expiration Date”), (i) the Class A Member shall not Transfer all or any portion of its Interest without the consent of the other Member, (ii) Whitehall Street shall own greater than fifty percent (50%) of the direct or indirect membership interests in the Class A Member, and (iii) GS Group shall continue to, directly or indirectly, Control the Class A Member, provided that (x) no transfer of any direct or indirect interest in the Class A Member (other than transfers of direct and/or indirect interests in Whitehall Street) shall be permitted until the date which is two hundred seventy (270) days following the date hereof and (y) following such 270-day period, any transfer of direct or indirect non-Controlling interests in the Class A Member (other than transfers of direct and/or indirect interests in Whitehall Street) shall be subject to the consent of the Class B Member, not to be unreasonably withheld, delayed or conditioned; it being agreed that the Class B Member shall not be deemed to have acted unreasonably if it withholds its consent to any transfer of direct or indirect non-Controlling interests in the Class A Member to a competitor of the Class B Member or any of its Affiliates. Following the Lockout Expiration Date, the Class A Member may, from time to time and without the consent or approval of any other Member, Transfer all or any portion of its Interest to any Person so long as such Transfer does not violate the terms of the Senior Loan Documents (or if such Transfer would violate the terms of the Senior Loan Documents, the Class A Member has received consent thereto from the Senior Lender), and no change in Control or direct or indirect ownership of the Class A Member shall constitute a breach or a default hereunder. Notwithstanding the foregoing, (x) the Class A Member shall be entitled to Transfer all or any portion of its interest, and transfers of direct or indirect interests in the Class A Member shall be permitted, in either such case, if required by applicable law or regulation, and (y) Transfers of preferred stock issued by W2007 Grace Acquisition I, Inc. and/or W2007 Equity Inns Statutory Trust I shall be permitted at any time without the consent of the Class B Member.

(b)          The Class B Member shall cooperate (and cause each Guarantor to cooperate) in any Transfer by the Class A Member of its Interest, including by executing amendments to this Agreement or any other Transaction Document so long as any such amendment does not alter any of the economic terms of any such agreement.

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9.3           Assignment Binding on Company. No Transfer of all or any part of the Interest of a Member otherwise permitted to be made under this Agreement shall be binding upon the Company unless and until a duplicate original of the assignment agreement or other instrument of transfer, duly executed and acknowledged by the assignor or transferor, has been delivered to the Company, and such instrument evidences (i) the written acceptance by the assignee of all of the terms and provisions of this Agreement, (ii) the assignee’s confirmation of the accuracy of each of the representations and warranties set forth in Section 2.10 (in the case of an assignment by the Class B Member) and the assignee’s representation that such assignment was made in accordance with all applicable laws and regulations and (iii) the consent to the Transfer of the Interest required pursuant to Section 9.1, if any. In addition, the Class A Member, in its discretion and as a condition precedent to such Person becoming a transferee, also may require any Person to whom a Transfer may be made pursuant to this Article 9 to make certain reasonable and customary representations, warranties and covenants solely to evidence compliance with U.S. federal and state securities laws including, but not limited to, representations as to its net worth, sophistication and investment intent.

9.4          Bankruptcy of a Member. To the fullest extent permitted by law, the Company shall not be dissolved or terminated solely by reason of the Bankruptcy, removal, withdrawal, dissolution or admission of any Member.

9.5          Substituted Members.  

(a)          Any Member that assigns all of its Interests pursuant to an assignment or assignments permitted under this Agreement shall cease to be a Member of the Company except that unless and until a Substituted Member is admitted in its stead, the assigning Member shall not cease to be a Member of the Company under the Act and shall retain the rights and powers of a member under the Act and hereunder, provided that such assigning Member may, prior to the admission of a Substituted Member, assign its economic interest in its Interest, to the extent otherwise permitted under this Article 9. Any Person who is an assignee of any portion of the Interest of a Member pursuant to an assignment satisfying the requirements of this Article 9 shall become a Substituted Member only when (i) the Managing Member has entered such assignee as a Member on the books and records of the Company, which the Managing Member is hereby directed to do upon satisfaction of such requirements, and (ii) such assignee has paid all of the Company’s reasonable legal fees and filing costs in connection with the substitution as a member. Any assignee who acquires an interest in the Company by operation of law (but which acquisition is or would have been prohibited by this Article 9) shall not become a Substituted Member under any circumstance.

(b)          Any Person who is an assignee of any of the Interest of a Member pursuant to an assignment satisfying the requirements of this Article 9 but who does not become a Substituted Member (or pursuant to an assignment by operation of law, who shall not become a Substituted Member) and desires to make a further assignment of any such Interest, shall be subject to all the provisions of this Article 9 to the same extent and in the same manner as any Member desiring to make an assignment of its Interest.

9.6           Acceptance of Prior Acts. Any person who becomes a Member, by becoming a Member, accepts, ratifies and agrees to be bound by all actions duly taken pursuant to the terms and provisions of this Agreement by the Company or any of its members prior to the date such Person became a Member and, without limiting the generality of the foregoing, specifically

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ratifies and approves all agreements and other instruments as may have been executed and delivered on behalf of the Company prior to said date and which are in force and effect on said date.

9.7           Additional Limitations. Notwithstanding anything contained in this Agreement, no Transfer by the Class B Member shall be made unless (i) registration is not required under the Securities Act in respect of such Transfer; (ii) such Transfer does not violate any applicable federal or state securities, real estate syndication, or comparable laws; (iii) such Transfer will not be subject to, or such Transfer, when aggregated with prior Transfers in accordance with applicable law will not result in the imposition of, any state, city or local transfer taxes, including, without limitation, any transfer gains taxes, unless such assignor pays such taxes; and (iv) such Transfer will not cause the Company to be treated as a “publicly-traded partnership” within the meaning of Section 7704 of the Code. The Class A Member may elect prior to any Transfer by the Class B Member to require an opinion of counsel, or in the case of an indirect Transfer of a portion of the Class B Member’s Interest, other reasonable legal assurance with respect to any of the foregoing matters.

9.8          Restraining Order; Specific Performance; Other Remedies.

(a)          If the Class B Member shall attempt (or any holder of a direct or indirect interest in the Class B Member attempts) to Transfer all or any portion of its interest in the Company in violation of any of the provisions of this Agreement, the Class A Member, in addition to all rights and remedies hereunder, at law and/or equity, shall be entitled to seek a decree or order restraining and enjoining such Transfer and the Class B Member shall not plead in defense thereto that there would be an adequate remedy at law; it being hereby expressly acknowledged and agreed that damages at law shall be an inadequate remedy for a breach or threatened breach or violation of the provisions concerning Transfers set forth in this Agreement.

(b)          It is expressly agreed that the remedy at law for breach of any of the obligations relating to Transfers set forth in this Article 9 and elsewhere in this Agreement is inadequate in view of:

(1)         The complexities and uncertainties in measuring the actual damages that would be sustained by reason of the failure of a party to comply fully with each of said obligations; and

(2)         The uniqueness of each Member’s business and assets and the relationship of the Members.

Accordingly, each of the aforesaid obligations shall be, and is hereby expressly made, enforceable by specific performance.

ARTICLE 10
 

DISSOLUTION OF THE COMPANY;
WINDING UP AND DISTRIBUTION OF ASSETS

10.1        Dissolution.  

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(a)          The Company shall be dissolved and its affairs shall be wound up only upon the first to occur of the following:

(1)         so long as the Senior Obligations have been repaid in full, the joint written direction of the Managing Member and the Class A Member;

(2)         the entry of a decree of judicial dissolution under Section 18-802 of the Act; or

(3)         the termination of the legal existence of the last remaining Member of the Company or the occurrence of any other event which terminates the continued membership of the last remaining Member in the Company unless the business of the Company is continued in a manner permitted by this Agreement or the Act. Upon the occurrence of any event that causes the last remaining member of the Company to cease to be a member of the Company, to the fullest extent permitted by law, the personal representative of such member is hereby authorized and directed to, and shall, within ninety (90) days after the occurrence of the event that terminated the continued membership of such member in the Company, agree in writing (i) to continue the Company and (ii) to the admission of the personal representative or its nominee or designee, as the case may be, as a substitute Member of the Company, effective as of the occurrence of the event that terminated the continued membership of the last remaining Member.

(b)          No Member shall have the right to (i) withdraw or resign as a Member of the Company, (ii) redeem or otherwise require redemption of its limited liability company interest in the Company or any part thereof or (iii) to the fullest extent permitted by law, dissolve itself voluntarily.

(c)          Notwithstanding any other provision of this Agreement, the Bankruptcy of any of the Members shall not cause such Member to cease to be a Member of the Company and upon the occurrence of such an event, the business of the Company shall continue without dissolution.

(d)          Notwithstanding any other provision of this Agreement, each Member waives any right it might have under Section 18-801(b) of the Act to agree in writing to dissolve the Company upon the Bankruptcy of any of the Members, or the occurrence of an event that causes any of the Members to cease to be a Member of the Company.

10.2        Winding Up.  

(a)           In the event of the dissolution of the Company pursuant to Section 10.1(a), the Managing Member and the Class A Member, acting together may wind up the Company’s affairs.

(b)          Upon dissolution of the Company and until the filing of a certificate of cancellation as provided in the Act, the Class A Member and the Managing Member, or a liquidating trustee, as the case may be, may, in the name of, and for and on behalf of, the Company, prosecute and defend suits, whether civil, criminal or administrative, gradually settle and close the Company’s business, dispose of and convey the Company’s property, discharge or make reasonable provision for the Company’s liabilities, and distribute to the Members in

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accordance with Section 10.3 any remaining assets of the Company, all without affecting the liability of Members and without imposing liability on any liquidating trustee.

(c)          Upon the completion of winding up of the Company, the Class A Member and the Managing Member, or a liquidating trustee, as the case may be, shall file a certificate of cancellation in the Office of the Secretary of State of the State of Delaware as provided in the Act and any other similar certificates of cancellation or termination required to discontinue its status as a legal entity or its authorization to do business in New York or any other relevant jurisdiction. The existence of the Company as a separate legal entity shall continue until cancellation of the Certificate as provided in the Act.

10.3        Distribution of Assets. Upon the winding up of the Company, the assets shall be distributed as follows:

(1)         to the satisfaction of debts and liabilities of the Company (whether by payment or the making of reasonable provision for payment thereof), in order of priority as provided by law, other than debts and liabilities owed to Members, including to the payment of expenses of the liquidation and to the setting up of any reserves that the Class A Member and the Managing Member, or the liquidating trustee, as the case may be, shall determine are reasonably necessary for any contingent, conditional or unmatured liabilities or obligations of the Company;

(2)         to the Class A Member until the Class A Member has received all Increased Return then due and payable and then all Unrecovered Capital;

(3)         to the satisfaction of debts and liabilities of the Company owed to Members; and

(4)         to the Class B Member or to the Class A Member if the Class A Member has purchased the Interest of the Class B Member pursuant to Section 3.4.

ARTICLE 11

AMENDMENTS

11.1        Amendments.

(a)          Any amendment or supplement to this Agreement implemented solely to recognize substitution of any Member expressly permitted hereunder or an assignment of any Interest made in full compliance with Article 9 may be made by either of the Managing Member or the Class A Member without the consent or approval of any other Member. In all other cases, this Agreement may only be amended, supplemented or otherwise modified with the prior written consent of the Managing Member and the Class A Member (and, if the Class B Member is not the Managing Member and a proposed amendment would either (x) affect the economic rights provided herein of the Class B Member or (y) modify the rights of the Class B Member to approve the Fundamental Decisions specified herein, with the prior written consent of the Class B Member) and except with respect to the rights of the Special Member of the Company referred to in paragraph (b) below, no other Member shall have any right to approve or disapprove any amendment, supplement or other modification to this Agreement that has been approved by the

54

Managing Member and the Class A Member. No amendment, modification, supplement, discharge or waiver hereof or hereunder shall require the consent of any Person not a party to this Agreement.

(b)          For so long as any of the Senior Loans remain outstanding, no Member shall be entitled to implement any amendment, supplement or other modification of any of Section 2.5, 2.7, 5.15 or 10.1 or this Section 11.1(b) except with the prior written approval of each of the Managing Member, the Class A Member and the Special Member of the Company, and then only if such amendment, supplement or modification is not otherwise prohibited by the provisions of any Senior Loan Documents then outstanding.

11.2        Additional Members. In addition to the requirements of Section 11.1, if this Agreement shall be amended for the purpose of adding or substituting any Member, the amendment shall be signed by the Person to be added or substituted and by the assigning Member, if any. In making any amendments, the Managing Member shall prepare and file for recordation such documents and certificates as shall be required to be prepared and filed. Except for transferees of the Class A Member’s Interest, for which no consent shall be required, additional Members may be admitted to the Company only upon the unanimous consent of all Members.

ARTICLE 12

MISCELLANEOUS

12.1        Further Assurances. Each party to this Agreement agrees to execute, acknowledge, deliver, file and record such further certificates, amendments, instruments and documents, and to do all such other acts and things, as may be required by law or as, in the reasonable judgment of the Class A Member or the Managing Member may be necessary or advisable to carry out the intent and purpose of this Agreement.

12.2        Notices. Unless otherwise specified in this Agreement, all notices, demands, elections, requests or other communications that any party to this Agreement may desire or be required to give hereunder shall be in writing and shall be given by hand by depositing the same in the United States mail, first class postage prepaid, certified mail, return receipt requested, or by a recognized overnight courier service providing confirmation of delivery, to the addresses set forth in Section 2.6 or 2.8, as applicable, or at such other address as may be designated by the addressee thereof (which in the case of the Company, shall be designated by the Class B Member) upon written notice to all of the Members. All notices given pursuant to this Section 12.2 shall be deemed to have been given (i) if delivered by hand on the date of delivery or on the date delivery was refused by the addressee or (ii) if delivered by United States mail or by overnight courier, on the date of delivery as established by the return receipt or courier service confirmation (or the date on which the return receipt or courier service confirms that acceptance of delivery was refused by the addressee).

12.3        Remedies of the Class B Member. The Class A Member shall be required to act reasonably only in those cases expressly provided for herein. In the event that a claim or adjudication is made that the Class A Member or its agents have acted unreasonably or unreasonably delayed acting in any case where, by law or under this Agreement or the Transaction Documents, the Class A Member or such agent, as the case may be, has an obligation

55

to act reasonably, that neither the Class A Member nor its agents shall be liable for any monetary damages, and the Class B Member’s sole remedy shall be limited to commencing an action seeking injunctive relief or declaratory judgment. Any action or proceeding to determine whether the Class A Member has acted reasonably shall be determined by an action seeking declaratory judgment, and the Class B Member hereby waives its right to seek indirect, special, punitive and/or consequential damages from the Class A Member.

12.4         Exculpation. Subject to the qualifications below, the Class A Member shall not enforce any liability or obligation of the Class B Member or the Company under this Agreement or the other Transaction Documents against any direct or indirect owner, employee or officer of the Class B Member. The provisions of this Section shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Transaction Documents; (b) affect the validity or enforceability of the Environmental Indemnity Agreement or the Guarantees or any of the rights and remedies of the Class A Member against the Company or the Class B Member under this Agreement and the other Transaction Documents; (c) constitute a prohibition against the Class A Member pursuing its rights and remedies against the Company; or (d) constitute a waiver of the right of the Class A Member to enforce the liability and obligation of the Company, by money judgment or otherwise. Nothing in this Section 12.4 shall be deemed to modify, limit or expand any exculpation provisions set forth in the Senior Loan Documents.

12.5         Headings and Captions. All headings and captions contained in this Agreement and in the table of contents hereto are inserted for convenience only and shall not be deemed a part of this Agreement.

12.6         Variance of Pronouns. All pronouns and all variations thereof shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the Person may require.

12.7         Counterparts. THIS AGREEMENT MAY BE EXECUTED IN TWO OR MORE COUNTERPARTS, EACH OF WHICH SHALL CONSTITUTE AN ORIGINAL AND ALL OF WHICH, WHEN TAKEN TOGETHER, SHALL CONSTITUTE ONE AGREEMENT.

12.8         Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.

12.9         Consent to Jurisdiction. To the fullest extent permitted by law, each party hereto hereby irrevocably consents and agrees, for the benefit of each party, that any legal action, suit or proceeding against it with respect to its obligations, liabilities or any other matter under or arising out of or in connection with this Agreement and with respect to the enforcement, modification, vacation or correction of an award rendered in an arbitration proceeding shall be brought in any city, state or federal court located in the Borough of Manhattan, The City of New York (a “New York Court”) or in the State of Delaware (a “Delaware Court”), and hereby irrevocably accepts and submits to the exclusive jurisdiction of each such New York Court and Delaware Court with respect to any such action, suit or proceeding. Each party hereto also hereby irrevocably consents and agrees, for the benefit of each other party, that any legal action, suit or proceeding against it shall be brought in any New York Court or any Delaware Court, and hereby irrevocably accepts and submits to the exclusive jurisdiction of each such New York Court and Delaware Court with

56

respect to any such action, suit or proceeding. Each party hereto waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions, suits or proceedings brought in any such New York Court or Delaware Court and hereby further waives and agrees not to plead or claim in any such New York Court or Delaware Court that any such action, suit or proceeding brought therein has been brought in an inconvenient forum. Each party agrees that (i) to the fullest extent permitted by law, service of process may be effectuated hereinafter by mailing a copy of the summons and complaint or other pleading by certified mail, return receipt requested, at its address set forth above and (ii) all notices that are required to be given hereunder may be given by the attorneys for the respective parties.

12.10      Arbitration.

(a)          Arbitration administered by the American Arbitration Association shall be the exclusive method for resolution of any claims or disputes arising out of, relating to or in connection with this Agreement or the breach thereof, and the determination of the arbitrators shall be final and binding (except to the extent there exist grounds for vacation or an award under applicable arbitration statutes) on the Members. The parties agree that they will give conclusive effect to the arbitrators’ determination and award and that judgment thereon may be entered in any court having jurisdiction. The arbitrators will have no authority to award punitive damages or any other damage not measured by the prevailing party’s actual damages, and may not, in any event, make any ruling, finding or award that does not conform to the terms and conditions of this Agreement. Each party shall bear its own costs in any arbitration.

(b)          The number of arbitrators shall be three, each of whom shall be disinterested in the dispute or controversy and shall be impartial with respect to all parties hereto. The Class A Members shall appoint one arbitrator, the Class B Member shall appoint one arbitrator and the third arbitrator shall be appointed in accordance with the then prevailing commercial arbitration rules of the American Arbitration Association, which rules shall apply to any arbitration proceeding commenced hereunder.

(c)          The place of arbitration shall be the Borough of Manhattan, The City of New York. The arbitration shall be conducted in the English language. The arbitrators shall give effect insofar as possible to the desire of the parties hereto that the dispute or controversy be resolved in accordance with good commercial practice. The arbitrators shall decide such dispute in accordance with the law of the State of Delaware, without regard to conflict of law provisions thereof. The arbitrators shall decide such dispute as expeditiously as possible and, in any event, within fifteen (15) Business Days of selection of the third arbitrator. They shall apply the commercial arbitration rules of the American Arbitration Association and Title 9 of the U.S. Code.

(d)          Notwithstanding any provision of this Agreement to the contrary, Section 3.5 and this Section 12.10 shall be construed to the maximum extent possible to comply with the laws of the State of Delaware, including the Uniform Arbitration Act (10 Del. C. § 5701, et seq.) (the "Delaware Arbitration Act"). If, nevertheless, it shall be determined by a court of competent jurisdiction that any provision or wording of Section 3.5 or this Section 12.10, including any Commercial Arbitration Rules or rules of the American Arbitration Association, shall be invalid or unenforceable under the Delaware Arbitration Act, or other applicable law, such invalidity shall not invalidate all of Section 3.5 or this

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Section 12.10.      In that case, Section 3.5 or this Section 12.10, as applicable, shall be construed so as to limit any term or provision so as to make it valid or enforceable within the requirements of the Delaware Arbitration Act or other applicable law, and, in the even such term or provision cannot be so limited, Section 3.5 or Section 12.10, as applicable, shall be construed to omit such invalid or unenforceable provision.

12.11     Partition. The Members hereby agree that no Member nor any successor-in-interest to any Member shall have the right to have the property of the Company partitioned, or to file a complaint or institute any proceeding at law or in equity to have the property of the Company partitioned, and each Member, on behalf of himself, his successors, representatives, heirs and assigns, hereby waives any such right.

12.12     Invalidity. Every provision of this Agreement is intended to be severable. The invalidity and unenforceability of any particular provision of this Agreement in any jurisdiction shall not affect the other provisions hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision were omitted.

12.13     Successors and Assigns. This Agreement shall be binding upon the parties hereto and their respective successors, executors, administrators, legal representatives, heirs and legal assigns and shall inure to the benefit of the parties hereto and, except as otherwise provided herein, their respective successors, executors, administrators, legal representatives, heirs and legal assigns. No Person other than the parties hereto and their respective successors, executors, administrators, legal representatives, heirs and permitted assigns shall have any rights or claims under this Agreement.

12.14     Entire Agreement. This Agreement, including the Schedules hereto, supersedes all prior agreements among the parties with respect to the subject matter hereof and together with the other Transaction Documents contains the entire Agreement among the parties with respect to such subject matter.

12.15     Waivers. No waiver of any provision hereof by any party hereto shall be deemed a waiver by any other party nor shall any such waiver by any party be deemed a continuing waiver of any matter by such party.

12.16     No Brokers. Each of the Members hereto warrant to each other that there are no brokerage commissions or finders’ fees (or any basis therefor) resulting from any action taken by such Member or any Person acting or purporting to act on their behalf upon entering into this Agreement. Each Member agrees to indemnify and hold harmless each other Member for all costs, damages or other expenses arising out of any misrepresentation made in this Section 12.16.

12.17     Press Releases. No Member shall issue any press release or other public communication about the formation or existence of the Company without the express prior written consent of all Members.

12.18     No Third Party Beneficiaries. Except as expressly stated herein, this Agreement is not intended and shall not be construed as granting any rights, benefits or privileges to any Person not a party to this Agreement. Without limiting the generality of the foregoing, no creditor of the Company shall have any right whatsoever to require any Member to contribute capital to the Company.

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12.19    Construction of Documents. The parties hereto acknowledge that they were represented by separate and independent counsel in connection with the review, negotiation and drafting of this Agreement and that this Agreement shall not be subject to the principle of construing its meaning against the party that drafted same.

12.20    Time of Essence. Time is of the essence in the performance of each and every term of this Agreement.

THE REMAINDER OF THIS PAGE WAS INTENTIONALLY LEFT BLANK

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

CLASS B MEMBER:
AMERICAN REALTY CAPITAL HOSPITALITY PORTFOLIO MEMBER, LP
By:	American Realty Capital Hospitality Portfolio Member GP, LLC, its general partner
	By:
	Name: Jonathan Mehlman
	Title: CEO and President

[Signatures continue on next page]

Signature Page to Amended and Restated Limited Liability Company Agreement of

ARC Hospitality Portfolio II Holdco, LLC

CLASS A MEMBER:
W2007 Equity Inns PARTNERSHIP, L.P.
By:	W2007 Grace Acquisition I, Inc., a Tennessee corporation, its general partner
	By:
	Name:
	Title:
W2007 Equity Inns TRUST
By:
	Name:
	Title:

Signature Page to Amended and Restated Limited Liability Company Agreement of

ARC Hospitality Portfolio II Holdco, LLC

SPECIAL MEMBER:

William G. Popeo

Signature Page to Amended and Restated Limited Liability Company Agreement of

ARC Hospitality Portfolio II Holdco, LLC

Schedule A

Properties

Property Name	Address  (Street)	Address  (City, State, Zip Code)
Courtyard Dalton	411 Holiday Drive	Dalton, GA 30720
Courtyard Houston I-10 West/Energy Corridor	12401 Katy Freeway	Houston, TX 77079
Courtyard San Diego Carlsbad/McClellan-Palomar Airport	5835 Owens Avenue	Carlsbad, CA 92008
Hampton Inn Austin – North @ I-35 & Hwy 183	7619 I-35 North	Austin, TX 78752
Hampton Inn Champaign/Urbana	1200 West University Avenue	Urbana, IL 61801
Hampton Inn Chicago/Naperville	1087 East Diehl Road	Naperville, IL 60563
Hampton Inn College Station	320 Texas Avenue South	College Station, TX 77840
Hampton Inn East Lansing	2500 Coolidge Road	East Lansing, MI 48823
Hampton Inn Indianapolis –NE/Castleton	6817 East 82nd Street	Indianapolis, IN 46250
Hampton Inn Knoxville – Airport	148 International Avenue	Alcoa, TN 37701
Hampton Inn Milford	129 Plains Road	Milford, CT 06460
Hampton Inn Orlando International Drive/Convention Center	8900 Universal Boulevard	Orlando, FL 32819
Hilton Garden Inn Albuquerque –North/Rio Rancho	1771 Rio Rancho Boulevard	Albuquerque, NM 87124
Hilton Garden Inn Louisville East	1530 Alliant Avenue	Louisville, KY 40299
Homewood Suites by Hilton Augusta	1049 Stevens Creek Road	Augusta, GA 30907
Homewood Suites by Hilton Orlando – International Drive/Convention Center	8745 International Drive	Orlando, FL 32819
Homewood Suites by Hilton Seattle Downtown	206 Western Avenue West	Seattle, WA 98119
Residence Inn Jacksonville Airport	1310 Airport Road	Jacksonville, FL 32218
SpringHill Suites Asheville	Two Buckstone Place	Asheville, NC 28805
TownePlace Suites Savannah Midtown	11309 Abercorn Street	Savannah, GA 31419

SCHEDULE 1.1(a)

Allocated Amounts

Property	Allocated Amount($)
Courtyard Dalton		2,946,954
Courtyard Houston I-10 (ENN)		9,231,839
Courtyard San Diego (Carlsbad)		6,527,914
Hampton Inn Austin		4,255,836
Hampton Inn Chicago (Naperville)		3,046,462
Hampton Inn College Station		5,159,281
Hampton Inn East Lansing		4,100,888
Hampton Inn Indianapolis Castleton		3,021,197
Hampton Inn Knoxville		2,290,680
Hampton Inn Milford		2,129,278
Hampton Inn Orlando		3,995,828
Hampton Inn Urbana (Champaign)		6,986,098
Hilton Garden Inn Albuquerque		3,448,225
Hilton Garden Inn Louisville		5,520,397
Homewood Suites Augusta		3,039,548
Homewood Suites Orlando		9,087,571
Homewood Suites Seattle		16,108,789
Residence Inn Jacksonville		1,831,493
SpringHill Suites Asheville		4,257,512
TownePlace Suites Savannah		2,813,392
Total	$	99,799,180

SCHEDULE 1.1(b)

Mortgage Loan Documents

All documents dated as of February 27, 2015 unless otherwise stated herein. All defined terms set forth on this Section 1.1(b) shall have the definitions contained in this Scheduled 1.1(b).

1. Loan Agreement, between ARC Hospitality Portfolio II Owner, LLC, ARC Hospitality Portfolio II TRS, LLC, ARC Hospitality Portfolio II HIL TRS, LLC, ARC Hospitality Portfolio II MISC TRS, LLC, ARC Hospitality Portfolio II NTC Owner, LP, ARC Hospitality Portfolio II NTC TRS, LP, ARC Hospitality Portfolio II NTC HIL TRS, LP, ARC Hospitality Stratford, LLC and ARC Hospitality TRS Stratford, LLC (individually, each, a “Borrower” and collectively, “Borrowers”), Ladder Capital Finance LLC (“LCF”) and Deutsche Bank AG, New York Branch (“DBNY”, and together with LCF, collectively, “Lender”);

2. Promissory Note A-1 by Borrowers to LCF in the original principal sum of $136,200,000.00;

3. Promissory Note A-2 by Borrowers to DBNY in the original principal sum of $90,800,000.00;

4. Deed to Secure Debt, Assignment of Leases and Rents, Security Agreement and Fixture Filing by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II MISC TRS, LLC in favor of Lender, to be recorded in Chatham County, Georgia;

5. Deed to Secure Debt, Assignment of Leases and Rents, Security Agreement and Fixture Filing by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II TRS, LLC in favor of Lender, to be recorded in Whitfield County, Georgia;

6. Deed to Secure Debt, Assignment of Leases and Rents, Security Agreement and Fixture Filing by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II HIL TRS, LLC in favor of Lender, to be recorded in Richmond County, Georgia;

7. Deed of Trust, Assignment of Leases and Rents and Security Agreement by ARC Hospitality Portfolio II NTC Owner, LP and ARC Hospitality Portfolio II NTC TRS, LP in favor of Lender, to be recorded in Buncombe County, North Carolina;

8. Mortgage, Assignment of Leases and Rents and Security Agreement by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II TRS, LLC in favor of Lender, to be recorded in Orange County, Florida;

9. Mortgage, Assignment of Leases and Rents and Security Agreement by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II TRS, LLC in favor of Lender, to be recorded in Orange County, Florida;

10. Mortgage, Assignment of Leases and Rents and Security Agreement by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II MISC TRS, LLC in favor of Lender, to be recorded in Duval County, Florida;

11. Deed of Trust, Assignment of Leases and Rents and Security Agreement by ARC Hospitality Portfolio II NTC Owner, LP and ARC Hospitality Portfolio II NTC TRS, LP in favor of Lender, to be recorded in Travis County, Texas;

12. Deed of Trust, Assignment of Leases and Rents and Security Agreement by ARC Hospitality Portfolio II NTC Owner, LP and ARC Hospitality Portfolio II NTC HIL TRS, LP in favor of Lender, to be recorded in Brazos County, Texas;

13. Deed of Trust, Assignment of Leases and Rents and Security Agreement by ARC Hospitality Portfolio II NTC Owner, LP and ARC Hospitality Portfolio II NTC TRS, LP in favor of Lender, to be recorded in Harris County, Texas;

14. Mortgage, Assignment of Leases and Rents and Security Agreement by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II HIL TRS, LLC in favor of Lender, to be recorded in DuPage County, Illinois;

15. Mortgage, Assignment of Leases and Rents and Security Agreement by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II MISC TRS, LLC in favor of Lender, to be recorded in Champaign County, Illinois;

16. Open-End Mortgage Deed, Assignment of Leases and Rents, Security Agreement and Fixture Filing by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II HIL TRS, LLC in favor of Lender, to be recorded in New Haven County, Connecticut.

17. Open-End Mortgage Deed, Assignment of Leases and Rents, Security Agreement and Fixture Filing by ARC Hospitality Stratford, LLC and ARC Hospitality TRS Stratford, LLC in favor of Lender, to be recorded in Fairfield County, Connecticut;

18. Deed of Trust, Assignment of Leases and Rents and Security Agreement by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II HIL TRS, LLC in favor of Lender, to be recorded in King County, Washington;

19. Mortgage, Assignment of Leases and Rents and Security Agreement by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II TRS, LLC in favor of Lender, to be recorded in Jefferson County, Kentucky;

20. Mortgage, Assignment of Leases and Rents and Security Agreement by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II HIL TRS, LLC in favor of Lender, to be recorded in Marion County, Indiana;

21. Mortgage by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II MISC TRS, LLC in favor of Lender, to be recorded in Ingham County, Michigan;

22. Mortgage, Assignment of Leases and Rents and Security Agreement by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II TRS, LLC in favor of Lender, to be recorded in Sandoval County, New Mexico;

23. Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing by ARC Hospitality Portfolio II NTC Owner, LP and ARC Hospitality Portfolio II NTC TRS, LP in favor of Lender, to be recorded in San Diego County, California;

24. Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II HIL TRS, LLC in favor of Lender, to be recorded in Blount County, Tennessee;

25. Assignment of Leases and Rents by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II MISC TRS, LLC to Lender, to be recorded in Chatham County, Georgia;

26. Assignment of Leases and Rents by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II TRS, LLC to Lender, to be recorded in Whitfield County, Georgia;

27. Assignment of Leases and Rents by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II HIL TRS, LLC to Lender, to be recorded in Richmond County, Georgia;

28. Assignment of Leases and Rents by ARC Hospitality Portfolio II NTC Owner, LP and ARC Hospitality Portfolio II NTC TRS, LP to Lender, to be recorded in Buncombe County, North Carolina;

29. Assignment of Leases and Rents by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II TRS, LLC to Lender, to be recorded in Orange County, Florida;

30. Assignment of Leases and Rents by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II TRS, LLC to Lender, to be recorded in Orange County, Florida;

31. Assignment of Leases and Rents by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II MISC TRS, LLC to Lender, to be recorded in Duval County, Florida;

32. Assignment of Leases and Rents by ARC Hospitality Portfolio II NTC Owner, LP and ARC Hospitality Portfolio II NTC TRS, LP to Lender, to be recorded in Travis County, Texas;

33. Assignment of Leases and Rents by ARC Hospitality Portfolio II NTC Owner, LP and ARC Hospitality Portfolio II NTC HIL TRS, LP to Lender, to be recorded in Brazos County, Texas;

34. Assignment of Leases and Rents by ARC Hospitality Portfolio II NTC Owner, LP and ARC Hospitality Portfolio II NTC TRS, LP to Lender, to be recorded in Harris County, Texas;

35. Assignment of Leases and Rents by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II HIL TRS, LLC to Lender, to be recorded in DuPage County, Illinois;

36. Assignment of Leases and Rents by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II MISC TRS, LLC to Lender, to be recorded in Champaign County, Illinois;

37. Assignment of Leases and Rents by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II HIL TRS, LLC to Lender, to be recorded in New Haven County, Connecticut;

38. Assignment of Leases and Rents by ARC Hospitality Stratford, LLC and ARC Hospitality TRS Stratford, LLC to Lender, to be recorded in Fairfield County, Connecticut;

39. Assignment of Leases and Rents by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II HIL TRS, LLC to Lender, to be recorded in King County, Washington;

40. Assignment of Leases and Rents by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II TRS, LLC to Lender, to be recorded in Jefferson County, Kentucky;

41. Assignment of Leases and Rents by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II HIL TRS, LLC to Lender, to be recorded in Marion County, Indiana;

42. Assignment of Leases and Rents by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II MISC TRS, LLC in favor of Lender, to be recorded in Ingham County, Michigan;

43. Assignment of Leases and Rents by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II TRS, LLC in favor of Lender, to be recorded in Sandoval County, New Mexico;

44. Assignment of Leases and Rents by ARC Hospitality Portfolio II NTC Owner, LP and ARC Hospitality Portfolio II NTC TRS, LP in favor of Lender, to be recorded in San Diego County, California;

45. Assignment of Leases and Rents by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II HIL TRS, LLC in favor of Lender, to be recorded in Blount County, Tennessee;

46. Cash Management Agreement between Borrowers, Lender and Wells Fargo Bank, N.A.;

47. Deposit Account Control Agreement (Crestline) between ARC Hospitality Portfolio II TRS Holdco, LLC, ARC Hospitality Portfolio II Owner, LLC, ARC Hospitality Portfolio Owner II NTC Owner, LP, ARC Hospitality Portfolio II TRS, LLC, ARC Hospitality Portfolio II NTC TRS, LP, Lender and Wells Fargo Bank, N.A.;

48. Deposit Account Control Agreement (Pillar) between ARC Hospitality Portfolio II TRS Holdco, LLC, ARC Hospitality Portfolio II Owner, LLC, ARC Hospitality Portfolio II TRS, LLC, ARC Hospitality Portfolio II MISC TRS, LLC, Lender and Wells Fargo Bank, N.A.;

49. Deposit Account Control Agreement (McKibbon) between ARC Hospitality Portfolio II TRS Holdco, LLC, ARC Hospitality Portfolio II Owner, LLC, ARC Hospitality Portfolio II NTC Owner, LP, ARC Hospitality Portfolio II MISC TRS, LLC, ARC Hospitality Portfolio NTC TRS, LP, Lender and Wells Fargo Bank, N.A.;

50. Deposit Account Control Agreement (Hilton) between ARC Hospitality Portfolio II TRS Holdco, LLC, ARC Hospitality Portfolio II Owner, LLC, ARC Hospitality Portfolio II NTC Owner, LP, ARC Hospitality Portfolio II HIL TRS, LLC, ARC Hospitality Portfolio II NTC HIL TRS, LP, Borrowers, Lender and Wells Fargo Bank, N.A.;

51. Deposit Account Control Agreement (Stratford) between ARC Hospitality Portfolio II TRS Holdco, LLC, ARC Hospitality Stratford, LLC, ARC Hospitality TRS Stratford, LLC, Lender and Wells Fargo Bank, N.A.;

52. Guaranty of Recourse Obligations by American Realty Capital Hospitality Trust, Inc. (“Guarantor”) for the benefit of Lender;

53. Environmental Indemnity Agreement by Borrowers and Guarantor in favor of Lender;

54. Recognition Agreement by and between Lender, W2007 Equity Inns Trust and W2007 Equity Inns, L.P.;

55. Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) (Crestline) by ARC Hospitality Portfolio II NTC TRS, LP and ARC Hospitality Portfolio II TRS, LLC to Lender and consented and agreed to by American Realty Capital Hospitality Grace Portfolio, LLC and ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II NTC Owner, LP;

56. Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) (Pillar) by ARC Hospitality Portfolio II MISC TRS, LP to Lender and consented and agreed to by American Realty Capital Hospitality Grace Portfolio, LLC and ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II NTC Owner, LP;

57. Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) (McKibbon) by ARC Hospitality Portfolio II NTC TRS, LP and ARC Hospitality Portfolio II MISC TRS, LLC to Lender and consented and agreed to by American Realty Capital Hospitality Grace Portfolio, LLC, ARC Hospitality Portfolio II Owner, LLC, and ARC Hospitality Portfolio II NTC Owner, LP;

58. Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) (Hilton) by ARC Hospitality Portfolio II HIL TRS, LP to Lender and consented and agreed to by American Realty Capital Hospitality Grace Portfolio, LLC and ARC Hospitality Portfolio II Owner, LLC;

59. Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) (Courtyard Houston) by ARC Hospitality Portfolio II NTC HIL TRS, LP to Lender and consented and agreed to by American Realty Capital Hospitality Grace Portfolio, LLC and ARC Hospitality Portfolio II NTC Owner, LP;

60. Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) (Stratford) by ARC Hospitality TRS Stratford, LLC to Lender and consented and agreed to by American Realty Capital Hospitality Grace Portfolio, LLC and ARC Hospitality Stratford, LLC;

61. Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) (Crestline) by ARC Hospitality Portfolio II NTC TRS, LP and ARC Hospitality Portfolio II TRS, LLC to Lender and consented and agreed to by ARC Hospitality Portfolio II Owner, LLC, ARC Hospitality Portfolio II NTC Owner, LP, American Realty Capital Hospitality Properties, and LLC Crestline Hotels & Resorts, LLC;

62. Assignment of Management Agreement and Subordination of Management Fees(Management Agreement) (Pillar) by ARC Hospitality Portfolio II MISC TRS, LP to Lender and consented and agreed to by, ARC Hospitality Portfolio II Owner, LLC, ARC Hospitality Portfolio II NTC Owner, LP American Realty Capital Hospitality Properties and LLC Pillar Hotels and Resorts, L.P.;

63. Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) (McKibbon) by ARC Hospitality Portfolio II NTC TRS, LP and ARC Hospitality Portfolio II MISC TRS, LLC to Lender and consented and agreed to by ARC Hospitality Portfolio II Owner, LLC, ARC Hospitality Portfolio II NTC Owner, LP, American Realty Capital Hospitality Properties, LLC and McKibbon Hotel Management, Inc.;

64. Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) (Hilton) by ARC Hospitality Portfolio II HIL TRS, LP to Lender and consented and agreed to by ARC Hospitality Portfolio II Owner, LLC American Realty Capital Hospitality Properties, LLC and Hampton Inns Management LLC;

65. Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) (Hilton) by ARC Hospitality Portfolio II HIL TRS, LP to Lender and consented and agreed to by ARC Hospitality Portfolio II Owner, LLC American Realty Capital Hospitality Properties, LLC and Homewood Suites Management LLC;

66. Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) (Courtyard Houston) by ARC Hospitality Portfolio II NTC HIL TRS, LP to Lender and consented and agreed to by ARC Hospitality Portfolio II NTC Owner, LP, American Realty Capital Hospitality Properties, LLC and Crestline Hotels & Resorts, LLC;

67. Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) (Stratford) by ARC Hospitality TRS Stratford, LLC to Lender and consented and agreed to by ARC Hospitality Stratford, LLC, American Realty Capital Hospitality Properties, LLC and Crestline Hotels & Resorts, LLC;

68. Liquor License Agreement, made by ARC Hospitality Portfolio II TX Beverage Company, LLC, ARC Hospitality Portfolio II NTC TRS, LP, and ARC Hospitality Portfolio II NTC Owner, LP to Lender;

69. Assignment of Alcohol Management and Services Agreement, made by ARC Hospitality Portfolio II NTC HIL TRS, LP to Lender and consented to by ARC Hospitality Portfolio II NTC Owner, LP, ARC Hospitality Portfolio II TX Beverage Company, LLC and Crestline Hotels and Resorts LLC;

70. Pledge Agreement, made by ARC Hospitality Portfolio TX Holdings, LLC to Lender, acknowledged and agreed to by ARC Hospitality Portfolio II TX Beverage Company, LLC, ARC Hospitality Portfolio II NTC TRS, LP and ARC Hospitality Portfolio II NTC Owner, LP;

71. Contribution Agreement, made by and between Borrowers and Lender;

72. Borrowers’ Closing Certificate, made by Borrowers to Lender;

73. Anti-Coercion statement, made by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II TRS, LLC, and delivered to Lender;

74. Anti-Coercion statement, made by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II TRS, LLC, and delivered to Lender;

75. Anti-Coercion statement, made by ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II MISC TRS, LLC, and delivered to Lender;

76. Notice to Owner – Mortgagor, from ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II TRS, LLC to Lender;

77. Notice to Owner – Mortgagor, from ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II TRS, LLC to Lender;

78. Notice to Owner – Mortgagor, from ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II MISC TRS, LLC to Lender;

79. Notice and Agreement, by and between ARC Hospitality Portfolio II NTC Owner, LP and ARC Hospitality Portfolio II NTC TRS, LP and Lender;

80. Notice and Agreement, by and between ARC Hospitality Portfolio II NTC Owner, LP and ARC Hospitality Portfolio II NTC HIL TRS, LP and Lender;

81. Notice and Agreement, by and between by ARC Hospitality Portfolio II NTC Owner, LP and ARC Hospitality Portfolio II NTC TRS, LP and Lender;

82. UCC-1 Financing Statements to be filed in each of the applicable locations set forth on Schedule I;

83. UCC-1 Financing Statements, naming each Borrower, as debtor, and Lender, as secured party, to be filed with Delaware Secretary of State;

84. UCC-1 Financing Statement pertaining to the Texas Liquor License Agreement;

85. Post-Closing Obligations Letter, by Borrowers for the benefit of Lender; and

86. Title Company Escrow Letter, by and between Borrowers, First American Title Insurance Company, National Land Tenure Company LLC, and Lender.

SCHEDULE 5.15(a)

Special Purpose Covenants

1.    With respect to each Subsidiary, such Subsidiary shall comply with the single purpose entity and bankruptcy remoteness requirements of the Senior Loan Documents, whether or not the applicable Senior Loan remains outstanding.

2.    With respect to the Company:

(a)         The Company (i) has been, is, and will be organized solely for the purpose of acquiring, developing, owning, holding, financing, selling, leasing, transferring, exchanging, managing and operating such the Properties through the Subsidiaries, entering into this Agreement and the other Transaction Documents, and transacting lawful business that is incident, necessary and appropriate to accomplish the foregoing, and (ii) has not owned, does not own, and will not own any asset or property other than (A) its limited liability company and limited partnership interests in the Subsidiaries and (B) incidental personal property necessary for the ownership or operation of such limited liability company interests.

(b)         The Company has not engaged and will not engage in any business other than the ownership, management and operation of the Properties through the Subsidiaries and business incidental thereto.

(c)         The Company has not and will not enter into any Class B Member Affiliate Contract unless (i) such agreement or other arrangement is on arm’s-length commercially reasonable terms and (ii) such agreement or other arrangement is terminable by the Class A Member following the declaration of a Changeover Event without payment of any termination or similar fee.

(d)         The Company has not incurred and will not incur any Indebtedness other than its obligations under this Agreement and the other Transaction Documents.

(e)         Except as contemplated in this Agreement and the other Transaction Documents, the Company has not made and will not make any loans or advances to any third party (including the Class B Member, any Guarantor and/or any of their respective Affiliates), and has not and shall not acquire obligations or securities of its Affiliates.

(f)          The Company is and intends to remain solvent and the Company has, in all material respects, paid and will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets; provided that the foregoing shall not require any direct or indirect member, partner or shareholder of the Company to make any additional capital contributions to the Company; and provided further that it shall not be a breach of this subsection (f) to the extent that the Company does (or did) not pay such debts or liabilities because it does not have (or did not have) sufficient cash flow.

(g)         The Company has done or caused to be done, and will do, all things necessary to observe organizational formalities and preserve its existence, and the Company has not and will not, (i) terminate or fail other than to a de minimis and immaterial extent, to comply with the provisions of its Organizational Documents, or (ii) from and after the date hereof only, unless the Class A Member has consented, amend, modify or otherwise change its certificate of formation, operating agreement or other Organizational Documents.

(h)         The Company has, in all material respects, maintained and will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any other Person. The Company’s assets will not be listed as assets on the financial statement of any other Person, provided, however, that the Company’s assets may be included in a consolidated financial statement of its Affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Company and such Affiliates and to indicate that the Company’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person, and (ii) such assets shall be listed on the Company’s own separate balance sheet. The Company will file its own tax returns (to the extent the Company is required to file any such tax returns) and will not file a consolidated federal income tax return with any other Person (for the avoidance of doubt, the inclusion of the results of operations, income, profits, losses or other tax attributes of a Person that is a disregarded entity for federal or state income tax purposes in the federal or state income tax returns of the beneficial owner of such Person shall not constitute the filing of an income tax return by such Person), except to the extent that the Company is (i) required to file consolidated tax returns by law or (ii) is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law. The Company has maintained and shall maintain its books, records, resolutions and agreements in accordance with this Agreement.

(i)          The Company has been, will be, and at all times has held and will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of the Class B Member or any Guarantor), 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 department or part of the other and shall maintain and utilize separate stationery, invoices and checks bearing its own name.

(j)          The Company intends to 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; provided that nothing in this clause (j) shall be interpreted to require the partners, members or other principals of the Company to make any capital contributions or loans to such entity or arrange for any such capital contribution or loan by any third party.

(k)          None of the Company, any Affiliate Controlling the Company, the Class B Member, any Guarantor or any other Person holding any direct or Controlling indirect interest in the Company, has sought or intends to seek or effect the

liquidation, dissolution, winding up, consolidation or merger, in whole or in part, of the Company.

(l)          The Company has not and will not commingle the funds and other assets of the Company with those of any Affiliate, the Class B Member, any Guarantor or any other Person, and has held and will hold all of its assets in its own name.

(m)        The Company has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate, the Class B Member, any Guarantor or any other Person.

(n)         The Company has not and will not assume or guarantee or become obligated for the debts of any other Person and does not and will not hold itself out to be responsible for or have its credit available to satisfy the debts or obligations of any other Person.

(o)         The Company shall be a single purpose entity and shall have at all times (except for the limited and temporary circumstances described in Section 2.7 of this Agreement) at least one Special Member that has the rights and responsibilities described in this Agreement.

(p)         The Company has conducted and shall conduct its business so that the assumptions made with respect to the Company in any non-consolidation opinion delivered to the Class A Member in connection with its investment in the Company, or in any other non-consolidation opinion delivered subsequently to the Class A Member’s investment in the Company, shall be true and correct in all material respects. In connection with the foregoing, the Company hereby covenants and agrees that it will comply in all material respects with or cause the compliance in all material respects with, (i) all of the facts and assumptions (whether regarding the Company or any other Person) set forth in such non-consolidation opinion letter, (ii) all of the representations, warranties and covenants in this Schedule 5.15(a), and (iii) its Organizational Documents other than to a de minimis and immaterial extent.

(q)        Except as contemplated in this Agreement, the Company has not permitted and will not permit any Affiliate of the Class B Member or any Guarantor or any other Person holding any direct or indirect interest in the Company, independent access to its bank accounts.

(r)          Except as contemplated in this Agreement, the Company has, in all material respects, paid and shall pay its own liabilities and expenses, including the salaries of its own employees (if any) from its own funds; provided that the foregoing shall not require any direct or indirect member, partner or shareholder of the Company to make any additional capital contributions to the Company; provided further that it shall not be a breach of this subsection (r) to the extent that the Company does (or did) not pay such liabilities or expenses because it does not have (or did not have) sufficient cash flow.

(s)          Except as contemplated in this Agreement, the Company has compensated and shall compensate each of its consultants and agents from its own

funds for services provided to it and pay from its own assets all obligations of any kind incurred; provided that it shall not be a breach of this subsection (s) to the extent the Company does (or did) not compensate such consultants or agents or pay such obligations because it does not have (or did not have) sufficient cash flow.

(t)          The Company has not, and without the prior written consent of its Special Member, will not, (i) file a bankruptcy, insolvency or reorganization petition or otherwise institute insolvency proceedings or otherwise seek any relief under any laws relating to the relief from debts or the protection of debtors generally, (ii) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for such entity or for all or any portion of the Company’s properties, (iii) make any assignment for the benefit of the Company’s creditors, or (iv) take any action in furtherance of the foregoing.

(u)         Except as contemplated in this Agreement, the Company has, in all material respects, maintained and will maintain an arm’s-length relationship with its Affiliates; provided that the foregoing shall not require any direct or indirect member, partner or shareholder of the Company to make any additional capital contributions to the Company.

(v)         The Company has allocated and will allocate fairly and reasonably any overhead expenses that are shared with any Affiliate, including shared office space.

(w)        Except pursuant to the Transaction Documents, the Company has not pledged and will not pledge its assets for the benefit of any other Person.

(x)         The Company has and will have no obligation to indemnify its officers, directors, members or partners, as the case may be, or has such an obligation that is fully subordinated to the obligations owed to the Class A Member under this Agreement and the other Transaction Documents and will not constitute a claim against it if cash flow in excess of the amount required to pay the obligations owed to the Class A Member under this Agreement is insufficient to pay such indemnification obligation.

(y)         Except for the Guarantees, the Company has not, does not, and will not have any of its obligations guaranteed by any Affiliate.

(z)         The Company shall have one Special Member who will consider only the interests of the Company, including its creditors, in acting or otherwise voting on the matters for which its approval is required. Except as provided in the immediately preceding, the Special Member shall not have any fiduciary duties to any other Member or any other Person bound by this Agreement; provided, however, the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing. To the fullest extent permitted by law, including Section 18-1101(e) of the Act, the Special Member shall not be liable to the Company, any other Member or any other Person bound by this Agreement for breach of contract or breach of duties (including fiduciary duties), unless the Special Member acted in bad faith or engaged in willful misconduct.

3.          With respect to the Class B Member, the Class B Member shall comply with each of the following:

(a)         The Class B Member (i) has been, is, and will be organized solely for the purpose of acquiring, owning, holding, selling, transferring, exchanging, managing and operating its limited liability company interests in the Company, entering into this Agreement and the other Transaction Documents, and transacting lawful business that is incident, necessary and appropriate to accomplish the foregoing, and (ii) has not owned, does not own, and will not own any asset or property other than (A) its limited liability company interests in the Subsidiaries and (B) incidental personal property necessary for the ownership or operation of such limited liability company interests.

(b)         The Class B Member has not engaged and will not engage in any business other than the ownership, management and operation of its limited liability company interests in the Company and business incidental thereto.

(c)         The Class B Member has not and will not enter into any contract or agreement with any Affiliate of the Class B Member, except upon terms and conditions that are intrinsically fair, commercially reasonable, and no less favorable to it than would be available on an arms-length basis with third parties other than any such party.

(d)         The Class B Member has not incurred and will not incur any Indebtedness other than its obligations under this Agreement and the other Transaction Documents.

(e)         Except as contemplated in this Agreement and the other Transaction Documents, the Class B Member has not made and will not make any loans or advances to any third party (including any Guarantor and/or any of their respective Affiliates), and has not and shall not acquire obligations or securities of its Affiliates.

(f)         The Class B Member is and intends to remain solvent and the Class B Member has, in all material respects, paid and will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets; provided that the foregoing shall not require any direct or indirect member, partner or shareholder of the Class B Member to make any additional capital contributions to the Class B Member; and provided further that it shall not be a breach of this subsection (f) to the extent that the Class B Member does (or did) not pay such debts or liabilities because it does not have (or did not have) sufficient cash flow.

(g)         The Class B Member has done or caused to be done, and will do, all things necessary to observe organizational formalities and preserve its existence, and the Class B Member has not and will not, (i) terminate or fail other than to a de minimis and immaterial extent, to comply with the provisions of its Organizational Documents, or (ii) from and after the date hereof only, unless the Class A Member has consented, amend, modify or otherwise change its certificate of formation, operating agreement or other Organizational Documents.

(h)         The Class B Member has, in all material respects, maintained and will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any other Person. The Class B Member’s assets will not be listed as assets on the financial statement of any other Person, provided, however, that the Class B Member’s assets may be included in a consolidated financial statement of its Affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Class B Member and such Affiliates and to indicate that the Class B Member’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person, and (ii) such assets shall be listed on the Class B Member’s own separate balance sheet. The Class B Member will file its own tax returns (to the extent the Class B Member is required to file any such tax returns) and will not file a consolidated federal income tax return with any other Person (for the avoidance of doubt, the inclusion of the results of operations, income, profits, losses or other tax attributes of a Person that is a disregarded entity for federal or state income tax purposes in the federal or state income tax returns of the beneficial owner of such Person shall not constitute the filing of an income tax return by such Person), except to the extent that the Class B Member is (i) required to file consolidated tax returns by law or (ii) is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law. The Class B Member has maintained and shall maintain its books, records, resolutions and agreements in accordance with this Agreement.

(i)          The Class B Member has been, will be, and at all times has held and will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of any Guarantor), 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 department or part of the other and shall maintain and utilize separate stationery, invoices and checks bearing its own name.

(j)          The Class B Member intends to 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; provided that nothing in this clause (j) shall be interpreted to require the partners, members or other principals of the Class B Member to make any capital contributions or loans to such entity or arrange for any such capital contribution or loan by any third party.

(k)          None of the Class B Member, any Affiliate Controlling the Class B Member, any Guarantor or any other Person holding any direct or Controlling indirect interest in the Class B Member, has sought or intends to seek or effect the liquidation, dissolution, winding up, consolidation or merger, in whole or in part, of the Class B Member.

(l)          The Class B Member has not and will not commingle the funds and other assets of the Class B Member with those of any Affiliate, any Guarantor or any other Person, and has held and will hold all of its assets in its own name.

(m)        The Class B Member has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate, any Guarantor or any other Person.

(n)        The Class B Member has not and will not assume or guarantee or become obligated for the debts of any other Person and does not and will not hold itself out to be responsible for or have its credit available to satisfy the debts or obligations of any other Person.

(o)         The Class B Member shall be a single purpose entity and its general partner shall have at all times at least one Special Member that has the rights and responsibilities described in this Agreement.

(p)        The Class B Member has conducted and shall conduct its business so that the assumptions made with respect to the Class B Member in any non-consolidation opinion delivered to the Class A Member in connection with its investment in the Company, or in any other non-consolidation opinion delivered subsequently to the Class A Member’s investment in the Company in any non-consolidation opinion delivered to the Class A Member in connection with its investment in the Company, or in any other non-consolidation opinion delivered subsequently to the Class A Member’s investment in the Company, shall be true and correct in all material respects. In connection with the foregoing, the Class B Member hereby covenants and agrees that it will comply in all material respects with or cause the compliance in all material respects with, (i) all of the facts and assumptions (whether regarding the Class B Member or any other Person) set forth in such non-consolidation opinion letter, (ii) all of the representations, warranties and covenants in this Schedule 5.15(a), and (iii) its Organizational Documents other than to a de minimis and immaterial extent.

(q)         Except as contemplated in this Agreement, the Class B Member has not permitted and will not permit any Affiliate, any Guarantor or any other Person holding any direct or indirect interest in the Class B Member, independent access to its bank accounts.

(r)          Except as contemplated in this Agreement, the Class B Member has, in all material respects, paid and shall pay its own liabilities and expenses, including the salaries of its own employees (if any) from its own funds; provided that the foregoing shall not require any direct or indirect member, partner or shareholder of the Class B Member to make any additional capital contributions to the Class B Member; provided further that it shall not be a breach of this subsection (r) to the extent that the Class B Member does (or did) not pay such liabilities or expenses because it does not have (or did not have) sufficient cash flow.

(s)         Except as contemplated in this Agreement, the Class B Member has compensated and shall compensate each of its consultants and agents from its own funds for services provided to it and pay from its own assets all obligations of any kind incurred; provided that it shall not be a breach of this subsection (s) to the extent the Class B Member does (or did) not compensate such consultants or agents or pay such obligations because it does not have (or did not have) sufficient cash flow.

(t)          The Class B Member has not, and without the prior written consent of the Special Member of its general partner, will not, (i) file a bankruptcy, insolvency or reorganization petition or otherwise institute insolvency proceedings or otherwise seek any relief under any laws relating to the relief from debts or the protection of debtors generally, (ii) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for such entity or for all or any portion of the Class B Member’s properties, (iii) make any assignment for the benefit of the Class B Member’s creditors, or (iv) take any action in furtherance of the foregoing.

(u)         Except as contemplated in this Agreement, the Class B Member has, in all material respects, maintained and will maintain an arm’s-length relationship with its Affiliates; provided that the foregoing shall not require any direct or indirect member, partner or shareholder of the Class B Member to make any additional capital contributions to the Class B Member.

(v)         The Class B Member has allocated and will allocate fairly and reasonably any overhead expenses that are shared with any Affiliate, including shared office space.

(w)        Except pursuant to the Transaction Documents, the Class B Member has not pledged and will not pledge its assets for the benefit of any other Person.

(x)         The Class B Member has and will have no obligation to indemnify its officers, directors, members or partners, as the case may be, or has such an obligation that is fully subordinated to the obligations owed to the Class A Member under this Agreement and the other Transaction Documents and will not constitute a claim against it if cash flow in excess of the amount required to pay the obligations owed to the Class A Member under this Agreement is insufficient to pay such indemnification obligation.

(y)         Except for the Guarantees, the Class B Member has not, does not, and will not have any of its obligations guaranteed by any Affiliate.

(z)         The general partner of the Class B Member shall have one Special Member who will consider only the interests of the Class B Member, including its creditors, in acting or otherwise voting on the matters for which its approval is required.

SCHEDULE 5.15(b)

Anti-Terrorism and Anti-Money Laundering Laws; Embargoed Persons

(a)          Compliance with Anti-Terrorism and Anti-Money Laundering Laws. (i) None of the Company, the Guarantors, the Subsidiaries, the Class B Member, their respective constituents, investors and Affiliates is in violation of any Legal Requirements relating to terrorism or money laundering, including Executive Order No. 13224 on Terrorist Financing (effective September 24, 2001 (the “Executive Order”) and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56, the “Patriot Act”).

(ii)         None of the Company, the Guarantors, the Subsidiaries, the Class B Member, their respective constituents, investors and Affiliates or other agents (if any), acting or benefiting in any capacity in connection with this Agreement or the transactions contemplated herein, is a “Prohibited Person” which is defined as:

(1)         a Person or entity that is listed in the Annex to, or is otherwise subject to the provisions of the Executive Order;

(2)         a Person or entity owned or Controlled by, or acting for or on behalf of any person or entity that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order;

(3)         a Person or entity with whom Landlord is prohibited from dealing or otherwise engaging in any transaction by any terrorism or money laundering Legal Requirements, including the Executive Order and the Patriot Act;

(4)         a Person or entity who commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order;

(5)         a Person or entity that is named as a “specially designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website, http://www.treas.gove/ofac/t11sdn.pdf or at any replacement website or other replacement official publication of such list; and

(6)         a Person or entity who is an Affiliate of a Person or entity listed above.

(iii)        None of the Company, the Guarantors, the Subsidiaries, the Class B Member, their respective constituents, investors and Affiliates, any of their respective brokers or other agents, if any, acting in any capacity in connection with this Agreement or the Properties is or knowingly will (i) conduct any business or engage in any transaction or dealing with any Prohibited Person, including the making or receiving of any contribution of funds, goods or services to or for the benefit of any Prohibited Person, (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order; or (iii) engage in or conspire to engage in any transaction that evades or avoids, or has the purposes of evading or avoiding, or attempts to violate, any of the prohibitions set forth in the Executive Order or the Patriot Act.

(iv)        The Guarantors, the Subsidiaries and the Class B Member shall not knowingly use funds from any Prohibited Person to make any payment due to the Company hereunder, and the Company shall not knowingly use funds from any Prohibited Person to make any payment due to the Class A Member hereunder, provided that this provision shall not excuse the Company, the Guarantors, the Subsidiaries or the Class B Member from any of their payment obligations or allow any of them to defer the same.

(v)         The Company, the Guarantors, and the Class B Member covenant and agree to deliver to the Class A Member any certification or other evidence requested from time to time by the Class A Member in its reasonable discretion, confirming, to its Knowledge, the compliance with this section by the Company, the Guarantors, the Subsidiaries and the Class B Member.

(b)          Embargoed Person. To the Knowledge of the Company, the Guarantors, and the Class B Member, (a) none of the funds or other assets of the Company or any of its Subsidiaries constitute property of, or are beneficially owned, directly or indirectly, by any Embargoed Person (as defined below); (b) no Embargoed Person has any interest of any nature whatsoever in the Company or any of its Subsidiaries (whether directly or indirectly); and (c) none of the funds of the Class B Member have been derived from any unlawful activity with the result that the investment in Class B Member is prohibited by law. “Embargoed Person” means any person, entity or government subject to trade restrictions under U.S. law, including but not limited to, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations promulgated thereunder.

SCHEDULE 6.1

Initial Capital Contributions and Percentage Interests of the Members

Member	Initial Capital Contribution		Initial Percentage Interest
Class A Member	$	99,799,180		0	%
Class B Member	$	100		100	%
Special Member	$	0.00		0	%

EX-10.23

Exhibit 10.23

Berkadia Loan No. 01-0085684 & 01-0086644

ASSUMPTION AND RELEASE AGREEMENT

(MEZZANINE)

THIS ASSUMPTION AND RELEASE AGREEMENT (MEZZANINE) (this “Agreement”) is entered into and made effective as of the 27th day of February, 2015 (the “Effective Date”), by and among WNT Mezz I, LLC, a Delaware limited liability company, with a mailing address at c/o Goldman Sachs & Co., 200 West Street, New York, New York 10282 (“Original Borrower”), ARC Hospitality Portfolio I Mezz, LP, a Delaware limited partnership, with a mailing address at c/o American Realty Capital, 405 Park Avenue, New York, New York 10022 (“New Borrower”), U.S. Bank National Association, as Trustee for the Registered Holders of EQTY 2014-MZ Mezzanine Trust, Commercial Mezzanine Pass-Through Certificates (“Lender”), with a mailing address at c/o Berkadia Commercial Mortgage LLC, 323 Norristown Road, Suite 300, Ambler, Pennsylvania 19002 (“Berkadia”), Whitehall Street Global Real Estate Limited Partnership 2007, a Delaware limited partnership (“Whitehall Street Global”), and Whitehall Parallel Global Real Estate Limited Partnership 2007, a Delaware limited partnership (“Whitehall Parallel Global”; Whitehall Street Global and Whitehall Parallel Global are individually and collectively, as the context may require, referred to as “Original Guarantor” and together with the Original Borrower, the “Original Indemnitors”), each with a mailing address at c/o Goldman Sachs & Co., 200 West Street, New York, New York 10282, and American Realty Capital Hospitality Operating Partnership, L.P., a Delaware limited partnership (“ARC OP”) and American Realty Capital Hospitality Trust, Inc., a Maryland corporation (“ARC REIT”; together with Whitehall Street Global and Whitehall Parallel Global, ARC OP and ARC REIT are individually and collectively, as the context may require, referred to as “New Guarantor” and together with the New Borrower, the “New Indemnitors”), each with a mailing address at c/o American Realty Capital, 405 Park Avenue, New York, New York 10022.

RECITALS:

The following recitals are a material part of this Agreement:

A.           German American Capital Corporation, a Maryland corporation (“Original Lender”), made a mezzanine loan in the aggregate original principal amount of $111,000,000.00 to Original Borrower, which Loan is evidenced by that certain (i) Mezzanine Promissory Note A-1, dated April 11, 2014 (together with all addenda, modifications, amendments, riders, exhibits and supplements thereto, the “A-1 Note”), from Original Borrower in the original principal amount of $66,600,000.00 (the “A-1 Loan”), and (ii) Mezzanine Promissory Note A-2, dated April 11, 2014 (together with all addenda, modifications, amendments, riders, exhibits and supplements thereto, the “A-2 Note” and together with the A-1 Note, the “Note”), from Original Borrower in the original principal amount of $44,400,000.00 (the “A-2 Loan” and together with the A-1 Loan, the “Loan”). The Loan is further evidenced, governed and/or secured by the

following agreements and documents, all executed and delivered, or caused to be executed and delivered, by Original Borrower for the benefit of Original Lender:

1.          Pledge and Security Agreement (Mezzanine), dated as of April 11, 2014, from Original Borrower for the benefit of Original Lender (the “Original Pledge Agreement”), as replaced by that certain Pledge and Security Agreement (Mezzanine) of even date herewith from New Borrower for the benefit of Lender (as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, the “Pledge Agreement”), securing the Lender’s interest in the Collateral, as more particularly described in the Pledge Agreement.

2.          that certain Mezzanine Loan Agreement, dated as of April 11, 2014, as amended by that certain First Amendment to Mezzanine Loan Agreement, dated as of June 18, 2014 (together with all addenda, modifications, amendments, riders, exhibits and supplements thereto, the “Loan Agreement”).

3.          that certain Collateral Assignment of Interest Rate Protection Agreement (Mezzanine), dated as of April 11, 2014 (together with all addenda, modifications, amendments, riders, exhibits and supplements thereto, the “Assignment of Rate Cap Agreement”); and

4.          that certain Indemnification Agreement, dated as of April 11, 2014 (together with all addenda, modifications, amendments, riders, exhibits and supplements thereto, the “Indemnification Agreement”).

B.           In connection with the Loan, Original Borrower and/or Original Guarantor also executed and/or delivered, or caused to be executed and/or delivered, the following agreements and documents for the benefit of Original Lender:

1.          that certain Environmental Indemnity Agreement (Mezzanine), dated April 11, 2014 (the “Original Environmental Indemnity”), executed by the Original Indemnitors;

2.          that certain Guaranty of Recourse Obligations (Mezzanine), dated April 11, 2014 (the “Original Guaranty”), executed by Original Guarantor; and

3.          those certain Subordination of Management Agreements (Mezzanine), each dated as of dated as of April 11, 2014 (the “Original Assignment of Management Agreements”); and

4.          that certain First Mezzanine Assignment of Title Insurance Proceeds (Multi-State), dated as of April 11, 2014 (together with all addenda, modifications, amendments, riders, exhibits and supplements thereto, the “Original Assignment of Title Insurance Proceeds”).

The agreements and documents set forth in Recital A and Recital B (excluding the Pledge Agreement) above are hereinafter referred to collectively as the “Original Borrower’s Loan Documents.”

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644 2

C.           Upon the Effective Date, New Borrower and/or New Guarantor are executing and delivering, or are causing to be delivered, to Lender the following documents, each dated as of the Effective Date:

1.          those certain UCC Financing Statements naming New Borrower as debtor therein, and naming Lender, as secured party therein, to be filed in the records of the Secretary of State of Delaware;

2.          that certain Environmental Indemnity Agreement (Mezzanine) from New Indemnitors in favor of Lender (the “New Environmental Indemnity”);

3.          that certain Guaranty of Recourse Obligations (Mezzanine) (the “New Guaranty”), executed and delivered by each New Guarantor in favor of Lender;

4.          that certain Subordination of Management Agreement (Mezzanine – Operating Agreement) executed by New Borrower, ARC Hospitality Portfolio I TRS, LLC, a Delaware limited liability company (“TRS LLC”), ARC Hospitality Portfolio I DEKS TRS, LLC, a Delaware limited liability company (“DEKS TRS”), ARC Hospitality Portfolio I NTC TRS, LP, a Delaware limited partnership (“NTC TRS”), Lender, and American Realty Capital Hospitality Grace Portfolio, LLC, a Delaware limited liability company (“ARC Manager”), as operator, for the benefit of Lender (the “Crestline Operating Agreement Subordination”);

5.          that certain Subordination of Management Agreement (Mezzanine – Management Agreement) executed by New Borrower, TRS LLC, DEKS LLC, NTC TRS, Lender, ARC Manager, as operator, and Crestline Hotels & Resorts, LLC, a Delaware limited liability company (“Crestline”), as manager, for the benefit of Lender (the “Crestline Management Agreement Subordination”);

6.          that certain Subordination of Management Agreement (Mezzanine) (Texas – Alcohol Management and Services Agreement) executed by Crestline, as manager, for the benefit of Lender, and acknowledged by ARC Hospitality Portfolio I TX Beverage Company, LLC, a Delaware limited liability company (the “Crestline TX Alcohol Management Agreement Subordination”, and together with the Crestline Operating Agreement Subordination and the Crestline Management Agreement Subordination, the “Crestline Subordination”);

7.          that certain Subordination of Management Agreement (Mezzanine – Operating Agreement) executed by New Borrower, ARC Hospitality Portfolio I MISC TRS, LLC, a Delaware limited liability company (“MISC TRS”), Lender, and ARC Manager, as operator, for the benefit of Lender (the “Pillar Operating Agreement Subordination”);

8.          that certain Subordination of Management Agreement (Mezzanine – Management Agreement) executed by New Borrower, MISC TRS, LLC, Lender, ARC Manager, as operator, and Pillar Hotels & Resorts, L.P. (“Pillar”), as manager, for the benefit of Lender (the “Pillar Management Agreement Subordination” and together with the Pillar Operating Agreement Subordination, the “Pillar Subordination”);

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644 3

9.          that certain Subordination of Management Agreement (Mezzanine – Operating Agreement) executed by New Borrower, MISC TRS, Lender, and ARC Manager, as operator, for the benefit of Lender (the “Musselman Operating Agreement Subordination”);

10.         that certain Subordination of Management Agreement (Mezzanine – Management Agreement) executed by New Borrower, MISC TRS, Lender, ARC Manager, as operator, and Musselman Hotels Management, L.L.C. (“Musselman”), as manager, for the benefit of Lender (the “Musselman Management Agreement Subordination” and together with the Musselman Operating Agreement Subordination, the “Musselman Subordination”);

11.         that certain Subordination of Management Agreement (Mezzanine – Operating Agreement) executed by New Borrower, ARC Hospitality Portfolio I HIL TRS, LLC, a Delaware limited liability company (“HIL TRS”), ARC Hospitality Portfolio I NTC HIL TRS, LP, a Delaware limited partnership (“NTC HIL TRS”), Lender, and ARC Manager, as operator for the benefit of Lender (the “Hilton-Hampton Operating Agreement Subordination”);

12.         that certain Subordination of Management Agreement (Mezzanine – Management Agreement) executed by New Borrower, HIL TRS, NTC HIL TRS, Lender, ARC Manager, as operator, and Hampton Inns Management LLC, a Delaware limited liability company (“Hilton-Hampton”), as manager, for the benefit of Lender (the “Hilton-Hampton Management Agreement Subordination” and together with the Hilton-Hampton Operating Agreement Subordination, the “Hilton-Hampton Subordination”);

13.         that certain Subordination of Management Agreement (Mezzanine – Operating Agreement) executed by New Borrower, HIL TRS, NTC HIL TRS, Lender, and ARC Manager, as operator for the benefit of Lender (the “Hilton-Homewood Operating Agreement Subordination”);

14.         that certain Subordination of Management Agreement (Mezzanine – Management Agreement) executed by New Borrower, HIL TRS, NTC HIL TRS, Lender, ARC Manager, as operator, and Hampton Inns Management LLC, a Delaware limited liability company (“Hilton-Homewood”), as manager, for the benefit of Lender (the “Hilton-Homewood Management Agreement Subordination” and together with the Hilton-Homewood Operating Agreement Subordination, the “Hilton-Homewood Subordination”);

15.         that certain Subordination of Management Agreements (Mezzanine – Operating Agreement) executed by New Borrower, ARC Hospitality Portfolio I MCK TRS, LLC, a Delaware limited liability company (“MCK TRS”), NTC TRS, Lender, and ARC Manager, as operator, for the benefit of Lender (the “McKibbon Operating Agreement Subordination”);

16.         that certain Subordination of Management Agreements (Mezzanine – Management Agreement) executed by New Borrower, MCK TRS, NTC TRS, Lender, ARC Manager, as operator, and McKibbon Hotel Management, Inc. (“McKibbon”), as manager, for the benefit of Lender (the “McKibbon Management Agreement Subordination” and together with the McKibbon Operating Agreement Subordination, the “McKibbon Subordination”);

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644 4

17.         that certain Subordination of Management Agreements (Mezzanine – Operating Agreement) executed by New Borrower, MISC TRS, Lender, and ARC Manager, as operator, for the benefit of Lender (the “Innventures Operating Agreement Subordination”);

18.         that certain Subordination of Management Agreements (Mezzanine – Management Agreement) executed by New Borrower, MISC TRS, Lender, ARC Manager, as operator, and InnVentures IVI, LP (“Innventures”), as manager, for the benefit of Lender (the “Innventures Management Agreement Subordination” and together with the Innventures Operating Agreement Subordination, the “Innventures Subordination”);

19.         that certain Subordination of Management Agreements (Mezzanine – Operating Agreement) executed by New Borrower, MISC TRS, Lender, ARC Manager, as operator, for the benefit of Lender (the “First Hospitality Operating Agreement Subordination”);

20.         that certain Subordination of Management Agreements (Mezzanine – Management Agreement) executed by New Borrower, MISC TRS, Lender, ARC Manager, as operator, and First Hospitality Group, Inc. (“First Hospitality” and together with ARC Manager, Crestline, Pillar, Musselman, Hilton-Hampton, Hilton-Homewood, McKibbon, and Innventures, the “Property Managing Entities”), as manager, for the benefit of Lender (the “First Hospitality Management Agreement Subordination” and together with the First Hospitality Operating Agreement Subordination, the “First Hospitality Subordination” and, together with the Crestline Subordination, the Pillar Subordination, the Musselman Subordination, the Hilton-Hampton Subordination, the Hilton-Homewood Subordination, the McKibbon Subordination, and the Innventures Subordination, the “Management Subordination”);

21.         that certain Subordination Agreement executed by and among TRS LLC, HIL TRS, MCK TRS, MISC TRS, DEKS TRS, NTC TRS, NTC HIL TRS, New Borrower and Lender (the “Operating Lease Subordinations”);

22.         that certain Recognition Agreement (Mezzanine) (the “Recognition Agreement”), executed by and between W2007 Equity Inns Senior Mezz, LLC, a Delaware limited liability company (“Qualified Preferred Equity Investor”), and Lender;

23.         that certain First Mezzanine Assignment of Title Insurance Proceeds (Multi-State) executed by and between New Borrower, Lender and such other parties as more particularly set forth therein (the “New Assignment of Title Insurance Proceeds”);

24.         that certain incumbency certificate of ARC REIT, ARC OP, New Borrower and each New Operating Lessee (as defined on Schedule I attached hereto) certifying as to the incumbency of each of ARC REIT, ARC OP, New Borrower and each New Operating Lessee, executed by an authorized officer of ARC REIT, for the benefit of Lender;

25.         those certain incumbency certificates of Whitehall Street Global, Whitehall Parallel Global and Qualified Preferred Equity Investor executed by an authorized officer of WH Advisors, L.L.C. 2007, a Delaware limited liability company, as applicable, for the benefit of Lender;

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644 5

26.         the Pledge Agreement; and

27.         this Agreement.

The agreements and documents set forth in Recital A and Recital C above (except for the Original Pledge Agreement and the incumbency certificates referred to as numbers 24-25), together with all other documents evidencing, securing or otherwise pertaining to the Loan (other than the documents and agreements set forth in Recital B), and such other agreements and documents as Lender may reasonably require, are hereinafter referred to collectively as the “Loan Documents”, and individually as a “Loan Document”.

D.           Original Lender assigned, sold and transferred its interest in the Loan and the Original Borrower’s Loan Documents to Lender pursuant to certain assignment documents, including, without limitation, that certain [Assignment], dated as of _______________, executed by Original Lender, as assignee, in favor of Lender, as assignee, and Lender is the current holder of all of Original Lender's interest in the Loan and Original Borrower’s Loan Documents.

E.           Lender, as the holder of the Note and beneficiary under the Loan Documents, has been asked to consent to the assumption by New Borrower and New Guarantor of the obligations of the Original Borrower and Original Guarantor, respectively, under the Loan Documents (the “Assumption”).

F.           Lender, acting by and through its servicer Berkadia, has agreed to consent to the Assumption subject to the terms and conditions stated below, including, without limitation, the execution and delivery of the agreements and documents set forth in Recital C above and such other documents and instruments as may be reasonably required by Lender.

G.           Unless the context requires otherwise, references in this Agreement to Original Borrower’s Loan Documents shall be deemed to refer to such documents as amended by this Agreement, and as such documents may be further amended, modified, extended or replaced from time to time.

CONTRACTUAL PROVISIONS:

NOW, THEREFORE, in consideration of the Recitals, which are incorporated herein as if set forth below in full as a substantive, contractual part of this Agreement, and the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.          Acknowledgement of Debt.

(a)          Lender, Original Borrower and New Borrower confirm and acknowledge that the aggregate outstanding principal balance under the Note immediately prior to the Effective Date is $102,800,212.95. New Borrower declares and acknowledges, for the specific reliance and benefit of Lender, that (i) New Borrower has no claim, or to New Borrower’s knowledge, defense, or right of offset of any kind or in any amount with respect to the Note or any of the other Loan Documents, and (ii) no amounts paid by New Borrower or

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644 6

Original Borrower to Lender pursuant to or in connection with the execution and delivery of this Agreement shall be applied to or set off against the principal balance of the Note.

(b)          Berkadia, as the servicing agent on behalf of Lender, hereby confirms, as of the Effective Date, that it has not issued to Original Borrower or Original Guarantor any written notice of, and has no actual knowledge of, a default or an Event of Default under the Original Borrower’s Loan Documents that has not been cured and is continuing. For the purposes of this Section 1(b), the term “actual knowledge” shall be limited to the actual knowledge of the undersigned, Gary A. Routzahn.

2.          Conditions Precedent; Consent to Assumption; Consent to Qualified Preferred Equity Investment; Consent to Operating Lease Agreements; Consent to Management Agreement.

(a)          Original Borrower, and New Borrower, each individually, represents and warrants to Lender as of the Effective Date that it has satisfied its respective requirements in connection with the Assumption of the Loan, the Qualified Preferred Equity Investment (as defined below), the execution of the Operating Lease Agreements (as defined below), and the execution of the Management Agreements (as defined below), as such requirements are set forth in the Original Borrower’s Loan Documents and that certain conditional consent letter issued by Berkadia on August 27, 2014 and executed by Original Borrower and New Borrower (the “Original Conditional Approval Letter”), as affected by that certain conditional approval extension letter issued by Berkadia on November 20, 2014 and executed by Original Borrower and New Borrower (the “Conditional Approval Extension Letter”), as further affected by that certain conditional approval letter issued by Berkadia on February 26, 2015 and executed by Original Borrower and New Borrower (the “Modifications Conditional Approval Letter” and together with the Original Conditional Approval Letter and the Conditional Approval Extension Letter, the “Conditional Approval Letter”). Lender hereby confirms receipt of the deliverables required in connection with the Assumption of the Loan, the Qualified Preferred Equity Investment, the execution of the Operating Lease Agreements, and the execution of the Management Agreements, as such requirements are set forth in the Original Borrower’s Loan Documents and the Conditional Approval Letter.

(b)          In reliance upon the representations, warranties and covenants set forth herein by Original Borrower, Original Guarantor, New Borrower and New Guarantor, Lender hereby consents to the Assumption and waives its right to accelerate the Loan pursuant to any provision of the Original Borrower’s Loan Documents which might otherwise provide such right to Lender solely on account of such Assumption. Lender’s consent to the Assumption is not intended to be and shall not be construed as its consent to any subsequent assumption which requires Lender’s consent pursuant to the terms of the Loan Agreement or any other Loan Document.

(c)          New Borrower hereby authorizes the Lender to file any and all UCC financing statements and UCC financing statement amendments as Lender may deem necessary from time to time including, without limitation, financing statements containing the description “all assets of New Borrower” or “all personal property of New Borrower” or similar language.

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Berkadia Loan No. 01-0085684 & 01-0086644 7

(d)          Concurrently with the Lender’s consent to the Assumption, Lender consents to a certain equity investment by W2007 Equity Inns Senior Mezz, LLC, a Delaware limited liability company (the “Qualified Preferred Equity Investor”), in ARC Hospitality Portfolio I Holdco LLC, a Delaware limited liability company (the “Qualified Preferred Equity Investment”), the owner of ninety-nine percent of the limited partnership interests in New Borrower, which Qualified Preferred Equity Investment is evidenced by that certain Amended and Restated Limited Liability Company Agreement, dated as of the date hereof, executed by and among American Realty Capital Hospitality Portfolio Member, LP, a Delaware limited partnership, Qualified Preferred Equity Investor and William G. Popeo, as initial special member.

(e)          Concurrently with the Lender’s consent to the Assumption, Lender consents to those certain operating lease agreements identified on Schedule I attached hereto and by this reference incorporated herein (collectively, the “Operating Lease Agreements”).

(f)          Concurrently with the Lender’s consent to the Assumption, Lender consents to those certain management agreements identified on Schedule II attached hereto and by this reference incorporated herein (collectively, the “Management Agreements”).

(g)          Original Borrower, New Borrower and Lender hereby acknowledge that the Cap Agreement (as defined in the Assignment of Rate Cap Agreement) has been novated pursuant to a Novation Confirmation dated on or about the Effective Date executed by SMBC Capital Markets, Inc., New Borrower and Original Borrower.

3.          Assumption of Obligations. As of the Effective Date, Original Borrower does hereby assign, transfer and convey to New Borrower all of its right, title and interest in and to the Loan Documents, and New Borrower hereby unconditionally accepts and assumes Original Borrower’s right, title and interest in and to the Loan Documents and agrees to comply with all covenants and obligations therein, including, without limitation, the obligation to pay the unpaid balance due and owing on the Loan and all interest thereon. Without limiting the foregoing, New Borrower agrees to keep and observe all of the covenants, terms and conditions required to be kept, observed and performed by Borrower pursuant to the Note and all of the other Loan Documents, to the same effect as if New Borrower were the original maker of, and a party to, the Loan Documents including, but not limited to, payment of all sums presently outstanding under the Note. New Borrower hereby adopts, ratifies and confirms as of the Effective Date all of the representations, warranties and covenants of Original Borrower contained in the Loan Documents as if made by New Borrower as of the Effective Date except to the extent such representations and warranties are matters which by their nature can no longer be true and correct as a result of the passage of time or apply only to the Original Borrower, Original Guarantor, or other facts or circumstances that existed only at the execution of the Original Borrower’s Loan Documents.

4.          Limited Release of Original Borrower and Original Guarantor; Reaffirmation.

(a)          In reliance upon the representations, warranties and covenants set forth herein by Original Borrower and Original Guarantor, Lender hereby releases: (i) Original

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Berkadia Loan No. 01-0085684 & 01-0086644 8

Borrower from any and all liability for repayment of the principal and interest under the terms of the Note and the other Original Borrower’s Loan Documents, and all other obligations under the Original Borrower’s Loan Documents, to the extent such obligations arise from matters first occurring from and after the Effective Date which are not caused by or arise out of any acts of Original Borrower or its Affiliates (as defined in the Loan Agreement); and (ii) Original Guarantor from any and all liability under the Original Guaranty and the Original Environmental Indemnity to the extent arising from matters first occurring from and after the Effective Date which are not caused by or arise out of any acts of Original Guarantor or its Affiliates. Lender hereby reserves all rights it may have against Original Borrower and Original Guarantor for acts or omissions of or events caused by Original Borrower or Original Guarantor, in each case, arising or occurring prior to the Effective Date.

(b)          The release of Original Borrower and Original Guarantor provided for in Section 4(a) above shall be deemed withdrawn and shall have no effect to the extent that this Agreement is held to be void or is determined to be unenforceable in its entirety by any court in a final non-appealable order as a result of any action or inaction by or on behalf of Original Borrower or Original Guarantor, or if any representation or warranty by Original Borrower or Original Guarantor made in connection with this Agreement is false or misleading in any material respect when made. In all cases, Original Borrower and Original Guarantor, as applicable, shall bear the burden of proof on the issue of the time at which an act or event first occurred or an obligation first arose, which is the subject of claimed liability under any of the Original Borrower’s Loan Documents.

(c)          Notwithstanding anything to the contrary contained herein, and subject to the release contained in Section 4(a) hereof, Original Borrower and Original Guarantor do hereby ratify and confirm their respective obligations under the Original Borrower’s Loan Documents to the extent arising or resulting from acts or omissions of or events caused by Original Borrower or Original Guarantor, in each case, arising or occurring prior to the Effective Date.

5.          Representations.

(a)          New Borrower represents and warrants to Berkadia and Lender that as of the Effective Date:

(i)          New Borrower is duly organized, validly existing and in good standing under the laws of its state of formation or organization and has full power and authority to conduct its affairs as now being conducted and as proposed to be conducted;

(ii)         New Borrower has full power and authority to enter into, execute, deliver and carry out this Agreement and the Loan Documents to which it is a party, by assumption or otherwise, and to perform its obligations hereunder and thereunder and all such actions have been duly authorized by all necessary actions on its part;

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(iii)        This Agreement and the other documents executed in connection herewith have been duly executed and delivered by New Borrower. This Agreement and the Loan Documents to which New Borrower is a party, by assumption or otherwise, constitute legal, valid and binding obligations of New Borrower, enforceable against New Borrower in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally;

(iv)        New Borrower has received and reviewed copies of all of the Loan Documents;

(v)         New Borrower nor, to New Borrower’s knowledge, any person owning an interest in New Borrower (except that New Borrower’s knowledge shall not require any investigation into ownership of issued shares of ARC REIT), is a country, territory, individual or entity named on a list maintained by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), or is a Specially Designated National or Blocked Person under the programs administered by OFAC;

(vi)        Except in connection with the Qualified Preferred Equity Investment (as defined in the Loan Agreement), no equity interest in New Borrower has been pledged, hypothecated or otherwise encumbered as security for any obligation, and none of the capital contributed to New Borrower was made in the form of a loan;

(vii)       There is no litigation or other proceeding against New Borrower pending or, to New Borrower’s knowledge, threatened in writing against New Borrower, which, if adversely determined, is reasonably likely to materially and adversely affect the financial condition of New Borrower or its ability to legally perform its obligations under this Agreement and the other Loan Documents;

(viii)      The execution, delivery and performance of this Agreement, and the performance of New Borrower’s obligations under the Loan Documents, (A) does not conflict with or result in a violation of New Borrower’s organizational documents or any judgment, order or decree of any court or arbiter in any proceeding to which New Borrower is a party, and (B) does not conflict with, or constitute a material breach of, or constitute a material default under, any contract, agreement or other instrument by which New Borrower is bound or to which New Borrower is a party;

(ix)         There is no bankruptcy, receivership or insolvency proceeding pending or threatened against New Borrower; and

(x)          No proceeding is pending for the dissolution or annulment of New Borrower, and all license, income and franchise taxes due and payable by New Borrower have been paid in full, unless the non-payment of such taxes could

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Berkadia Loan No. 01-0085684 & 01-0086644 10

not be reasonably expected to have a material adverse change in the financial condition, operations or business of New Borrower.

(b)          Each New Guarantor individually represents and warrants to Berkadia and Lender that as of the Effective Date, solely with respect to itself:

(i)          Such New Guarantor is duly organized, validly existing and in good standing under the laws of the state of its formation and has full power and authority to conduct its affairs as now being conducted and as proposed to be conducted;

(ii)         This Agreement, the New Guaranty, the New Environmental Indemnity and the other documents executed by such New Guarantor in connection herewith have been duly executed and delivered by such New Guarantor. This Agreement, the New Guaranty, the New Environmental Indemnity and such other documents constitute such New Guarantor’s legal, valid and binding obligations, enforceable against such New Guarantor in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally;

(iii)        Such New Guarantor has received and reviewed copies of all of the Loan Documents;

(iv)        Such New Guarantor nor, to such New Guarantor’s knowledge, any person owning an interest in such New Guarantor (except that such New Guarantor’s knowledge shall not require any investigation into ownership of issued shares of ARC REIT), is a country, territory, individual or entity named on a list maintained by OFAC, or is a Specially Designated National or Blocked Person under the programs administered by OFAC;

(v)         There is no litigation or other proceeding against such New Guarantor pending or, to such New Guarantor’s knowledge, threatened in writing against such New Guarantor, which, if adversely determined, is reasonably likely to materially and adversely affect the financial condition of such New Guarantor or its ability to legally perform its obligations under this Agreement and the other Loan Documents to which such New Guarantor is a party;

(vi)        Such New Guarantor has full power and authority to enter into, execute, deliver and perform this Agreement and the New Guaranty, the New Environmental Indemnity and the other documents executed by such New Guarantor in connection herewith and such execution, delivery and performance (A) have been duly and validly authorized by all necessary actions on the part of such New Guarantor, (B) does not conflict with or result in a violation of such New Guarantor’s organizational documents or any judgment, order or decree of any court or arbiter in any proceeding to which such New Guarantor is a party, and (C) does not conflict with, or constitute a material breach of, or constitute a

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material default under, any contract, agreement or other instrument by which such New Guarantor is bound or to which such New Guarantor is a party;

(vii)       There is no bankruptcy, receivership or insolvency proceeding pending or threatened against such New Guarantor; and

(viii)      No proceeding is pending for the dissolution or annulment of such New Guarantor, and all license, income and franchise taxes due and payable by such New Guarantor have been paid in full, unless the non-payment of such taxes could not be reasonably expected to have a material adverse change in the financial condition, operations or business of New Guarantor.

(c)          Original Borrower represents and warrants to Berkadia and Lender that as of the Effective Date:

(i)          Original Borrower has not received a security instrument or security agreement from New Borrower encumbering the Collateral to secure the payment of any sums due Original Borrower or obligations to be performed by New Borrower;

(ii)         There exist no defenses, offsets or counterclaims by Original Borrower to this Agreement or the Original Borrower’s Loan Documents;

(iii)        There is no Event of Default by Original Borrower under the provisions of Original Borrower’s Loan Documents executed or assumed by Original Borrower, nor, to Original Borrower’s knowledge, are there any conditions which with the giving of notice or the passage of time or both may constitute an Event of Default by Original Borrower under the provisions of the Original Borrower’s Loan Documents;

(iv)        The Original Borrower’s Loan Documents are in full force and effect;

(v)         There are no subordinate liens of any kind covering or relating to the Collateral, nor has notice of a lien or notice of intent to file a lien been received;

(vi)        There is no litigation or other proceeding against Original Borrower or the Collateral pending or overtly threatened, by written communication to Original Borrower, wherein an unfavorable decision might reasonably result in a material adverse change in the financial condition of Original Borrower or its ability to legally perform its obligations under this Agreement and the Original Borrower’s Loan Documents;

(vii)       There is no bankruptcy, receivership or insolvency proceeding pending or, to Original Borrower’s knowledge, threatened in writing against Original Borrower;

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(viii)      No proceeding is pending for the dissolution or annulment of Original Borrower, and all license, income and franchise taxes due and payable by Original Borrower have been paid in full; and

(ix)         Original Borrower has full power and authority to enter into, execute, deliver and perform this Agreement and such execution, delivery and performance (A) have been duly and validly authorized by all necessary actions on the part of Original Borrower, (B) does not conflict with or result in a violation of Original Borrower’s organizational documents or any judgment, order or decree of any court or arbiter in any proceeding to which Original Borrower is a party, and (C) does not conflict with, or constitute a material breach of, or constitute a material default under, any contract, agreement or other instrument by which Original Borrower is bound or to which Original Borrower is a party.

(d)          Each Original Guarantor represents and warrants to Berkadia and Lender that as of the Effective Date:

(i)          As of the Effective Date, there is no Event of Default or, to Original Guarantor’s knowledge, event which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Original Borrower’s Loan Documents executed or assumed by Original Guarantor;

(ii)         The Original Borrower’s Loan Documents executed by Original Guarantor are in full force and effect;

(iii)        There is no litigation or other proceeding against Original Guarantor pending or overtly threatened, by written communication to Original Guarantor, wherein an unfavorable decision might reasonably result in a material adverse change in the financial condition of Original Guarantor or its ability to legally perform its obligations under this Agreement;

(iv)        Original Guarantor has the full power and authority to enter into this Agreement and perform its obligations hereunder. The execution, delivery and performance of this Agreement and the other documents contemplated herein by Original Guarantor (A) have been duly and validly authorized by all necessary action on the part of Original Guarantor, (B) does not conflict with or result in a violation of Original Guarantor’s organizational documents or any judgment, order or decree of any court or arbiter in any proceeding to which Original Guarantor is a party, and (C) does not conflict with, or constitute a material breach of, or constitute a material default under, any contract, agreement or other instrument by which Original Guarantor is bound or to which Original Guarantor is a party;

(v)         There is no bankruptcy, receivership or insolvency proceeding pending or, to Original Guarantor’s knowledge, threatened in writing against Original Guarantor; and

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(vi)        No proceeding is pending for the dissolution or annulment of Original Guarantor, and all license, income and franchise taxes due and payable by Original Guarantor have been paid in full.

6.          Financial Information.

(a)          New Borrower hereby represents and warrants to Lender that all information and materials regarding New Borrower and its affiliates provided by or on behalf of New Borrower to Berkadia were true and correct in all material respects as of the date of delivery thereof and remain materially true and correct as of the Effective Date.

(b)          Each New Guarantor hereby represents and warrants to Lender, solely as to itself, that all information and materials regarding such New Guarantor and its affiliates provided by or on behalf of such New Guarantor to Berkadia were true and correct in all material respects as of the date of delivery thereof and remain materially true and correct as of the Effective Date.

7.          Addresses. Lender, New Borrower and New Guarantor agree that all notice provisions contained in the Loan Documents are hereby modified to amend the notice address for Lender, New Borrower and New Guarantor, and that from and after the Effective Date, the notice addresses for Lender, New Borrower and New Guarantor, respectively, are as follows:

If to Lender:

U.S. Bank National Association, as Trustee for the Registered Holders of

EQTY 2014-MZ Mezzanine Trust, Commercial Mezzanine Pass-
Through Certificates

c/o Berkadia Commercial Mortgage LLC

323 Norristown Road, Suite 300

Ambler, PA 19002

Attention: Client Relations Manager for

Loan Nos. 01-0085684 & 01-0086644

Facsimile No.: (215) 328-3832

If to New Borrower:

ARC Hospitality Portfolio I Mezz, LP

c/o American Realty Capital

405 Park Avenue

New York, New York 10022

Facsimile No.: (212) 421-5799

If to New Guarantor:

Whitehall Street Global Real Estate Limited Partnership 2007 and Whitehall Parallel Global Real Estate Limited Partnership 2007

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c/o Goldman Sachs & Co.

200 West Street

New York, New York 10282

Attention: Chief Financial Officer

Facsimile No.: (212) 357-5505

And

American Realty Capital Hospitality Operating Partnership, L.P. and

American Realty Capital Hospitality Trust, Inc.

c/o American Realty Capital

405 Park Avenue

New York, New York 10022

Facsimile No.: (212) 421-5799

with a copy to:

Goldman Sachs Realty Management, L.P.

6011 Connection Drive

Irving, Texas 7039

Attention: Investment Management

Facsimile No.: (972) 368-3699

with a copy to:

Sullivan & Cromwell LLP

125 Broad Street

New York, NY 10004

Attention: Anthony J. Colletta, Esq.

Facsimile No. (212) 291-9029

with a copy to:

Goodwin Procter LLP

53 State Street

Boston, MA 02109

Attn: Samuel L. Richardson, Esq.

Facsimile No.: (617) 523-1231

8.          Release of Berkadia and Lender. Original Borrower, New Borrower, Original Guarantor and New Guarantor hereby each, as to its own Claims only, unconditionally and irrevocably releases and forever discharges Berkadia and Lender and their respective successors, assigns, agents, directors, officers, employees, and attorneys (collectively, the “Indemnitees”) from all Claims, as defined below, and each, as to its own Claims only, agrees to indemnify the Indemnitees, hold the Indemnitees harmless, and defend the Indemnitees with counsel reasonably acceptable to the Indemnitees from and against any and all claims, losses,

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causes of action, costs and expenses of every kind or character in connection with the Claims in connection with this Agreement (excluding any Claims arising out of or resulting from the gross negligence, illegal acts, bad faith or willful misconduct of any of the Indemnitees). As used in this Agreement, the term “Claims” shall mean any and all possible claims, demands, actions, costs, expenses and liabilities whatsoever, known or unknown, at law or in equity, originating in whole or in part on or before the Effective Date, which each of Original Borrower, New Borrower, Original Guarantor or New Guarantor or any of their respective directors, partners, principals, affiliates, members, shareholders, officers, agents, employees or successors, may now or hereafter have against the Indemnitees, if any, and irrespective of whether any such Claims arise out of contract, tort, violation of laws, or regulations, or otherwise in connection with the Loan or any of the Loan Documents (other than the Assumption Agreement) or the Original Borrower’s Loan Documents, including, without limitation, any contracting for, charging, taking, reserving, collecting or receiving interest in excess of the highest lawful rate applicable thereto and any loss, cost or damage, of any kind or character, arising out of or in any way connected with or in any way resulting from the acts, actions or omissions of any of the Indemnitees (excluding any claims, demands, actions, costs, expenses and liabilities arising out of or resulting from the gross negligence, illegal acts, bad faith or willful misconduct of any of the Indemnitees), including any requirement that the Loan Documents or Original Borrower’s Loan Documents be modified as a condition to the transactions contemplated by this Agreement. Original Borrower, New Borrower, Original Guarantor and each New Guarantor agree that Berkadia and Lender have no fiduciary or similar obligations to Original Borrower, New Borrower, Original Guarantor or New Guarantor or any of them and that their relationship is strictly that of creditor and debtor. This release is accepted by Berkadia and Lender pursuant to this Agreement and shall not be construed as an admission of liability on the part of either of them. Original Borrower, New Borrower, Original Guarantor and each New Guarantor hereby represents and warrants, each as to itself only, that it is the current legal and beneficial owner of all Claims, if any, applicable to it and released hereby by such party and has not assigned, pledged or contracted to assign or pledge any such Claim to any other person.

9.          Confirmation of Waivers. New Borrower, without limiting the generality of its obligations under the Loan Documents, hereby confirms and ratifies the submission to jurisdiction and waivers set forth in the Loan Documents.

10.         Binding Effect. This Agreement shall be binding upon the parties and their respective heirs, executors, administrators, successors, permitted assigns and representatives.

11.         Ratification. Lender and New Borrower hereby ratify and affirm all of the Loan Documents and all of its or the other’s, as applicable, respective rights, agreements, obligations, priorities, reservations, promises and waivers as made and agreed and contained therein and as assumed pursuant to this Agreement by New Borrower, all of which shall remain in full force and effect.

12.         No Impairment of Lien; No Satisfaction. Nothing set forth herein shall affect the priority or extent of the lien of any of the Loan Documents, nor, except as expressly set forth herein, release or change the liability of any party who may now be or after the Effective Date, become liable, primarily or secondarily, under the Loan Documents. This Agreement does

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not, and shall not be construed to, constitute the creation of new indebtedness or the satisfaction, discharge or extinguishment of the debt secured by the Loan Documents.

13.         Third Party Beneficiary Status of Berkadia. New Borrower, Original Borrower, Original Guarantor and New Guarantor hereby each acknowledges and agrees that Berkadia, its successors and assigns, are all intended third party beneficiaries of this Agreement.

14.         Bankruptcy Remote Single Purpose Entities. New Borrower is currently a bankruptcy-remote single purpose entity and will take all necessary company action (including, but not limited to, revising and filing charter and control documents in form, substance and structure as may be reasonably required by Lender) in order for the New Borrower to continue as a bankruptcy-remote single purpose entity.

15.         Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering Laws. For the avoidance of doubt, New Borrower shall comply with the requirements of Section 4.32 of the Loan Agreement.

16.         Fees. Original Borrower, New Borrower and Lender have agreed that, simultaneously with the execution hereof, all fees, costs, and charges arising in connection with the execution of this Agreement, including without limitation, all reasonable attorneys’ fees, title company fees, title insurance premiums, recording costs, assumption and/or transfer fees and other closing costs incurred by Lender in connection with this Agreement, will be paid as of the Effective Date, and that Lender shall have no obligation whatsoever for payment thereof. New Borrower acknowledges and agrees that none of the fees, costs, and charges paid in connection with the execution of this Agreement shall be applied to or set off against the principal balance of the Note.

17.         Miscellaneous.

(a)          Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York pursuant to Section 5-1401 of the New York General Obligations Law.

(b)          Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

(c)          Modifications. No change or modification of this Agreement shall be valid unless the same is in writing and signed by all parties hereto.

(d)          Complete Agreement. This Agreement and the Loan Documents represent the complete agreement among the parties with regard to the items set forth herein, and there are no representations, covenants, warranties, agreements or conditions, oral or written, between the parties not set forth in this Agreement and the Loan Documents.

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(e)          Headings, Schedules and Exhibits. The Article and/or Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. The Schedules and Exhibits annexed hereto are hereby incorporated herein as a part of this Agreement with the same effect as if set forth in the body hereof.

(f)          Counterparts. This Agreement may be executed in any number of counterparts, each of which when taken together shall be deemed an original, but all of which shall together constitute one and the same instrument.

(g)          Joint and Several Liability. If New Borrower consists of more than one person or entity, each is jointly and severally liable to perform the obligations of New Borrower hereunder, and all representations, warranties, covenants and agreements made by New Borrower are joint and several.

18.         Supremacy Clause. It is hereby agreed that the terms and conditions of the Note and other Loan Documents, as modified by this Agreement, shall remain in full force and effect and shall be binding upon New Borrower. It is understood and agreed that in the event there are any conflicting or omitted provisions or variations between the terms, conditions, rights, or remedies in the Note or any other Loan Document (other than this Agreement) and the terms of this Agreement, those terms, conditions, rights or remedies which are most favorable to Lender shall remain in full force and effect and shall prevail. A default under the terms and conditions of this Agreement shall constitute a default under the terms and conditions of the Note and other Loan Documents.

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

20.         Further Assurances. Original Borrower, Original Guarantor, New Borrower and New Guarantor shall cooperate with Lender and shall execute and deliver, or cause to be executed and delivered, all such other documents and instruments, and shall take all such other action that Lender may request from time to time in order to accomplish and satisfy the provisions and purposes of this Agreement, including such confirmations and/or corrective instruments as Lender reasonably may require, provided that such documents, instruments or actions shall not increase the liabilities or obligations of Original Borrower, Original Guarantor, New Borrower or New Guarantor under this Agreement of any of the other Loan Documents.

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21.         Modification to Loan Documents. From and after the Effective Date, New Borrower and Lender hereby agree that the Loan Documents are hereby amended as follows:

(a) The defined term “Loan Party” as provided in Section 1.1 of the Loan Agreement shall include SPC Party.

(b) The defined term “Pledged Collateral” as provided in Section 1.1 of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

“Pledged Collateral” shall mean (A) the 100% ownership interest of Borrower in (i) ARC Hospitality Portfolio I Owner, LLC, a Delaware limited liability company, (ii) ARC Hospitality Portfolio I BHGL Owner, LLC, a Delaware limited liability company, (iii) ARC Hospitality Portfolio I PXGL Owner, LLC, a Delaware limited liability company, (iv) ARC Hospitality Portfolio I GBGL Owner, LLC, a Delaware limited liability company, (v) ARC Hospitality Portfolio I NFGL Owner, LLC, a Delaware limited liability company, (vi) ARC Hospitality Portfolio I MBGL 1000 Owner, LLC, a Delaware limited liability company, (vii) ARC Hospitality Portfolio I MBGL 950 Owner, LLC, a Delaware limited liability company, (viii) ARC Hospitality Portfolio I NTC Owner, LP, a Delaware limited partnership, (ix) ARC Hospitality Portfolio I DLGL Owner, LP, a Delaware limited partnership, and (x) ARC Hospitality Portfolio I SAGL Owner, LP, a Delaware limited partnership, and (B) the 100% ownership interest of Borrower in ARC Hospitality Portfolio I NTC Owner GP, LLC, a Delaware limited liability company and the general partner of (i) ARC Hospitality Portfolio I NTC Owner, LP, a Delaware limited partnership, (ii) ARC Hospitality Portfolio I DLGL Owner, LP, a Delaware limited partnership, and (iii) ARC Hospitality Portfolio I SAGL Owner, LP, a Delaware limited partnership.

(a) Schedule I of the Loan Agreement is hereby deleted in its entirety and replaced with that certain schedule of Individual Properties and Allocated Loan Amounts attached hereto as Exhibit A.

(b) Schedule I-M1 of the Loan Agreement is hereby deleted in its entirety and replaced with that certain schedule of Mortgage Loan Allocated Loan Amounts attached hereto as Exhibit B.

(c) Schedule III to the Loan Agreement is hereby deleted in its entirety and replaced with that certain Organizational Chart of New Borrower and Tax ID Numbers attached hereto as Exhibit C and by this reference incorporated herein.

(d) Schedule VI to the Loan Agreement is hereby deleted in its entirety and replaced with that certain schedule of Intellectual Property/Websites attached hereto as Exhibit D and by this reference incorporated herein.

Assumption Agreement (Mezzanine)
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(e) Schedule VIII to the Loan Agreement is hereby amended to include the additional documents pertaining to the Ground Leases listed on that certain schedule of additional Ground Lease documents attached hereto as Exhibit E and by this reference incorporated herein.

(f) Schedule XI to the Loan Agreement is hereby deleted in its entirety and replaced with that certain Rent Roll attached hereto as Exhibit F and by this reference incorporated herein.

(g) Schedule XII to the Loan Agreement is hereby deleted in its entirety and replaced with that certain schedule of Franchise Agreements attached hereto as Exhibit G and by this reference incorporated herein.

(h) Schedule XVII to the Loan Agreement is hereby deleted in its entirety and replaced with that certain schedule of Expiring Franchise Properties attached hereto as Exhibit H and by this reference incorporated herein.

(i) Schedule XVIII to the Loan Agreement is hereby deleted in its entirety and replaced with that certain Scheduled PIP attached hereto as Exhibit I and by this reference incorporated herein.

(j) Schedule XXI to the Loan Agreement is hereby deleted in its entirety and replaced with that certain PIP Work Other Than Scheduled PIP attached hereto as Exhibit J and by this reference incorporated herein.

(k) The term “ARC Hospitality” as defined in Section 4.14.2(b) of the Loan Agreement shall mean American Realty Capital Hospitality Properties, LLC or American Realty Capital Hospitality Grace Portfolio, LLC, a Delaware limited liability company, a wholly-owned subsidiary of American Realty Capital Hospitality Properties, LLC.

(l) Section 10.4(a) of the Loan Agreement is hereby modified by deleting “CT Corporation System, 111 Eighth Avenue, New York, New York 10011” and replacing it with “Corporation Service Company, 1180 Avenue of the Americas, Suite 210, New York, New York 10036-8401”.

(m) For the avoidance of doubt, ARC Hospitality Portfolio I Mezz GP, LLC, a Delaware limited liability company, the general partner of Borrower shall be deemed to be an SPC Party under the Loan Agreement and the other Loan Documents.

(n) The provisions provided on Schedule III attached hereto and by this reference incorporated herein are hereby deleted in their entirety and restated or amended and restated as provided therein to incorporate references to the SPC Party.

(o) Section 7.2(g)(iv) of the Loan Agreement is hereby deleted in its entirety.

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IN WITNESS WHEREOF, the parties hereto have executed this Assumption and Release Agreement as of the day and year first above written.

ORIGINAL BORROWER:

WNT Mezz I, LLC, a Delaware limited liability
company

By:

Name:

Title:

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Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

NEW BORROWER:
ARC Hospitality Portfolio I Mezz, LP, a Delaware limited partnership
By:	ARC Hospitality Portfolio I NTC Owner
	GP, LLC, a Delaware limited liability
	Company
	By:
	Name:	Jonathan Mehlman
	Title:	CEO and President

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Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

LENDER:
U.S. Bank National Association, as Trustee for the Registered Holders of EQTY 2014-MZ Mezzanine Trust, Commercial Mezzanine Pass- Through Certificates
By:	KeyBank National Association
Its:	Master Servicer
	By:	Berkadia Commercial Mortgage LLC, a Delaware limited liability company
	Its:	Subservicer
	By:
	Name:		Gary A. Routzahn
			Authorized Representative

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Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

ORIGINAL GUARANTOR:
Whitehall Street Global Real Estate Limited Partnership 2007, a Delaware limited partnership
By:	WH Advisors, L.L.C. 2007, a Delaware limited liability company, its General Partner
By:
Name:
Title:
Whitehall Parallel Global Real Estate Limited Partnership 2007, a Delaware limited partnership
By:	WH Advisors, L.L.C. 2007, a Delaware limited liability company, its General Partner
By:
Name:
Title:

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Assumption Agreement (Mezzanine)
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NEW GUARANTOR:
American Realty Capital Hospitality Operating Partnership, L.P., a Delaware limited partnership
By:	American Realty Capital Hospitality Trust, Inc., a Maryland corporation, its general partner
	By:
	Name:	Jonathan Mehlman
	Title:	CEO and President
American Realty Capital Hospitality Trust, Inc., a Maryland corporation
By:
Name:	Jonathan Mehlman
Title:	CEO and President

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Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

Whitehall Street Global Real Estate Limited Partnership 2007, a Delaware limited partnership
By:	WH Advisors, L.L.C. 2007, a Delaware limited liability company, its General Partner
By:
Name:
Title:
Whitehall Parallel Global Real Estate Limited Partnership 2007, a Delaware limited partnership
By:	WH Advisors, L.L.C. 2007, a Delaware limited liability company, its General Partner
By:
Name:
Title:

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

SCHEDULE I

Operating Lease Agreements

(see attached)

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

SCHEDULE II

Management Agreements

(see attached)

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

SCHEDULE III

Provisions Regarding SPC Party

(a)                         Section 3.1.1 of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

3.1.1 Organization; Special Purpose. Each of Borrower, SPC Party and each Individual Owner is duly organized, validly existing and in good standing with full power and authority to own its assets and conduct its business, and is duly qualified and in good standing in all jurisdictions in which the ownership or lease of its property or the conduct of its business requires such qualification, and Borrower has taken all necessary action to authorize the execution, delivery and performance of this Agreement and the other Loan Documents by it, and has the power and authority to execute, deliver and perform under this Agreement, the other Loan Documents and all the transactions contemplated hereby. Each of Borrower, SPC Party and each Individual Owner is, and at all times since the date of its formation has been (but only to the extent that the applicable requirements set forth in Schedule V speak of a time prior to the Closing Date), a Special Purpose Bankruptcy Remote Entity. Borrower has provided Lender with true, correct and complete copies of Borrower's, SPC Party’s and each Individual Owner's current (and since the date of its inception) organizational documents.

(b)                         Section 3.1.2 of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

3.1.2 Proceedings; Enforceability. This Agreement and the other Loan Documents have been duly authorized, executed and delivered by Borrower and constitute a legal, valid and binding obligation of Borrower, enforceable against Borrower in accordance with their respective terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally, and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). The Loan Documents are not subject to any right of rescission, set-off, counterclaim or defense by Borrower, any SPC Party, any Individual Owner or any Guarantor including the defense of usury, nor would the operation of any of the terms of the Loan Documents, or the exercise of any right thereunder, render the Loan Documents unenforceable, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally, and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), and none of Borrower, and SPC Party, any Individual Owner or any Guarantor have asserted any right of rescission, set-off, counterclaim or defense with respect thereto.

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

(c)                         Section 3.1.4 of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

3.1.4 Litigation. There is no action, suit, proceeding or investigation pending or, to Borrower's knowledge, threatened in writing against Borrower, any SPC Party, any Individual Owner, any Guarantor, Manager (but only as it relates to any Individual Property), the Collateral or any Individual Property in any court or by or before any other Governmental Authority which, if adversely determined, is reasonably likely to materially and adversely affect the condition (financial or otherwise) or business of Borrower (including the ability of Borrower to carry out the transactions contemplated by this Agreement), such SPC Party, such Individual Owner, any Guarantor (including the ability of any Guarantor to perform its obligations under the Guaranty), Manager (but only as it relates to any Individual Property, including such Manager's ability to perform its obligations under any Management Agreement), the Collateral or the condition or ownership of such Individual Property.

(d)                         Section 4.4 of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

Section 4.4 Special Purpose. Without in any way limiting the provisions of this Article 4, Borrower hereby represents and warrants to, and covenants with, Lender that since the date of Borrower's, each SPC Party’s, each Individual Owner's, each Individual Owner's general partner's, and each Liquor Subsidiary's (as defined in the Mortgage Loan Agreement) formation and at all times on and after the date hereof and until such time as the Obligations shall be paid and performed in full, Borrower, each SPC Party, each Individual Owner and each Liquor Subsidiary has at all times been and shall at all times be a Special Purpose Bankruptcy Remote Entity. Neither Borrower, any SPC Party, any Individual Owner, any Individual Owner's general partner nor any Liquor Subsidiary shall directly or indirectly make any change, amendment or modification to its organizational documents, or otherwise take any action which could result in Borrower, any SPC Party, any Individual Owner, any Individual Owner's general partner, or any Liquor Subsidiary not being a Special Purpose Bankruptcy Remote Entity.

(e)                         Section 4.5 of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

Section 4.5 Existence; Compliance with Legal Requirements. Each of Borrower, each SPC Party and each Individual Owner shall do or cause to be done all things necessary to preserve, renew and keep in full force and effect its existence and all rights, licenses, permits, franchises and all applicable governmental authorizations necessary for the operation of the Properties and comply with all Legal Requirements applicable to it, the Collateral and the Properties.

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

(f)                         Section 4.7 of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

Section 4.7 Litigation. Borrower shall give prompt notice to Lender of any litigation or governmental proceedings pending or threatened in writing against any Individual Property, the Collateral, Borrower, any SPC Party, any Individual Owner or Manager (but only as it relates to any Individual Property and only if Borrower has received notice of any such litigation or governmental proceedings) which might materially adversely affect such Individual Property or the Collateral or Borrower's, such SPC Party’s, such Individual Owner's or Manager's condition (financial or otherwise) or business (including Borrower's ability to perform its Obligations hereunder or under the other Loan Documents but, in the case of Manager's condition or business, only to the extent Borrower has a reasonable belief that such litigation or proceeding might materially adversely affect Manager's condition or business).

(g)                         Section 4.23 of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

Section 4.23 Dissolution. Borrower shall not and shall not permit Owner to (i) engage in any dissolution, liquidation or consolidation or merger with or into any other business entity, (ii) engage in any business activity not related to the ownership and operation of the Properties and the Collateral, (iii) transfer, lease or sell, in one transaction or any combination of transactions, all or substantially all of the property or assets of Borrower except to the extent expressly permitted by the Loan Documents and the Mortgage Loan Documents, or (iv) cause, permit or suffer any SPC Party to (A) dissolve, wind up or liquidate or take any action, or omit to take any action, as a result of which SPC Party or Owner would be dissolved, wound up or liquidated in whole or in part, or (B) amend, modify, waive or terminate, the certificate of incorporation, bylaws, certificate of formation or operating agreement of such SPC Party or Owner, in each case without obtaining the prior consent of Lender.

(h)                         Section 8.1(vii) of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

if Borrower, any SPC Party, Guarantor, any Individual Owner or Approved Mezzanine Borrower shall make an assignment for the benefit of creditors;

(i)                         Section 8.1(viii) of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

if a receiver, liquidator or trustee shall be appointed for Borrower, any Guarantor, any SPC Party, any Individual Owner or Approved Mezzanine Borrower, or if Borrower, any SPC Party, any Guarantor, any Individual Owner or any Approved Mezzanine Borrower shall be adjudicated a bankrupt or insolvent, or if any petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any similar federal or state law, shall be filed by or against,

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

consented to, or acquiesced in by, Borrower, any SPC Party, any Guarantor, any Individual Owner or any Approved Mezzanine Borrower or if any proceeding for the dissolution or liquidation of Borrower, any SPC Party, any Guarantor, any Individual Owner or any Approved Mezzanine Borrower shall be instituted, or if Borrower or Owner or any Approved Mezzanine Borrower is substantively consolidated with any other Person; provided, however, if such appointment, adjudication, petition, proceeding or consolidation was involuntary and not consented to by Borrower, such SPC Party, any Guarantor, or such Individual Owner, upon the same not being discharged, stayed or dismissed within ninety (90) days following its filing;

(j)                         The fifth line of the first paragraph of Section 10.1 of the Loan Agreement is hereby amended to add “any SPC Party,” before the word “Owner”.

(k)                         The last paragraph of Section 10.1 the Loan Agreement is hereby deleted in its entirety and replaced with the following:

Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to Borrower (and guaranteed by any Guarantor pursuant to the Guaranty) in the event that any of the following occur (each, a "Springing Recourse Event"): (i) Borrower or Owner fails to obtain Lender's prior consent to any financing for borrowed money secured by the Collateral or any Individual Property, or any voluntary conveyance of a mortgage, deed of trust, security deed, security agreement or similar grant by Borrower or Owner of a voluntary Lien upon any Individual Property or the Collateral, or any voluntary granting of a security interest in, voluntary pledge of or other voluntary Lien upon any direct or indirect equity interest in any Individual Owner, and SPC Party, or any Mezzanine Borrower, in each case, as security for any obligations or liabilities that is not permitted under the Loan Documents (excluding, for the avoidance of doubt, the security interests, pledges or Liens granted under the Mortgage Loan Documents securing the Mortgage Loan, the Loan Documents securing the Loan or the Approved Mezzanine Loan Documents securing the Approved Mezzanine Loan); (ii) Borrower or Owner fails to obtain Lender's prior consent to (a) any voluntary transfer of any Individual Property or the Collateral that is not permitted under the Loan Documents or (b) any voluntary transfer of a direct or indirect interest in Borrower or Owner that results in a change of control of Borrower or Owner that is not permitted under the Loan Documents (specifically excluding from this clause (ii): (x) any transfer of the direct ownership interests in any Individual Owner, any SPC Party or any Mezzanine Borrower to any Mezzanine Lender or its designee as a result of any foreclosure upon such ownership interests (or transfer-in-lieu of foreclosure of the ownership interests that are the collateral for the applicable Mezzanine Loan), consummated in accordance with the applicable Mezzanine Loan Documents) and (y) any Qualified Preferred Equity

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

Vehicle Change of Control consummated in accordance with Section 7.2(k) hereof; (iii) Borrower, any SPC Party, any Individual Owner and/or Approved Mezzanine Borrower, files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, subject to a maximum aggregate liability equal to the BK Cap; (iv) the filing of an involuntary petition against Borrower, any SPC Party, any Individual Owner and/or Approved Mezzanine Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which Borrower, any SPC Party, any Individual Owner and/or Approved Mezzanine Borrower colludes with or otherwise assists such Person, and/or Borrower, any SPC Party, any Individual Owner and/or Approved Mezzanine Borrower solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower, any SPC Party, any Individual Owner and/or Approved Mezzanine Borrower by any Person, subject to a maximum aggregate liability equal to the BK Cap; (v) Borrower, any SPC Party, any Individual Owner and/or Approved Mezzanine Borrower files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, subject to a maximum aggregate liability equal to the BK Cap; (vi) Borrower, any Individual Owner or Approved Mezzanine Borrower or any Affiliate, officer, director or representative which controls Borrower, such Individual Owner or Approved Mezzanine Borrower, as the case may be, consents to, or joins in, an application for the appointment of a custodian, receiver, trustee or examiner for Borrower, such Individual Owner and/or any portion of any Individual Property, the Collateral or Approved Mezzanine Borrower, as the case may be, subject to a maximum aggregate liability equal to the BK Cap; (vii) Borrower, any SPC Party, any Individual Owner and/or Approved Mezzanine Borrower makes an assignment for the benefit of creditors or admits, in any legal proceeding, its insolvency or inability to pay its debts as they become due, subject to a maximum aggregate liability equal to the BK Cap; (viii) Borrower fails to comply with the provisions of Section 4.4 or Schedule V of this Agreement (other than those relating to solvency or adequacy of capital or adequacy of cash flow), and such failure results in an order of substantive consolidation of Borrower or one (1) or more of the Individual Owners with any other Person (other than another Individual Owner or the Liquor Subsidiary) in a bankruptcy or similar proceeding under the Bankruptcy Code or any other federal or state bankruptcy or insolvency law, subject to a maximum liability equal to the BK Cap; or (ix) such third party's claim of ownership of, or a Lien upon, the Pledged Securities is fully and finally disposed of in favor of such third party, whether such disposition shall occur prior to or after a foreclosure on the Collateral by Lender.

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

(l)                         Schedule V(o) of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

(o)       (1)         If Borrower is a limited partnership, Borrower's general partner ("SPC Party") has been and shall be a Delaware limited liability company or a corporation formed under the laws of any jurisdiction of the United States, and SPC Party (i) has caused and will cause Borrower to be a Special Purpose Bankruptcy Remote Entity; (ii) has complied and will at all times comply with each of the representations, warranties and covenants contained on this Schedule V (other than subsections (a), (b) and (d)) as if such representation, warranty or covenant was made directly by SPC Party; (iii) has not engaged and will not engage in any business or activity other than owning an interest in Borrower; (iv) has not acquired or owned and will not acquire or own any assets other than its partnership interest in Borrower; (v) has not incurred and will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation) other than unsecured trade payables incurred in the ordinary course of business related to the ownership of an interest in Borrower that (A) do not exceed at any one time $50,000.00, and (B) are paid within ninety (90) days after the date incurred; provided that it shall not be a breach of this subsection (o)(1) to the extent that Borrower has (or had) sufficient cash flow (without giving effect to any Trigger Period) to make distributions to SPC Party for the payment of unsecured trade payables but such cash flow is (or was) not made available to Borrower for distribution during a Trigger Period or during the continuance of an Event of Default (or during similar periods under the documentation for the Prior Loans); and (vi) has no contingent or actual obligations not related to the ownership of limited partnership interest in Borrower's. Upon the withdrawal or the disassociation of SPC Party from Borrower, Borrower shall immediately appoint a new SPC Party whose articles or certificate of formation or incorporation are substantially similar to those of SPC Party and deliver a new non-consolidation opinion to the Rating Agency or Rating Agencies, as applicable, with respect to the new SPC Party and its equity owners.

(2)         The organizational documents of SPC Party or, if Borrower is a limited liability company, Borrower shall provide that at all times there shall be (and Borrower shall at all times cause there to be) at least two (2) duly appointed Independent Directors or Independent Managers. In addition, the organizational documents of Borrower and SPC Party shall provide that no Independent Director or Independent Manager (as applicable) of Borrower or SPC Party may be removed or replaced without Cause and unless Borrower or SPC Party, as applicable, provides Lender with not less than three (3) Business Days' prior written notice of (a) any proposed removal of an Independent Director or Independent Manager (as applicable), together with a statement as to the reasons for such removal, and (b) the identity of the proposed replacement Independent Director or Independent Manager (as applicable), together with a certification that such replacement satisfies the requirements set forth in the organizational documents for an Independent Director or Independent Manager (as applicable).

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

(m)                          Schedule V(p) of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

(p)          The organizational documents of Borrower and SPC Party shall also provide an express acknowledgment that Lender is an intended third-party beneficiary of the "special purpose" provisions of such organizational documents.

(n)                         Schedule V(q) of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

(q)          The organizational documents of Borrower, if Borrower is a limited liability company, and SPC Party shall provide that such Person shall not take any action which, under the terms of any certificate of formation, limited liability company operating agreement or any voting trust agreement, requires a unanimous vote of (A) the sole member of Borrower or SPC Party, as applicable (each, a "Sole Member"), (B) the board of directors of Borrower or SPC Party, as applicable, or (C) the committee of managers of Borrower or SPC Party, as applicable, designated to manage the business affairs of Borrower or SPC Party, as applicable (each, a "Committee"), unless at the time of such action there shall be at least two (2) duly appointed Independent Directors or Independent Managers and all such Independent Directors or Independent Managers (as applicable) have participated in such vote. The organizational documents of Borrower, if Borrower is a limited liability company, and SPC Party shall provide that actions requiring such unanimous written consent, including the Independent Directors or Independent Managers (as applicable), shall include each of the following with respect to Borrower, if Borrower is a limited liability company, and SPC Party: (i) filing or consenting to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, (ii) seeking or consenting to the appointment of a receiver, liquidator or any similar official of Borrower or a substantial part of its business, (iii) making an assignment for the benefit of creditors, (iv) admitting in writing its inability to pay debts generally as they become due, or (v) taking any action in furtherance of the foregoing. In addition, the organizational documents of Borrower, if Borrower is a limited liability company, and SPC Party shall provide that, when voting with respect to any matters set forth in the immediately preceding sentence of this clause (q), the Independent Directors or Independent Managers (as applicable) shall consider only the interests of Borrower, including its creditors. Borrower and SPC Party shall not take any of the foregoing actions without the unanimous written consent of its board of directors, its member(s) or the Committee, as applicable, including (or together with) all Independent Directors or Independent Managers, as applicable. Without limiting the generality of the foregoing, such documents shall expressly provide that, to the greatest extent permitted by law, except for duties to Borrower (including duties to Borrower's equity holders solely to the extent of their respective economic interests in Borrower and to Borrower's creditors as set forth in the immediately preceding sentence), such Independent Directors or Independent Managers (as applicable) shall not owe any fiduciary duties to, and shall not consider, in acting

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

or otherwise voting on any matter for which their approval is required, the interests of (i) Borrower or SPC Party equity holders, (ii) other Affiliates of Borrower, or (iii) any group of Affiliates of which Borrower is a part); provided, however, the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing.

(n)                         Schedule V(r) of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

(r)          The organizational documents of Borrower and SPC Party, as applicable, shall provide that, as long as any portion of the Obligations remains outstanding, upon the occurrence of any event that causes Sole Member of Borrower or SPC Party, as applicable, to cease to be a member of Borrower or SPC Party, as applicable, (other than (i) upon an assignment by Sole Member of all of its limited liability company interest in Borrower or SPC Party, as applicable, and the admission of the transferee, if permitted pursuant to the organizational documents of Borrower or SPC Party, as applicable, and the Loan Documents, or (ii) the resignation of Sole Member and the admission of an additional member of Borrower or SPC Party, as applicable, if permitted pursuant to the organizational documents of Borrower or SPC Party, as applicable, and the Loan Documents), each of the persons acting as an Independent Director or Independent Manager (as applicable) of Borrower or SPC Party, as applicable, shall, without any action of any Person and simultaneously with Sole Member ceasing to be a member of Borrower or SPC Party, as applicable, automatically be admitted as members of Borrower (in each case, individually, a "Special Member" and collectively, the "Special Members") and shall preserve and continue the existence of Borrower or SPC Party, as applicable, without dissolution. The organizational documents of Borrower or SPC Party, as applicable, shall further provide that for so long as any portion of the Obligations is outstanding, no Special Member may resign or transfer its rights as Special Member unless (i) a successor Special Member has been admitted to Borrower or SPC Party, as applicable, as a Special Member, and (ii) such successor Special Member has also accepted its appointment as an Independent Director or Independent Manager (as applicable).

(o)                         Schedule V(s) of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

(s)          The organizational documents of Borrower or SPC Party, as applicable, shall provide that, as long as any portion of the Obligations remains outstanding, except as expressly permitted pursuant to the terms of this Agreement, (i) Sole Member may not resign, and (ii) no additional member shall be admitted to Borrower or SPC Party, as applicable.

(p)                         Schedule V(t) of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

The organizational documents of Borrower or SPC Party, as applicable, shall provide that, as long as any portion of the Obligations remains outstanding: (i) Borrower or SPC Party, as applicable, shall be dissolved, and its affairs shall be wound up, only upon the first to occur of the following: (A) the termination of the legal existence of the last remaining member of Borrower or SPC Party, as applicable, or the occurrence of any other event which terminates the continued membership of the last remaining member of Borrower or SPC Party, as applicable, in Borrower or SPC Party, as applicable, unless the business of Borrower or SPC Party, as applicable, is continued in a manner permitted by its operating agreement or the Delaware Limited Liability Company Act (the "Act"), or (B) the entry of a decree of judicial dissolution under Section 18-802 of the Act; (ii) upon the occurrence of any event that causes the last remaining member of Borrower or SPC Party, as applicable, to cease to be a member of Borrower or SPC Party, as applicable, or that causes Sole Member to cease to be a member of Borrower or SPC Party, as applicable (other than (A) upon an assignment by Sole Member of all of its limited liability company interest in Borrower or SPC Party, as applicable, and the admission of the transferee, if permitted pursuant to the organizational documents of Borrower or SPC Party, as applicable, and the Loan Documents, or (B) the resignation of Sole Member and the admission of an additional member of Borrower or SPC Party, as applicable, if permitted pursuant to the organizational documents of Borrower or SPC Party, as applicable, and the Loan Documents), to the fullest extent permitted by law, the personal representative of such last remaining member shall be authorized to, and shall, within ninety (90) days after the occurrence of the event that terminated the continued membership of such member in Borrower, agree in writing (I) to continue the existence of Borrower or SPC Party, as applicable, and (II) to the admission of the personal representative or its nominee or designee, as the case may be, as a substitute member of Borrower or SPC Party, as applicable, effective as of the occurrence of the event that terminated the continued membership of such member in Borrower or SPC Party, as applicable; (iii) the bankruptcy of Sole Member or a Special Member shall not cause such Sole Member or Special Member, respectively, to cease to be a member of Borrower or SPC Party, as applicable, and upon the occurrence of such an event, the business of Borrower or SPC Party, as applicable, shall continue without dissolution; (iv) in the event of the dissolution of Borrower or SPC Party, as applicable, Borrower or SPC Party, as applicable, shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of Borrower or SPC Party, as applicable, in an orderly manner), and the assets of Borrower or SPC Party, as applicable, shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act; and (v) to the fullest extent permitted by law, each of Sole Member and the Special Members shall irrevocably waive any right or power that they might have to cause Borrower or SPC Party, as applicable, or any of its assets to be partitioned, to cause the appointment of a receiver for all or any portion of the assets of Borrower or SPC Party, as applicable, to compel any sale of all or any portion of the assets of Borrower or SPC Party, as applicable, pursuant to any applicable law or to file a

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

complaint or to institute any proceeding at law or in equity to cause the dissolution, liquidation, winding up or termination of Borrower or SPC Party, as applicable.

(q)                         Schedule V(ee) of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

(ee) Borrower and the Independent Directors or Independent Manager (as applicable) will consider the interests of Borrower's creditors in connection with all limited liability company actions. Without limiting the generality of the foregoing to the greatest extent permitted by law, except for duties to Borrower (including duties to Borrower's equity holders solely to the extent of their respective economic interests in Borrower and to Borrower's creditors as set forth in the immediately preceding sentence), such Independent Directors shall not owe any fiduciary duties to, and shall not consider, in acting or otherwise voting on any matter for which their approval is required, the interests of (i) the members of Borrower or SPC Party, (ii) other Affiliates of Borrower, or (iii) any group of Affiliates of which Borrower is a part); provided, however, the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing.

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

EXHIBIT A

Individual Properties and Allocated Loan Amounts

Individual Property Name	Allocated Loan Amount
Hampton Inn Morgantown		1 ,160,037
Hampton Inn Beckley		1,419,747
Hyatt Place Richmond Innsbrook		683,903
Hampton Inn Norfolk-Naval Base		328,966
Fairfield Inn & Suites by Marriott Dallas Medical Market Center		827,382
Courtyard by Marriott Dallas Medical Market Center		1,601,544
SpringHill Suites by Marriott Austin Round Rock		744,502
Hilton Garden Inn Austin Round Rock		1,082,124
SpringHill Suites by Marriott San Antonio Medical Center Northwest		502,106
SpringHill Suites by Marriott Houston Hobby Airport		1,004,212
Hampton Inn Dallas-Addison		857,043
Homewood Suites by Hilton San Antonio-Northwest		1,255,264
Hampton Inn & Suites Nashville Franklin Cool Springs		1,791,998
Courtyard by Marriott Knoxville Cedar Bluff		969,584
Residence Inn by Marriott Chattanooga Downtown		952,270
Residence Inn by Marriott Knoxville Cedar Bluff		891,671
Hyatt Place Nashville Franklin Cool Springs		1,298,549
Hyatt Place Memphis Wolfchase Galleria		891,671
Homewood Suites by Hilton Memphis-Germantown		657,932
Hampton Inn Memphis-Poplar		1,108,095
Hampton Inn Pickwick Dam at Shiloh Falls		181,797
Hampton Inn Chattanooga Airport I-75		383,178
Hampton Inn Columbia I-26 Airport		467,478
Hampton Inn Charleston-Airport Coliseum		320,025
Holiday Inn Charleston Mount Pleasant		917,642
Hampton Inn Scranton at Montage Mountain		986,898
Hampton Inn State College		1,004,212
Residence Inn by Marriott Portland Downtown Lloyd Center		2,813,524
Hyatt Place Columbus Worthington		744,502
Hyatt Place Cincinnati Blue Ash		588,676
Hampton Inn Columbus Dublin		978,241
Hampton Inn Cleveland-Westlake		1,073,467

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

Hampton Inn Albany-Wolf Road (Airport)	1,437,061
Hyatt Place Las Vegas	1,584,230
Hyatt Place Albuquerque Uptown	1,298,549
Courtyard by Marriott Asheville	1,108,095
Hampton Inn Fayetteville I-95	452,718
Hampton Inn Charlotte-Gastonia	883,014
Hampton Inn St. Louis Westport	666,589
Hampton Inn Kansas City-Airport	813,758
Hyatt Place Minneapolis Airport-South	1,056,153
SpringHill Suites by Marriott Grand Rapids North	934,956
Hampton Inn Grand Rapids-North	1,038,839
Hampton Inn Detroit Madison Heights South Troy	1,056,153
Hampton Inn Detroit Northville	779,130
Hyatt Place Baltimore BWI Airport	865,700
Hampton Inn Baltimore Glen Burnie	233,739
Homewood Suites by Hilton Boston-Peabody	796,444
Hampton Inn Boston Peabody	1,168,694
Hyatt Place Baton Rouge I-10	986,898
Residence Inn by Marriott Lexington South Hamburg Place	1,056,153
SpringHill Suites by Marriott Lexington Near the University of Kentucky	1,237,950
Courtyard by Marriott Louisville Downtown	2,337,389
Courtyard by Marriott Lexington South Hamburg Place	1,211,979
Courtyard by Marriott Bowling Green Convention Center	995,555
Hyatt Place Kansas City Overland Park Metcalf	701,217
Hampton Inn Kansas City Overland Park	320,025
Hyatt Place Indianapolis Keystone	995,555
Courtyard by Marriott Chicago Elmhurst Oakbrook Area	934,956
Homewood Suites by Hilton Chicago Downtown	5,746,968
Hampton Inn Chicago Gurnee	995,555
Residence Inn by Marriott Boise Downtown	753,159
Fairfield Inn & Suites by Marriott Atlanta Vinings	796,444
Residence Inn by Marriott Macon	476,135
Residence Inn by Marriott Savannah Midtown	675,246
Courtyard by Marriott Athens Downtown	770,473
Hampton Inn Columbus-Airport	218,554

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

Embassy Suites by Hilton Orlando - International Drive Jamaican Court	1,800,655
Residence Inn by Marriott Tampa North I-75 Fletcher	822,415
Courtyard by Marriott Orlando Altamonte Springs Maitland	1,142,723
Courtyard by Marriott Sarasota Bradenton Airport	761,816
Residence Inn by Marriott Sarasota Bradenton	891,671
Courtyard by Marriott Jacksonville Airport Northeast	444,913
Hampton Inn Palm Beach Gardens	1,817,969
Hampton Inn Boca Raton-Deerfield Beach	1,168,694
Hampton Inn & Suites Boynton Beach	2,501,872
Hampton Inn Boca Raton	1,246,607
Courtyard by Marriott Gainesville	1,073,467
Residence Inn by Marriott Tampa Sabal Park Brandon	1,038,839
Holiday Inn Express & Suites Kendall East	848,386
Hyatt Place Tampa Airport Westshore	1,506,317
Hyatt Place Miami Airport-West Doral	1,627,515
Homewood Suites by Hilton Hartford Windsor Locks	995,555
Hampton Inn Colorado Springs Central Air Force Academy	265,387
Residence Inn by Marriott Los Angeles LAX El Segundo	3,173,286
SpringHill Suites by Marriott San Diego Rancho Bernardo Scripps Poway	1,817,969
Residence Inn by Marriott San Diego Rancho Bernardo Scripps Poway	2,158,572
Homewood Suites by Hilton Phoenix-Biltmore	1,489,003
Residence Inn by Marriott Mobile	578,316
Courtyard by Marriott Mobile	458,821
Hyatt Place Birmingham Hoover	839,729
Hampton Inn Birmingham Mountain Brook	753,159
Residence Inn by Marriott Tallahassee North I-10 Capital Circle	891,671
Courtyard by Marriott Tallahassee North I-10 Capital Circle	934,956
Residence Inn by Marriott Ft Myers	744,502
Hampton Inn West Palm Beach Florida Turnpike	1,523,621

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

EXHIBIT B

Mortgage Loan Allocated Loan Amounts

Individual Property Name	Allocated Loan Amount
Hampton Inn Morgantown		9,039,931
Hampton Inn Beckley		11,063,797
Hyatt Place Richmond Innsbrook		5,329,512
Hampton Inn Norfolk-Naval Base		2,563,563
Fairfield Inn & Suites by Marriott Dallas Medical Market Center		6,447,614
Courtyard by Marriott Dallas Medical Market Center		12,480,502
SpringHill Suites by Marriott Austin Round Rock		5,801,747
Hilton Garden Inn Austin Round Rock		8,432,772
SpringHill Suites by Marriott San Antonio Medical Center Northwest		3,912,806
SpringHill Suites by Marriott Houston Hobby Airport		7,825,612
Hampton Inn Dallas-Addison		6,678,755
Homewood Suites by Hilton San Antonio-Northwest		9,782,015
Hampton Inn & Suites Nashville Franklin Cool Springs		13,964,670
Courtyard by Marriott Knoxville Cedar Bluff		7,555,764
Residence Inn by Marriott Chattanooga Downtown		7,420,839
Residence Inn by Marriott Knoxville Cedar Bluff		6,948,604
Hyatt Place Nashville Franklin Cool Springs		10,119,326
Hyatt Place Memphis Wolfchase Galleria		6,948,604
Homewood Suites by Hilton Memphis-Germantown		5,127,125
Hampton Inn Memphis-Poplar		8,635,158
Hampton Inn Pickwick Dam at Shiloh Falls		1,416,706
Hampton Inn Chattanooga Airport I-75		2,986,031
Hampton Inn Columbia I-26 Airport		3,642,957
Hampton Inn Charleston-Airport Coliseum		2,493,889
Holiday Inn Charleston Mount Pleasant		7,150,990
Hampton Inn Scranton at Montage Mountain		7,690,688
Hampton Inn State College		7,825,612
Residence Inn by Marriott Portland Downtown Lloyd Center		21,925,207
Hyatt Place Columbus Worthington		5,801,747
Hyatt Place Cincinnati Blue Ash		4,587,428
Hampton Inn Columbus Dublin		7,623,226
Hampton Inn Cleveland-Westlake		8,365,310

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

Hampton Inn Albany-Wolf Road (Airport)	11,198,721
Hyatt Place Las Vegas	12,345,578
Hyatt Place Albuquerque Uptown	10,119,326
Courtyard by Marriott Asheville	8,635,158
Hampton Inn Fayetteville I-95	3,527,940
Hampton Inn Charlotte-Gastonia	6,881,142
Hampton Inn St. Louis Westport	5,194,587
Hampton Inn Kansas City-Airport	6,341,444
Hyatt Place Minneapolis Airport-South	8,230,385
SpringHill Suites by Marriott Grand Rapids North	7,285,915
Hampton Inn Grand Rapids-North	8,095,461
Hampton Inn Detroit Madison Heights South Troy	8,230,385
Hampton Inn Detroit Northville	6,071,596
Hyatt Place Baltimore BWI Airport	6,746,217
Hampton Inn Baltimore Glen Burnie	1,821,479
Homewood Suites by Hilton Boston-Peabody	6,206,520
Hampton Inn Boston Peabody	9,107,394
Hyatt Place Baton Rouge I-10	7,690,688
Residence Inn by Marriott Lexington South Hamburg Place	8,230,385
SpringHill Suites by Marriott Lexington Near the University of Kentucky	9,647,091
Courtyard by Marriott Louisville Downtown	18,214,787
Courtyard by Marriott Lexington South Hamburg Place	9,444,704
Courtyard by Marriott Bowling Green Convention Center	7,758,150
Hyatt Place Kansas City Overland Park Metcalf	5,464,436
Hampton Inn Kansas City Overland Park	2,493,889
Hyatt Place Indianapolis Keystone	7,758,150
Courtyard by Marriott Chicago Elmhurst Oakbrook Area	7,285,915
Homewood Suites by Hilton Chicago Downtown	44,784,930
Hampton Inn Chicago Gurnee	7,758,150
Residence Inn by Marriott Boise Downtown	5,869,209
Fairfield Inn & Suites by Marriott Atlanta Vinings	6,206,520
Residence Inn by Marriott Macon	3,710,420
Residence Inn by Marriott Savannah Midtown	5,262,050
Courtyard by Marriott Athens Downtown	6,004,134
Hampton Inn Columbus-Airport	1,703,143

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

Embassy Suites by Hilton Orlando - International Drive Jamaican Court	14,032,132
Residence Inn by Marriott Tampa North I-75 Fletcher	6,408,907
Courtyard by Marriott Orlando Altamonte Springs Maitland	8,905,007
Courtyard by Marriott Sarasota Bradenton Airport	5,936,671
Residence Inn by Marriott Sarasota Bradenton	6,948,604
Courtyard by Marriott Jacksonville Airport Northeast	3,467,113
Hampton Inn Palm Beach Gardens	14,167,057
Hampton Inn Boca Raton-Deerfield Beach	9,107,394
Hampton Inn & Suites Boynton Beach	19,496,568
Hampton Inn Boca Raton	9,714,553
Courtyard by Marriott Gainesville	8,365,310
Residence Inn by Marriott Tampa Sabal Park Brandon	8,095,461
Holiday Inn Express & Suites Kendall East	6,611,293
Hyatt Place Tampa Airport Westshore	11,738,418
Hyatt Place Miami Airport-West Doral	12,682,889
Homewood Suites by Hilton Hartford Windsor Locks	7,758,150
Hampton Inn Colorado Springs Central Air Force Academy	2,068,103
Residence Inn by Marriott Los Angeles LAX El Segundo	24,728,758
SpringHill Suites by Marriott San Diego Rancho Bernardo Scripps Poway	14,167,057
Residence Inn by Marriott San Diego Rancho Bernardo Scripps Poway	16,821,306
Homewood Suites by Hilton Phoenix-Biltmore	11,603,494
Residence Inn by Marriott Mobile	4,506,694
Courtyard by Marriott Mobile	3,575,495
Hyatt Place Birmingham Hoover	6,543,831
Hampton Inn Birmingham Mountain Brook	5,869,209
Residence Inn by Marriott Tallahassee North I-10 Capital Circle	6,948,604
Courtyard by Marriott Tallahassee North I-10 Capital Circle	7,285,915
Residence Inn by Marriott Ft Myers	5,801,747
Hampton Inn West Palm Beach Florida Turnpike	11,873,343

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

EXHIBIT C

Organizational Chart of New Borrower

(see attached)

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

EXHIBIT D

Intellectual Property/Websites

Borrower	Asset Name	Domain Name	Hosting Expiration Date	Domain Expiration Date	Account Holder
ARC Hospitality Portfolio I Owner, LLC	Homewood Suites Chicago	www.homewoodsuiteschicago.com	4/10/2016	4/10/2016	First Hospitality
ARC Hospitality Portfolio I Owner, LLC	Embassy Suites Orlando	www.orlandoembassysuites.com		9/30/2016	Hilton
ARC Hospitality Portfolio I Owner, LLC	Hampton Inn Charleston	www.hamptoninncharlestonairport.com		4/19/2015	Hilton
ARC Hospitality Portfolio I NTC Owner, LP	Residence Inn San Diego	www.residenceinnhotelsandiego.com	Month-to-Month	2/10/2015	Huntington
ARC Hospitality Portfolio I NTC Owner, LP	SpringHill Suites San Diego	www.springhillsandiegohotel.com	Month-to-Month	2/10/2015	Huntington
ARC Hospitality Portfolio I NTC Owner, LP	Fairfield Inn & Suites Dallas	www.fairfieldinndallashotel.com	Month-to-Month	1/4/2015	Huntington
ARC Hospitality Portfolio I DLGL Owner, LP	Courtyard Dallas	www.courtyarddallashotel.com	Month-to-Month	1/4/2015	Huntington
ARC Hospitality Portfolio I Owner, LLC	Holiday Inn Charleston Mt. Pleasant	www.himtpleasant.com	12/31/2015	4/30/2017	Pillar

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

EXHIBIT E

Ground Leases

Property		Additional Ground Lease Documents
Hampton Inn	·	Consent of Landlord by S&S Associates LLC and New Owners, Vestavia LLC as Tenants in Common
Birmingham (Mountain
Brook), AL	·	Assignment and Assumption of Ground Lease, dated February 27, 2015, by W2007 Equity Inns Realty, LLC in favor of ARC Hospitality Portfolio I BHGL Owner, LLC
	·	Unconditional & Irrevocable Guaranty, by American Realty Capital Hospitality Trust, Inc. in favor of S&S Associates LLC and New Owners, Vestavia LLC as Tenants in Common
Homewood Suites, Phoenix, AZ	·	Assignment and Assumption of Ground Lease, dated February 27, 2015, by W2007 Equity Inns Realty, LLC in favor of ARC Hospitality Portfolio I PXGL Owner, LLC
Hampton Inn, Norfolk, VA	·	Ground Lease Consent to Assignment and Sublease and Estoppel, dated as of January 21, 2015, between Glenwood Square Shopping Center Associates, L.L.C. and ARC Hospitality Portfolio I NFGL Owner, LLC
	·	Assignment and Assumption of Ground Lease, dated February 27, 2015, by W2007 Equity Inns Realty, LLC in favor of ARC Hospitality Portfolio I NFGL Owner, LLC
	·	Guaranty of Lease, made as of the [27th day of February 2015], by American Realty Capital Hospitality Operating Partnership, L.P., in favor of Glenwood Square Shopping Center Associates, L.L.C.
Courtyard, Dallas, TX	·	Consent to Assignment, Sublease, Management Agreement, Sub-Management Agreement, Concession Agreement and Alcohol Services Agreement and

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

		Amendment to Ground Lease, dated as of [February 27, 2015] by Istar Dallas GL LLP, W2007 Equity Inns Realty, LP, ARC Hospitality Portfolio I DLGL Owner, LP, American Realty Capital Hospitality Grace Portfolio, LLC, Crestline Hotels & Resorts, LLC and ARC Hospitality Portfolio I TX Beverage Company, LLC
	·	Guaranty of Lease dated February 27, 2015 by American Realty Capital Hospitality Trust, Inc. to Istar Dallas GL LLP
	·	Assignment and Assumption of Ground Lease, dated February 27, 2015, by W2007 Equity Inns Realty, LP in favor of ARC Hospitality Portfolio I DLGL Owner, LP
Residence Inn, Mobile, AL	·	Assignment and Assumption of Ground Lease, dated February 27, 2015, by W2007 Equity Inns Realty, LLC in favor of ARC Hospitality Portfolio I MGBL 950 Owner, LLC
Courtyard, Mobile, AL	·	Assignment and Assumption of Ground Lease, dated February 27, 2015, by W2007 Equity Inns Realty, LLC in favor of ARC Hospitality Portfolio I MGBL 1000 Owner, LLC
Springhill Suites, San Antonio, TX	·	Consent to Assignment and Assumption of Lease, made and entered into as of the 31st day of December, 2014, by and between Crossroads Mall Partners, Ltd, W2007 Equity Inns Realty, L.P. and ARC Hospitality Portfolio I SAGL Owner, LP
	·	Assignment and Assumption of Ground Lease, dated February 27, 2015, by W2007 Equity Inns Realty, LP in favor of ARC Hospitality Portfolio I SAGL Owner, LP
	·	Guaranty, dated as of [February 27, 2015], by American Realty Capital Hospitality Trust, Inc. in favor of Crossroads Mall Partners, Ltd.
	·	Consent to Sublease dated as of January 27, 2015 by and between Crossroads Mall Partners, Ltd, ARC Hospitality Portfolio I SAGL Owner, LP, and ARC Hospitality Portfolio I NTC TRS, LP

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

Hampton Inn, Baltimore (Glen Burnie), MD	·	Lease Assignment and Assumption Agreement, dated [February 27, 2015], by Governor Plaza Associates, Federal Realty Investment Trust, W2007 Equity Inns Realty, LLC, ARC Hospitality Portfolio I GBGL Owner, LLC, ARC Hospitality Portfolio I HIL TRS, LLC, and American Realty Capital Hospitality Trust, Inc.
	·	Assignment and Assumption of Ground Lease, dated [February 27, 2015], by W2007 Equity Inns Realty, LLC in favor of ARC Hospitality Portfolio I GBGL Owner, LLC
	·	Guaranty, dated as of [February 27, 2015], by American Realty Capital Hospitality Trust, Inc. in favor of Governor Plaza Associates and Federal Realty Investment Trust

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

EXHIBIT F

Rent Roll

(see attached)

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

EXHIBIT G

Franchise Agreements

(see attached)

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

EXHIBIT H

Expiring Franchise Properties

(see attached)

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

EXHIBIT I

Scheduled PIP

NONE.

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

EXHIBIT J

PIP Work Other Than Scheduled PIP

(see attached)

Assumption Agreement (Mezzanine)
Berkadia Loan No. 01-0085684 & 01-0086644

EX-10.24

Exhibit 10.24

Berkadia Loan No. 01-0085683 & 01-0086643

ASSUMPTION AND RELEASE AGREEMENT

THIS ASSUMPTION AND RELEASE AGREEMENT (this “Agreement”) is entered into and made effective as of the 27th day of February, 2015 (the “Effective Date”), by and among W2007 Equity Inns Realty, LLC, a Delaware limited liability company (“LLC Original Borrower”), and W2007 Equity Inns Realty, L.P., a Delaware limited partnership (“LP Original Borrower”; LLC Original Borrower and LP Original Borrower are individually and collectively, as the context may require, referred to as “Original Borrower”), each with a mailing address at c/o Goldman Sachs & Co., 200 West Street, New York, New York 10282, ARC Hospitality Portfolio I Owner, LLC, a Delaware limited liability company (“LLC New Borrower”), ARC Hospitality Portfolio I BHGL Owner, LLC, a Delaware limited liability company (“BHGL New Borrower”), ARC Hospitality Portfolio I PXGL Owner, LLC, a Delaware limited liability company (“PXGL New Borrower”), ARC Hospitality Portfolio I GBGL Owner, LLC, a Delaware limited liability company (“GBGL New Borrower”), ARC Hospitality Portfolio I NFGL Owner, LLC, a Delaware limited liability company (“NFGL New Borrower”), ARC Hospitality Portfolio I MBGL 1000 Owner, LLC, a Delaware limited liability company (“MBGL 1000 New Borrower”), ARC Hospitality Portfolio I MBGL 950 Owner, LLC, a Delaware limited liability company (“MBGL 950 New Borrower”), ARC Hospitality Portfolio I NTC Owner, LP, a Delaware limited partnership (“LP New Borrower”), ARC Hospitality Portfolio I DLGL Owner, LP, a Delaware limited partnership (“DLGL New Borrower”), and ARC Hospitality Portfolio I SAGL Owner, LP, a Delaware limited partnership (“SAGL New Borrower”; LLC New Borrower, BHGL New Borrower, PXGL New Borrower, GBGL New Borrower, NFGL New Borrower, MBGL 1000 New Borrower, MBGL 950 New Borrower, LP New Borrower, DLGL New Borrower and SAGL New Borrower are individually and collectively, as the context may require, referred to as “New Borrower”), each with a mailing address at c/o American Realty Capital, 405 Park Avenue, New York, New York 10022, U.S. Bank National Association, as Trustee for the Registered Holders of EQTY 2014-INNS Mortgage Trust, Commercial Mortgage Pass-Through Certificates (“Lender”), with a mailing address at c/o Berkadia Commercial Mortgage LLC, 323 Norristown Road, Suite 300, Ambler, Pennsylvania 19002 (“Berkadia”), Whitehall Street Global Real Estate Limited Partnership 2007, a Delaware limited partnership (“Whitehall Street Global”), and Whitehall Parallel Global Real Estate Limited Partnership 2007, a Delaware limited partnership (“Whitehall Parallel Global”; Whitehall Street Global and Whitehall Parallel Global are individually and collectively, as the context may require, referred to as “Original Guarantor” and together with the Original Borrower, the “Original Indemnitors”), each with a mailing address at c/o Goldman Sachs & Co., 200 West Street, New York, New York 10282, and American

Realty Capital Hospitality Operating Partnership, L.P., a Delaware limited partnership (“ARC OP”) and American Realty Capital Hospitality Trust, Inc., a Maryland corporation (“ARC REIT”; together with Whitehall Street Global and Whitehall Parallel Global, ARC OP and ARC REIT are individually and collectively, as the context may require, referred to as “New Guarantor” and together with the New Borrower, the “New Indemnitors”), each with a mailing address at c/o American Realty Capital, 405 Park Avenue, New York, New York 10022.

RECITALS:

The following recitals are a material part of this Agreement:

A.           German American Capital Corporation, a Maryland corporation (“Original Lender”), made a real estate mortgage loan in the aggregate original principal amount of $865,000,000.00 to Original Borrower, which Loan is evidenced by that certain (i) Promissory Note A-1, dated April 11, 2014 (together with all addenda, modifications, amendments, riders, exhibits and supplements thereto, the “A-1 Note”), from Original Borrower in the original principal amount of $519,000,000.00 (the “A-1 Loan”), and (ii) Promissory Note A-2, dated April 11, 2014 (together with all addenda, modifications, amendments, riders, exhibits and supplements thereto, the “A-2 Note” and together with the A-1 Note, the “Note”), from Original Borrower in the original principal amount of $346,000,000.00 (the “A-2 Loan” and together with the A-1 Loan, the “Loan”). The Loan is further evidenced, governed and/or secured by the following agreements and documents, all executed and delivered, or caused to be executed and delivered, by Original Borrower for the benefit of Original Lender:

1.          that certain Loan Agreement, dated as of April 11, 2014, as amended by that certain First Amendment to Loan Agreement, dated as of June 18, 2014 (collectively, and together with all addenda, modifications, amendments, riders, exhibits and supplements thereto, the “Loan Agreement”);

2.          those certain mortgages, deeds of trust, or deeds to secure debt identified on Schedule II attached hereto and by this reference incorporated herein (collectively, together with all addenda, modifications, amendments, riders, exhibits and supplements thereto, the “Mortgage”), encumbering the real properties described on Exhibit A-1 attached hereto and by this reference incorporated herein or the Ground Leases described in Exhibit A-2 attached hereto and by this reference incorporated herein, each as more particularly described in the Mortgage;

3.          those certain assignments of leases and rents identified on Schedule II attached hereto (collectively, together with all addenda, modifications, amendments, riders, exhibits and supplements thereto, the “Assignment of Leases”);

4.          that certain Assignment of Agreements (as defined in the Loan Agreement);

5.          that certain Collateral Assignment of Interest Rate Protection Agreement, dated as of April 11, 2014 (together with all addenda, modifications, amendments, riders, exhibits and supplements thereto, the “Assignment of Rate Cap Agreement”); and

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6.          that certain Indemnification Agreement, dated as of April 11, 2014 (together with all addenda, modifications, amendments, riders, exhibits and supplements thereto, the “Indemnification Agreement”).

B.           In connection with the Loan, Original Borrower and/or Original Guarantor also executed and/or delivered, or caused to be executed and/or delivered, the following agreements and documents for the benefit of Original Lender:

1.          those certain UCC Financing Statements naming Original Borrower as debtor therein, and Original Lender as secured party therein, and filed with the appropriate recorder or clerk in which the Properties (as defined in the Loan Agreement) are located and in the records of the Secretary of State of Delaware; and

2.          that certain Environmental Indemnity Agreement, dated as of April 11, 2014 (the “Original Environmental Indemnity”), executed by the Original Indemnitors;

3.          that certain Guaranty of Recourse Obligations, dated as of April 11, 2014 (the “Original Guaranty”), executed by Original Guarantor;

4.          that certain Cash Management Agreement, dated as of April 11, 2014, and that certain Addendum to Cash Management Agreement, dated as of April 11, 2014 (collectively and together with all further addenda, modifications, amendments, riders, exhibits and supplements thereto, the “Original Cash Management Agreement”);

5.          that certain Pledge and Security Agreement, dated as of April 11, 2014 (the “Original Liquor Subsidiary Pledge”), executed by LLC Original Borrower and Lender;

6.          that certain Liquor License Agreement, dated as of April 11, 2014 (the “Original Liquor License Agreement”), executed by W2007 EQN Kansas SPE, LLC, a Kansas limited liability company, and LLC Original Borrower for the benefit of Original Lender;

7.          those certain Assignments of Management Agreements (as defined in the Loan Agreement), each dated as of dated as of April 11, 2014 (the “Original Assignment of Management Agreements”); and

8.          that certain Contribution Agreement, dated as of April 11, 2014 (the “Original Contribution Agreement”), executed by Original Borrower and Original Lender; and

9.          those certain Clearing Account Agreements (as defined in the Loan Agreement), each dated as of dated as of April 11, 2014 (the “Original Clearing Agreements”).

The agreements and documents set forth in Recital A and Recital B above are hereinafter referred to collectively as the “Original Borrower’s Loan Documents.”

C.           Upon the Effective Date, New Borrower and/or New Guarantor are executing and delivering, or are causing to be delivered, to Lender the following documents, each dated as of the Effective Date:

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1.          those certain UCC Financing Statements naming New Borrower as debtor therein, and naming Lender, as secured party therein, to be filed in the Recorder’s Office and the records of the Secretary of State of Delaware;

2.          those certain Assignment and Assumption of Mortgage/Deed of Trust and Assignment and Assumption of Leases, Rents and Hotel Revenues executed by Original Borrower (as applicable), New Borrower (as applicable) and Lender as identified on Schedule II attached hereto (collectively, the “Mortgage Assumptions”);

3.          that certain Environmental Indemnity Agreement from New Indemnitors in favor of Lender (the “New Environmental Indemnity”);

4.          that certain Guaranty of Recourse Obligations (the “New Guaranty”), executed and delivered by each New Guarantor in favor of Lender;

5.          that certain Payment Guaranty (the “Payment Guaranty”), executed and delivered by ARC REIT in favor of Lender;

6.          that certain Cash Management Agreement (the “CMA Agreement”), executed and delivered by ARC Hospitality Portfolio I TRS Holdco, LLC, a Delaware limited liability company (“TRS Holdco”), as account representative, New Borrower, each New Operating Lessee (as defined below), Property Managing Entities (as defined below), and Lender, together with that certain Addendum A to Cash Management Agreement (the “CMA Addendum” and together with the CMA Agreement, the “Cash Management Agreement”), executed and delivered by TRS Holdco, New Borrower, each New Operating Lessee, Property Managing Entities, Wells Fargo Bank, National Association (“Wells Fargo”), and Lender;

7.          that certain Contribution Agreement (the “New Contribution Agreement”), executed and delivered by New Borrower and Lender;

8.          that certain Pledge and Security Agreement (the “New KS Liquor Subsidiary Pledge”), executed and delivered by ARC Hospitality Portfolio I DEKS TRS, LLC, a Delaware limited liability company (“DEKS TRS”), for the benefit of Lender;

9.          that certain Liquor License Agreement (the “New KS Liquor License Agreement”), executed by ARC Hospitality Portfolio I KS TRS, LLC, a Kansas limited liability company (“KS Liquor Subsidiary”), DEKS TRS and LLC New Borrower for the benefit of Lender;

10.         that certain Pledge and Security Agreement (the “New TX Liquor Subsidiary Pledge” and together the New KS Liquor Subsidiary Pledge, the “New Liquor Subsidiary Pledge”), executed and delivered by ARC Hospitality Portfolio I TX Holdings, LLC, a Delaware limited liability company (“TX Liquor Holdco”), for the benefit of Lender;

11.         that certain Liquor License Agreement (the “New TX Liquor License Agreement” and together with the New KS Liquor License Agreement, the “New Liquor License Agreement”), executed by ARC Hospitality Portfolio I TX Beverage Company, LLC, a Delaware limited liability company (“TX Liquor Subsidiary”), ARC Hospitality Portfolio I

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NTC TRS, LP, a Delaware limited partnership (“NTC TRS”), and LP New Borrower for the benefit of Lender;

12.         that certain Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) executed by LLC New Borrower, LP New Borrower, DLGL New Borrower, SAGL New Borrower, ARC Hospitality Portfolio I TRS, LLC, a Delaware limited liability company (“TRS LLC”), DEKS TRS, NTC TRS, Lender, and American Realty Capital Hospitality Grace Portfolio, LLC, a Delaware limited liability company (“ARC Manager”), as operator, for the benefit of Lender (the “Crestline Operating Agreement Subordination”);

13.         that certain Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) executed by LLC New Borrower, LP New Borrower, DLGL New Borrower, SAGL New Borrower, TRS LLC, DEKS TRS, NTC TRS, Lender, ARC Manager, as operator, and Crestline Hotels & Resorts, LLC, a Delaware limited liability company (“Crestline”), as manager, for the benefit of Lender (the “Crestline Management Agreement Subordination”);

14.         that certain Subordination of Management Agreement (TX – Alcohol Management and Services Agreement) executed by Crestline, as manager, for the benefit of Lender, and acknowledged by TX Liquor Subsidiary (the “Crestline TX Alcohol Management Agreement Subordination” and together with the Crestline Operating Agreement Subordination and the Crestline Management Agreement Subordination, the “Crestline Subordination”);

15.         that certain Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) executed by LLC New Borrower, ARC Hospitality Portfolio I MISC TRS, LLC, a Delaware limited liability company (“MISC TRS”), Lender, and ARC Manager, as operator, for the benefit of Lender (the “Pillar Operating Agreement Subordination”);

16.         that certain Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) executed by LLC New Borrower, MISC TRS, Lender, ARC Manager, as operator, and Pillar Hotels & Resorts, L.P. (“Pillar”), as manager, for the benefit of Lender (the “Pillar Management Agreement Subordination” and together with the Pillar Operating Agreement Subordination, the “Pillar Subordination”)

17.         that certain Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) executed by LLC New Borrower, MISC TRS, Lender, and ARC Manager, as operator, for the benefit of Lender (the “Musselman Operating Agreement Subordination”);

18.         that certain Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) executed by LLC New Borrower, MISC TRS, Lender, ARC Manager, as operator, and Musselman Hotels Management, L.L.C. (“Musselman”), as manager, for the benefit of Lender (the “Musselman Management

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Agreement Subordination” and together with the Musselman Operating Agreement Subordination, the “Musselman Subordination”);

19.         that certain Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) executed by LLC New Borrower, GBGL New Borrower, BHGL New Borrower, LP New Borrower, NFGL New Borrower, ARC Hospitality Portfolio I HIL TRS, LLC, a Delaware limited liability company (“HIL TRS”), ARC Hospitality Portfolio I NTC HIL TRS, LP, a Delaware limited partnership (“NTC HIL TRS”), Lender, and ARC Manager, as operator, for the benefit of Lender (the “Hilton-Hampton Operating Agreement Subordination”);

20.         that certain Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) executed by LLC New Borrower, GBGL New Borrower, BHGL New Borrower, LP New Borrower, NFGL New Borrower, HIL TRS, NTC HIL TRS, Lender, ARC Manager, as operator, and Hampton Inns Management LLC, a Delaware limited liability company (“Hilton-Hampton”), as manager, for the benefit of Lender (the “Hilton-Hampton Management Agreement Subordination” and together with the Hilton-Hampton Operating Agreement Subordination, the “Hilton-Hampton Subordination”);

21.         that certain Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) executed by LLC New Borrower, PXGL New Borrower, LP New Borrower, HIL TRS, LLC, NTC HIL TRS, Lender, and ARC Manager, as operator, for the benefit of Lender (the “Hilton-Homewood Operating Agreement Subordination”);

22.         that certain Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) executed by LLC New Borrower, PXGL New Borrower, LP New Borrower, HIL TRS, NTC HIL TRS, Lender, ARC Manager, as operator, and Homewood Suites Management LLC, a Delaware limited liability company (“Hilton-Homewoood”), as manager, for the benefit of Lender (the “Hilton-Homewood Management Agreement Subordination” and together with the Hilton-Homewood Operating Agreement Subordination, the “Hilton-Homewood Subordination”);

23.         that certain Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) executed by MBGL 1000 New Borrower, MBGL 950 New Borrower, LLC New Borrower, LP New Borrower, ARC Hospitality Portfolio I MCK TRS, LLC, a Delaware limited liability company (“MCK TRS”), NTC TRS, Lender, and ARC Manager, as operator, for the benefit of Lender (the “McKibbon Operating Agreement Subordination”);

24.         that certain Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) executed by MBGL 1000 New Borrower, MBGL 950 New Borrower, LLC New Borrower, LP New Borrower, MCK TRS, NTC TRS, Lender, ARC Manager, as operator, and McKibbon Hotel Management, Inc. (“McKibbon”), as manager, for the benefit of Lender (the “McKibbon Management Agreement Subordination”) and together with the McKibbon Operating Agreement Subordination, the “McKibbon Subordination”;

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25.         that certain Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) executed by LLC New Borrower, MISC TRS, Lender, and ARC Manager, as operator, for the benefit of Lender (the “Innventures Operating Agreement Subordination”);

26.         that certain Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) executed by LLC New Borrower, MISC TRS, Lender, ARC Manager, as operator, and InnVentures IVI, LP (“Innventures”), as manager, for the benefit of Lender (the “Innventures Management Agreement Subordination” and together with the Innventures Operating Agreement Subordination, the “Innventures Subordination”);

27.         that certain Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) executed by LLC New Borrower, MISC TRS, Lender, and ARC Manager, as operator, for the benefit of Lender (the “First Hospitality Operating Agreement Subordination”);

28.         that certain Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) executed by LLC New Borrower, MISC TRS, Lender, ARC Manager, as operator, and First Hospitality Group, Inc. (“First Hospitality” and together with ARC Manager, Crestline, Pillar, Musselman, Hilton-Hampton, Hilton-Homewood, McKibbon, and Innventures, the “Property Managing Entities”), as manager, for the benefit of Lender (the “First Hospitality Management Agreement Subordination” and together with the First Hospitality Operating Agreement Subordination, the “First Hospitality Subordination”; the First Hospitality Subordination together with the Crestline Subordination, the Pillar Subordination, the Musselman Subordination, the Hilton-Hampton Subordination, the Hilton-Homewood Subordination, the McKibbon Subordination, and the Innventures Subordination, is referred to as the “Management Subordination”);

29.         that certain Clearing Account Agreement executed by TRS Holdco, TRS LLC, DEKS TRS, NTC TRS, ARC Manager, Crestline, Lender and Wells Fargo together with that certain Addendum A to Clearing Account Agreement executed by TRS Holdco, TRS LLC, DEKS TRS, NTC TRS, LLC New Borrower, LP New Borrower, DLGL New Borrower, SAGL New Borrower, Lender and Wells Fargo (collectively, the “Crestline Clearing Account Agreement”);

30.         that certain Clearing Account Agreement executed by TRS Holdco, MISC TRS, ARC Manager, Pillar, Lender and Wells Fargo together with that certain Addendum A to Clearing Account Agreement executed by TRS Holdco, MISC TRS, LLC New Borrower, Lender and Wells Fargo (collectively, the “Pillar Clearing Account Agreement”);

31.         that certain Clearing Account Agreement executed by TRS Holdco, MISC TRS, ARC Manager, Musselman, Lender and Wells Fargo together with that certain Addendum A to Clearing Account Agreement executed by TRS Holdco, MISC TRS, LLC New Borrower, Lender and Wells Fargo (collectively, the “Musselman Clearing Account Agreement”);

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32.         that certain Clearing Account Agreement executed by TRS Holdco, HIL TRS, NTC HIL TRS, ARC Manager, Hilton-Hampton, Hilton-Homewood, Lender and Wells Fargo together with that certain Addendum A to Clearing Account Agreement executed by TRS Holdco, HIL TRS, NTC HIL TRS, LLC New Borrower, BHGL New Borrower, PXGL New Borrower, GBGL New Borrower, NFGL New Borrower, LP New Borrower, Lender and Wells Fargo (collectively, the “Hilton Clearing Account Agreement”);

33.         that certain Clearing Account Agreement executed by TRS Holdco, MCK TRS, NTC TRS, ARC Manager, McKibbon, Lender and Wells Fargo together with that certain Addendum A to Clearing Account Agreement executed by TRS Holdco, MCK TRS, NTC TRS, LLC New Borrower, MBGL 1000 New Borrower, MBGL 950 New Borrower, LP New Borrower, Lender and Wells Fargo (collectively, the “MkKibbon Clearing Account Agreement”);

34.         that certain Clearing Account Agreement executed by TRS Holdco, MISC TRS, ARC Manager, Innventures, Lender and Wells Fargo together with that certain Addendum A to Clearing Account Agreement executed by TRS Holdco, MISC TRS, LLC New Borrower, Lender and Wells Fargo (collectively, the “Innventures Clearing Account Agreement”);

35.         that certain Clearing Account Agreement executed by TRS Holdco, MISC TRS, ARC Manager, First Hospitality, Lender and Wells Fargo together with that certain Addendum A to Clearing Account Agreement executed by TRS Holdco, MISC TRS, LLC New Borrower, Lender and Wells Fargo (collectively, the “First Hospitality Clearing Account Agreement”; the First Hospitality Clearing Account Agreement together with the Crestline Clearing Account Agreement, the Pillar Clearing Account Agreement, the Musselman Clearing Account Agreement, the Hilton Clearing Account Agreement, the McKibbon Clearing Account Agreement, and the Innventures Clearing Account Agreement, is referred to as the “New Clearing Account Agreements”);

36.         that certain Recognition Agreement (the “New Recognition Agreement”), executed by and between W2007 Equity Inns Senior Mezz, LLC, a Delaware limited liability company (“Qualified Preferred Equity Investor”), and Lender;

37.         that certain Subordination Agreement executed by and among TRS LLC, HIL TRS, MCK TRS, MISC TRS, DEKS TRS, NTC TRS, NTC HIL TRS (such entities referred to herein, individually and collectively, as “New Operating Lessee”), New Borrower and Lender (the “Operating Lease Subordination”);

38.         that certain incumbency certificate of ARC REIT, ARC OP, each New Borrower and each New Operating Lessee certifying as to the incumbency of each of ARC REIT, ARC OP, each New Borrower and each New Operating Lessee, executed by an authorized officer of ARC REIT, for the benefit of Lender;

39.         those certain incumbency certificates of Whitehall Street Global, Whitehall Parallel Global and Qualified Preferred Equity Investor executed by an authorized officer of WH Advisors, L.L.C. 2007, a Delaware limited liability company, as applicable, for the benefit of Lender;

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40.         this Agreement.

The agreements and documents set forth in Recital A and Recital C above (except for the incumbency certificates referred to as numbers 38-39), together with all other documents evidencing, securing or otherwise pertaining to the Loan (other than the documents and agreements set forth in Recital B), and such other agreements and documents as Lender may reasonably require, are hereinafter referred to collectively as the “Loan Documents”, and individually as a “Loan Document”.

D.           Original Lender assigned, sold and transferred its interest in the Loan and the Original Borrower’s Loan Documents to Lender pursuant to certain assignment documents including, without limitation, those certain assignments referenced in the Mortgage Assumptions, and Lender is the current holder of all of Original Lender’s interest in the Loan and Original Borrower’s Loan Documents.

E.           Lender, as the holder of the Note and beneficiary under the Mortgage, has been asked to consent to the transfer of the Properties to New Borrower (the “Transfer”) and the assumption by New Borrower and New Guarantor of the obligations of the Original Borrower and Original Guarantor, respectively, under the Loan Documents (the “Assumption”).

F.           Lender, acting by and through its servicer Berkadia, has agreed to consent to the Transfer and Assumption subject to the terms and conditions stated below, including, without limitation, the execution and delivery of the agreements and documents set forth in Recital C above and such other documents and instruments as may be reasonably required by Lender.

G.           Unless the context requires otherwise, references in this Agreement to Original Borrower’s Loan Documents shall be deemed to refer to such documents as amended by this Agreement, and as such documents may be further amended, modified, extended or replaced from time to time.

CONTRACTUAL PROVISIONS:

NOW, THEREFORE, in consideration of the Recitals, which are incorporated herein as if set forth below in full as a substantive, contractual part of this Agreement, and the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.          Acknowledgement of Debt.

(a)          Lender, Original Borrower and New Borrower confirm and acknowledge that the aggregate outstanding principal balance under the Note immediately prior to the Effective Date is $801,100,768.45 and the balances of all reserve and escrow accounts required under the Loan Documents are set forth on Schedule I, attached hereto and by this reference incorporated herein. New Borrower declares and acknowledges, for the specific reliance and benefit of Lender, that (i) New Borrower has no claim, or to New Borrower’s knowledge, defense, or right of offset of any kind or in any amount with respect to the Note, the Mortgage or any of the other Loan Documents, and (ii) no amounts paid by New Borrower or

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Original Borrower to Lender pursuant to or in connection with the execution and delivery of this Agreement shall be applied to or set off against the principal balance of the Note.

(b)          The parties acknowledge and agree that Lender shall continue to hold the balances in escrow and reserve accounts, if any, in accordance with the terms of the Loan Documents. Original Borrower and Original Guarantor covenant and agree that the Lender has no further duty or obligation of any nature to Original Borrower or Original Guarantor relating to such escrow and/or reserve balances, all of which Original Borrower does hereby assign, transfer and convey to New Borrower, and New Borrower hereby unconditionally accepts and assumes the same. All escrow and reserve balances held by Lender in connection with the Loan Documents shall, from and after the Effective Date, be solely for the account of New Borrower.

(c)          Berkadia, as the servicing agent on behalf of Lender, hereby confirms, as of the Effective Date, that it has not issued to Original Borrower or Original Guarantor any written notice of, and has no actual knowledge of, a default or an Event of Default under the Original Borrower’s Loan Documents that has not been cured and is continuing. For the purposes of this Section 1(c), the term “actual knowledge” shall be limited to the actual knowledge of the undersigned, Gary A. Routzahn.

2.           Conditions Precedent; Consent to Transfer and Assumption; Consent to Qualified Preferred Equity Investment; Consent to Operating Lease Agreements; Consent to Management Agreement.

(a)          Original Borrower and New Borrower, each individually, represents and warrants to Lender as of the Effective Date that it has satisfied its respective requirements in connection with the Assumption of the Loan, the Qualified Preferred Equity Investment (as defined below), the execution of the Operating Lease Agreements (as defined below), and the execution of the Management Agreements (as defined below), as such requirements are set forth in the Original Borrower’s Loan Documents and that certain conditional consent letter issued by Berkadia on August 27, 2014 and executed by Original Borrower, LLC New Borrower and LP New Borrower (the “Original Conditional Approval Letter”), as affected by that certain conditional approval extension letter issued by Berkadia on November 20, 2014 and executed by Original Borrower and New Borrower (the “Conditional Approval Extension Letter”), as further affected by that certain conditional approval letter issued by Berkadia on February 26, 2015 and executed by Original Borrower and New Borrower (the “Modifications Conditional Approval Letter” and together with the Original Conditional Approval Letter and the Conditional Approval Extension Letter, the “Conditional Approval Letter”). Lender hereby confirms receipt of the deliverables required in connection with the Assumption of the Loan, the Qualified Preferred Equity Investment, the execution of the Operating Lease Agreements, and the execution of the Management Agreements, as such requirements are set forth in the Original Borrower’s Loan Documents and the Conditional Approval Letter.

(b)          In reliance upon the representations, warranties and covenants set forth herein by Original Borrower, Original Guarantor, New Borrower and New Guarantor, Lender hereby consents to the Transfer and Assumption and waives its right to accelerate the

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Loan pursuant to any provision of the Original Borrower’s Loan Documents which might otherwise provide such right to Lender solely on account of such Transfer and Assumption. Lender’s consent to the Transfer and Assumption is not intended to be and shall not be construed as its consent to any subsequent transfer or assumption which requires Lender’s consent pursuant to the terms of the Mortgage or any other Loan Document.

(c)          New Borrower hereby authorizes the Lender to file any and all UCC financing statements and UCC financing statement amendments as Lender may deem necessary from time to time including, without limitation, financing statements containing the description “all assets of New Borrower” or “all personal property of New Borrower” or similar language.

(d)          Concurrently with the Lender’s consent to the Assumption, Lender consents to the delivery of the Payment Guaranty by ARC REIT for the benefit of the Lender as security for a portion of the Future PIP Reserve Account Deposit (as defined in the Payment Guaranty) on the terms and conditions more particularly set forth in the Payment Guaranty. New Borrower, ARC OP and ARC REIT hereby acknowledge and agree that Lender’s consent to the delivery of the Payment Guaranty as security for a portion of the Future PIP Reserve Account Deposit shall not be deemed to be Lender’s consent or agreement to accept a payment guaranty for any other Reserve Funds required to be deposited on or after the Effective Date by Borrower, or any other party, with Lender or Deposit Bank under the terms of the Loan Agreement or any of the other Loan Documents.

(e)          Concurrently with the Lender’s consent to the Assumption, Lender consents to a certain equity investment by W2007 Equity Inns Senior Mezz, LLC, a Delaware limited liability company (the “Qualified Preferred Equity Investor”), in ARC Hospitality Portfolio I Holdco LLC, a Delaware limited liability company (the “Qualified Preferred Equity Investment”), the owner of indirect ownership interests in New Borrower, which Qualified Preferred Equity Investment is evidenced by that certain Amended and Restated Limited Liability Company Agreement, dated as of the date hereof, executed by and among American Realty Capital Hospitality Portfolio Member, LP, a Delaware limited partnership, Qualified Preferred Equity Investor and William G. Popeo, as the initial special member.

(f)          Concurrently with the Lender’s consent to the Assumption, Lender consents to those certain operating lease agreements identified on Schedule III attached hereto and by this reference incorporated herein (collectively, the “Operating Lease Agreements”).

(g)          Concurrently with the Lender’s consent to the Assumption, Lender consents to those certain management agreements identified on Schedule IV attached hereto and by this reference incorporated herein (collectively, the “Management Agreements”).

(h)          Original Borrower, New Borrower and Lender hereby acknowledge that the Cap Agreement (as defined in the Assignment of Rate Cap Agreement) has been novated pursuant to a Novation Confirmation dated on or about the Effective Date executed by SMBC Capital Markets, Inc., New Borrower and Original Borrower.

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3.          Assumption of Obligations. As of the Effective Date, Original Borrower does hereby assign, transfer and convey to New Borrower all of its right, title and interest in and to the Loan Documents, and New Borrower hereby unconditionally accepts and assumes Original Borrower’s right, title and interest in and to the Loan Documents and agrees to comply with all covenants and obligations therein, including, without limitation, the obligation to pay the unpaid balance due and owing on the Loan and all interest thereon. Without limiting the foregoing, New Borrower agrees to keep and observe all of the covenants, terms and conditions required to be kept, observed and performed by Borrower pursuant to the Note, the Mortgage and all of the other Loan Documents, to the same effect as if New Borrower were the original maker of, and a party to, the Loan Documents including, but not limited to, payment of all sums presently outstanding under the Note. New Borrower hereby adopts, ratifies and confirms as of the Effective Date all of the representations, warranties and covenants of Original Borrower contained in the Loan Documents as if made by New Borrower as of the Effective Date except to the extent such representations and warranties are matters which by their nature can no longer be true and correct as a result of the passage of time or apply only to the Original Borrower, Original Guarantor, or other facts or circumstances that existed only at the execution of the Original Borrower’s Loan Documents.

4.            Limited Release of Original Borrower and Original Guarantor; Reaffirmation.

(a)          In reliance upon the representations, warranties and covenants set forth herein by Original Borrower and Original Guarantor, Lender hereby releases: (i) Original Borrower from any and all liability for repayment of the principal and interest under the terms of the Note, the Mortgage and the other Original Borrower’s Loan Documents, and all other obligations under the Original Borrower’s Loan Documents, to the extent such obligations arise from matters first occurring from and after the Effective Date which are not caused by or arise out of any acts of Original Borrower or its Affiliates (as defined in the Loan Agreement); and (ii) Original Guarantor from any and all liability under the Original Guaranty and the Original Environmental Indemnity to the extent arising from matters first occurring from and after the Effective Date which are not caused by or arise out of any acts of Original Guarantor or its Affiliates. Lender hereby reserves all rights it may have against Original Borrower and Original Guarantor for acts or omissions of or events caused by Original Borrower or Original Guarantor, in each case, arising or occurring prior to the Effective Date.

(b)          The release of Original Borrower and Original Guarantor provided for in Section 4(a) above shall be deemed withdrawn and shall have no effect to the extent that this Agreement is held to be void or is determined to be unenforceable in its entirety by any court in a final non-appealable order as a result of any action or inaction by or on behalf of Original Borrower or Original Guarantor, or if any representation or warranty by Original Borrower or Original Guarantor made in connection with this Agreement is false or misleading in any material respect when made. In all cases, Original Borrower and Original Guarantor, as applicable, shall bear the burden of proof on the issue of the time at which an act or event first occurred or an obligation first arose, which is the subject of claimed liability under any of the Original Borrower’s Loan Documents.

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(c)          Notwithstanding anything to the contrary contained herein, and subject to the release contained in Section 4(a) hereof, Original Borrower and Original Guarantor do hereby ratify and confirm their respective obligations under the Original Borrower’s Loan Documents to the extent arising or resulting from acts or omissions of or events caused by Original Borrower or Original Guarantor, in each case, arising or occurring prior to the Effective Date.

5.            Representations.

(a)          Each New Borrower represents and warrants to Berkadia and Lender that as of the Effective Date:

(i)          New Borrower is duly organized, validly existing and in good standing under the laws of its state of formation or organization and is duly qualified and authorized to conduct business in the state(s) in which the Properties are located (as applicable), and has full power and authority to own, lease and operate the Properties, and to conduct its affairs as now being conducted and as proposed to be conducted;

(ii)         New Borrower has full power and authority to enter into, execute, deliver and carry out this Agreement and the Loan Documents to which it is a party, by assumption or otherwise, and to perform its obligations hereunder and thereunder and all such actions have been duly authorized by all necessary actions on its part;

(iii)        This Agreement and the other documents executed in connection herewith have been duly executed and delivered by New Borrower. This Agreement and the Loan Documents to which New Borrower is a party, by assumption or otherwise, constitute legal, valid and binding obligations of New Borrower, enforceable against New Borrower in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally;

(iv)        New Borrower has received and reviewed copies of all of the Loan Documents;

(v)         New Borrower nor, to New Borrower’s knowledge, any person owning an interest in New Borrower (except that New Borrower’s knowledge shall not require any investigation into ownership of issued shares of ARC REIT), is a country, territory, individual or entity named on a list maintained by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), or is a Specially Designated National or Blocked Person under the programs administered by OFAC;

(vi)        Except in connection with the Original Mezzanine Loan (as defined in the Loan Agreement) and the Qualified Preferred Equity Investment (as defined in the Loan Agreement), no equity interest in New Borrower has been pledged, hypothecated or otherwise encumbered as security for any obligation,

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and none of the capital contributed to New Borrower was made in the form of a loan;

(vii)       There is no litigation or other proceeding against New Borrower pending or, to New Borrower’s knowledge, threatened in writing against New Borrower, which, if adversely determined, is reasonably likely to materially and adversely affect the financial condition of New Borrower or its ability to legally perform its obligations under this Agreement and the other Loan Documents;

(viii)      The execution, delivery and performance of this Agreement, and the performance of New Borrower’s obligations under the Loan Documents, (A) does not conflict with or result in a violation of New Borrower’s organizational documents or any judgment, order or decree of any court or arbiter in any proceeding to which New Borrower is a party, and (B) does not conflict with, or constitute a material breach of, or constitute a material default under, any contract, agreement or other instrument by which New Borrower is bound or to which New Borrower is a party;

(ix)         There is no bankruptcy, receivership or insolvency proceeding pending or threatened against New Borrower; and

(x)          No proceeding is pending for the dissolution or annulment of New Borrower, and all license, income and franchise taxes due and payable by New Borrower have been paid in full, unless the non-payment of such taxes could not be reasonably expected to have a material adverse change in the financial condition, operations or business of New Borrower.

(b)          Each New Guarantor individually represents and warrants to Berkadia and Lender that as of the Effective Date, solely with respect to itself:

(i)          Such New Guarantor is duly organized, validly existing and in good standing under the laws of the state of its formation and has full power and authority to conduct its affairs as now being conducted and as proposed to be conducted;

(ii)         This Agreement, the New Guaranty, the New Environmental Indemnity and the other documents executed by such New Guarantor in connection herewith have been duly executed and delivered by such New Guarantor. This Agreement, the New Guaranty, the New Environmental Indemnity and such other documents constitute such New Guarantor’s legal, valid and binding obligations, enforceable against such New Guarantor in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally;

(iii)        Such New Guarantor has received and reviewed copies of all of the Loan Documents;

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(iv)        Such New Guarantor nor, to such New Guarantor’s knowledge, any person owning an interest in such New Guarantor (except that such New Guarantor’s knowledge shall not require any investigation into ownership of issued shares of ARC REIT), is a country, territory, individual or entity named on a list maintained by OFAC, or is a Specially Designated National or Blocked Person under the programs administered by OFAC;

(v)         There is no litigation or other proceeding against such New Guarantor pending or, to such New Guarantor’s knowledge, threatened in writing against such New Guarantor, which, if adversely determined, is reasonably likely to materially and adversely affect the financial condition of such New Guarantor or its ability to legally perform its obligations under this Agreement and the other Loan Documents to which such New Guarantor is a party;

(vi)        Such New Guarantor has full power and authority to enter into, execute, deliver and perform this Agreement and the New Guaranty, the New Environmental Indemnity and the other documents executed by such New Guarantor in connection herewith and such execution, delivery and performance (A) have been duly and validly authorized by all necessary actions on the part of such New Guarantor, (B) does not conflict with or result in a violation of such New Guarantor’s organizational documents or any judgment, order or decree of any court or arbiter in any proceeding to which such New Guarantor is a party, and (C) does not conflict with, or constitute a material breach of, or constitute a material default under, any contract, agreement or other instrument by which such New Guarantor is bound or to which such New Guarantor is a party;

(vii)       There is no bankruptcy, receivership or insolvency proceeding pending or threatened against such New Guarantor; and

(viii)      No proceeding is pending for the dissolution or annulment of such New Guarantor, and all license, income and franchise taxes due and payable by such New Guarantor have been paid in full, unless the non-payment of such taxes could not be reasonably expected to have a material adverse change in the financial condition, operations or business of New Guarantor.

(c)          Each Original Borrower represents and warrants to Berkadia and Lender that as of the Effective Date:

(i)          Contemporaneously with the execution and delivery hereof, Original Borrower has conveyed and transferred the Properties to New Borrower;

(ii)         Contemporaneously with the execution and delivery hereof, Original Borrower has assigned and transferred to New Borrower the Tenant Leases (as hereinafter defined), and Original Borrower has retained no rights therein or thereto;

(iii)        Original Borrower has not received a security instrument or security agreement from New Borrower encumbering the Properties to secure the

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payment of any sums due Original Borrower or obligations to be performed by New Borrower;

(iv)        There exist no defenses, offsets or counterclaims by Original Borrower to this Agreement or the Original Borrower’s Loan Documents;

(v)         There is no Event of Default by Original Borrower under the provisions of Original Borrower’s Loan Documents executed or assumed by Original Borrower, nor, to Original Borrower’s knowledge, are there any conditions which with the giving of notice or the passage of time or both may constitute an Event of Default by Original Borrower under the provisions of the Original Borrower’s Loan Documents;

(vi)        The Original Borrower’s Loan Documents are in full force and effect;

(vii)       There are no mechanics’ liens or liens for delinquent taxes or assessments encumbering the Properties except Permitted Encumbrances (as defined in the Loan Agreement);

(viii)      To Original Borrower’s knowledge, there are no pending or threatened condemnation or annexation proceedings affecting the Properties, or any agreements to convey any portion of the Properties or any rights thereto not disclosed in this Agreement, including, without limitation, to any governmental agency;

(ix)         The certified rent roll for the Properties provided to Lender on or about the date hereof, is a true, complete and accurate list of all tenant leases (“Tenant Leases” or individually a “Tenant Lease”) affecting the Properties as of the Effective Date hereof;

(x)          There is no litigation or other proceeding against Original Borrower or the Properties pending or overtly threatened, by written communication to Original Borrower, wherein an unfavorable decision might reasonably result in a material adverse change in the financial condition of Original Borrower or its ability to legally perform its obligations under this Agreement and the Original Borrower’s Loan Documents;

(xi)         There is no bankruptcy, receivership or insolvency proceeding pending or, to Original Borrower’s knowledge, threatened in writing against Original Borrower;

(xii)        No proceeding is pending for the dissolution or annulment of Original Borrower, and all license, income and franchise taxes due and payable by Original Borrower have been paid in full; and

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(xiii)       Original Borrower has full power and authority to enter into, execute, deliver and perform this Agreement and such execution, delivery and performance (A) have been duly and validly authorized by all necessary actions on the part of Original Borrower, (B) does not conflict with or result in a violation of Original Borrower’s organizational documents or any judgment, order or decree of any court or arbiter in any proceeding to which Original Borrower is a party, and (C) does not conflict with, or constitute a material breach of, or constitute a material default under, any contract, agreement or other instrument by which Original Borrower is bound or to which Original Borrower is a party.

(d)          Each Original Guarantor represents and warrants to Berkadia and Lender that as of the Effective Date:

(i)          As of the Effective Date, there is no Event of Default or, to Original Guarantor’s knowledge, event which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Original Borrower’s Loan Documents executed or assumed by Original Guarantor;

(ii)         The Original Borrower’s Loan Documents executed by Original Guarantor are in full force and effect;

(iii)        There is no litigation or other proceeding against Original Guarantor pending or overtly threatened, by written communication to Original Guarantor, wherein an unfavorable decision might reasonably result in a material adverse change in the financial condition of Original Guarantor or its ability to legally perform its obligations under this Agreement;

(iv)        Original Guarantor has the full power and authority to enter into this Agreement and perform its obligations hereunder. The execution, delivery and performance of this Agreement and the other documents contemplated herein by Original Guarantor (A) have been duly and validly authorized by all necessary action on the part of Original Guarantor, (B) does not conflict with or result in a violation of Original Guarantor’s organizational documents or any judgment, order or decree of any court or arbiter in any proceeding to which Original Guarantor is a party, and (C) does not conflict with, or constitute a material breach of, or constitute a material default under, any contract, agreement or other instrument by which Original Guarantor is bound or to which Original Guarantor is a party;

(v)         There is no bankruptcy, receivership or insolvency proceeding pending or, to Original Guarantor’s knowledge, threatened in writing against Original Guarantor; and

(vi)        No proceeding is pending for the dissolution or annulment of Original Guarantor, and all license, income and franchise taxes due and payable by Original Guarantor have been paid in full.

6.          Financial Information.

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(a)          New Borrower hereby represents and warrants to Lender that all information and materials regarding New Borrower and its affiliates provided by or on behalf of New Borrower to Berkadia were true and correct in all material respects as of the date of delivery thereof and remain materially true and correct as of the Effective Date.

(b)          Each New Guarantor hereby represents and warrants to Lender, solely as to itself, that all information and materials regarding such New Guarantor and its affiliates provided by or on behalf of such New Guarantor to Berkadia were true and correct in all material respects as of the date of delivery thereof and remain materially true and correct as of the Effective Date.

7.            Addresses. Lender, New Borrower and New Guarantor agree that all notice provisions contained in the Loan Documents are hereby modified to amend the notice address for Lender, New Borrower and New Guarantor, and that from and after the Effective Date, the notice addresses for Lender, New Borrower and New Guarantor, respectively, are as follows:

If to Lender:

U.S. Bank National Association, as Trustee for the Registered Holders of EQTY 2014-INNS Mortgage Trust, Commercial Mortgage Pass-Through Certificates

c/o Berkadia Commercial Mortgage LLC

323 Norristown Road, Suite 300

Ambler, PA 19002

Attention: Client Relations Manager for

Loan Nos. 01-0085683 & 01-0086643

Facsimile No.: (215) 328-3832

If to New Borrower:

c/o American Realty Capital

405 Park Avenue

New York, New York 10022

Facsimile No.: (212) 421-5799

If to New Guarantor:

Whitehall Street Global Real Estate Limited Partnership 2007 and Whitehall Parallel Global Real Estate Limited Partnership 2007

c/o Goldman Sachs & Co.

200 West Street

New York, New York 10282

Attention: Chief Financial Officer

Facsimile No.: (212) 357-5505

And

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American Realty Capital Hospitality Operating Partnership, L.P. and

American Realty Capital Hospitality Trust, Inc.

c/o American Realty Capital

405 Park Avenue

New York, New York 10022

Facsimile No.: (212) 421-5799

with a copy to:

Goldman Sachs Realty Management, L.P.

6011 Connection Drive

Irving, Texas 7039

Attention: Investment Management

Facsimile No.: (972) 368-3699

with a copy to:

Sullivan & Cromwell LLP

125 Broad Street

New York, NY 10004

Attention: Anthony J. Colletta, Esq.

Facsimile No. (212) 291-9029

with a copy to:

Goodwin Procter LLP

53 State Street

Boston, MA 02109

Attn: Samuel L. Richardson, Esq.

Facsimile No.: (617) 523-1231

8.          Release of Berkadia and Lender. Original Borrower, New Borrower, Original Guarantor and New Guarantor hereby each, as to its own Claims only, unconditionally and irrevocably releases and forever discharges Berkadia and Lender and their respective successors, assigns, agents, directors, officers, employees, and attorneys (collectively, the “Indemnitees”) from all Claims, as defined below, and each, as to its own Claims only, agrees to indemnify the Indemnitees, hold the Indemnitees harmless, and defend the Indemnitees with counsel reasonably acceptable to the Indemnitees from and against any and all claims, losses, causes of action, costs and expenses of every kind or character in connection with the Claims and/or the transfer of the Properties in connection with this Agreement (excluding any Claims arising out of or resulting from the gross negligence, illegal acts, bad faith or willful misconduct of any of the Indemnitees). As used in this Agreement, the term “Claims” shall mean any and all possible claims, demands, actions, costs, expenses and liabilities whatsoever, known or unknown, at law or in equity, originating in whole or in part on or before the Effective Date, which each of Original Borrower, New Borrower, Original Guarantor or New Guarantor or any

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of their respective directors, partners, principals, affiliates, members, shareholders, officers, agents, employees or successors, may now or hereafter have against the Indemnitees, if any, and irrespective of whether any such Claims arise out of contract, tort, violation of laws, or regulations, or otherwise in connection with the Loan or any of the Loan Documents (other than the Assumption Agreement) or the Original Borrower’s Loan Documents, including, without limitation, any contracting for, charging, taking, reserving, collecting or receiving interest in excess of the highest lawful rate applicable thereto and any loss, cost or damage, of any kind or character, arising out of or in any way connected with or in any way resulting from the acts, actions or omissions of any of the Indemnitees (excluding any claims, demands, actions, costs, expenses and liabilities arising out of or resulting from the gross negligence, illegal acts, bad faith or willful misconduct of any of the Indemnitees), including any requirement that the Loan Documents or Original Borrower’s Loan Documents be modified as a condition to the transactions contemplated by this Agreement. Original Borrower, New Borrower, Original Guarantor and each New Guarantor agree that Berkadia and Lender have no fiduciary or similar obligations to Original Borrower, New Borrower, Original Guarantor or New Guarantor or any of them and that their relationship is strictly that of creditor and debtor. This release is accepted by Berkadia and Lender pursuant to this Agreement and shall not be construed as an admission of liability on the part of either of them. Original Borrower, New Borrower, Original Guarantor and each New Guarantor hereby represents and warrants, each as to itself only, that it is the current legal and beneficial owner of all Claims, if any, applicable to it and released hereby by such party and has not assigned, pledged or contracted to assign or pledge any such Claim to any other person.

9.          Confirmation of Waivers. New Borrower, without limiting the generality of its obligations under the Loan Documents, hereby confirms and ratifies the submission to jurisdiction and waivers set forth in the Loan Documents.

10.         Binding Effect. This Agreement shall be binding upon the parties and their respective heirs, executors, administrators, successors, permitted assigns and representatives.

11.         Ratification. Lender and New Borrower hereby ratify and affirm all of the Loan Documents and all of its or the other’s, as applicable, respective rights, agreements, obligations, priorities, reservations, promises and waivers as made and agreed and contained therein and as assumed pursuant to this Agreement by New Borrower, all of which shall remain in full force and effect.

12.         No Impairment of Lien; No Satisfaction. Nothing set forth herein shall affect the priority or extent of the lien of the Mortgage or any of the other Loan Documents, nor, except as expressly set forth herein, release or change the liability of any party who may now be or after the Effective Date, become liable, primarily or secondarily, under the Loan Documents. This Agreement does not, and shall not be construed to, constitute the creation of new indebtedness or the satisfaction, discharge or extinguishment of the debt secured by the Loan Documents.

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13.         Third Party Beneficiary Status of Berkadia. New Borrower, Original Borrower, Original Guarantor and New Guarantor hereby each acknowledges and agrees that Berkadia, its successors and assigns, are all intended third party beneficiaries of this Agreement.

14.         Bankruptcy Remote Single Purpose Entities. New Borrower is currently a bankruptcy-remote single purpose entity and will take all necessary company action (including, but not limited to, revising and filing charter and control documents in form, substance and structure as may be reasonably required by Lender) in order for the New Borrower to continue as a bankruptcy-remote single purpose entity.

15.         Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering Laws. For the avoidance of doubt, New Borrower shall comply with the requirements of Section 4.32 of the Loan Agreement.

16.         Fees. Original Borrower, New Borrower and Lender have agreed that, simultaneously with the execution hereof, all fees, costs, and charges arising in connection with the execution of this Agreement, including without limitation, all reasonable attorneys’ fees, title company fees, title insurance premiums, recording costs, assumption and/or transfer fees and other closing costs incurred by Lender in connection with this Agreement, will be paid as of the Effective Date, and that Lender shall have no obligation whatsoever for payment thereof. New Borrower acknowledges and agrees that none of the fees, costs, and charges paid in connection with the execution of this Agreement shall be applied to or set off against the principal balance of the Note.

17.         Miscellaneous.

(a)          Choice of Law. The validity and enforcement of this Agreement and the other Loan Documents, to the extent they involve the creation, perfection, assignment, modification and enforcement of liens and security interests against property located in the state, commonwealth or district in which the Properties are located, are intended to be governed by the laws of the state, commonwealth or district in which the Properties are located. All other aspects of the transaction contemplated by this Agreement and the indebtedness evidenced by the Note, and the Loan Documents shall be governed by and construed in accordance with the laws of the State of New York pursuant to Section 5-1401 of the New York General Obligations Law.

(b)          Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

(c)          Modifications. No change or modification of this Agreement shall be valid unless the same is in writing and signed by all parties hereto.

(d)          Complete Agreement. This Agreement and the Loan Documents represent the complete agreement among the parties with regard to the items set forth herein, and

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there are no representations, covenants, warranties, agreements or conditions, oral or written, between the parties not set forth in this Agreement and the Loan Documents.

(e)          Headings, Schedules and Exhibits. The Article and/or Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. The Schedules and Exhibits annexed hereto are hereby incorporated herein as a part of this Agreement with the same effect as if set forth in the body hereof.

(f)          Counterparts. This Agreement may be executed in any number of counterparts, each of which when taken together shall be deemed an original, but all of which shall together constitute one and the same instrument.

(g)          Joint and Several Liability. If New Borrower consists of more than one person or entity, each is jointly and severally liable to perform the obligations of New Borrower hereunder, and all representations, warranties, covenants and agreements made by New Borrower are joint and several.

18.         Supremacy Clause. It is hereby agreed that the terms and conditions of the Mortgage, the Note and other Loan Documents, as modified by this Agreement, shall remain in full force and effect and shall be binding upon New Borrower. It is understood and agreed that in the event there are any conflicting or omitted provisions or variations between the terms, conditions, rights, or remedies in the Mortgage, the Note or any other Loan Document (other than this Agreement) and the terms of this Agreement, those terms, conditions, rights or remedies which are most favorable to Lender shall remain in full force and effect and shall prevail. A default under the terms and conditions of this Agreement shall constitute a default under the terms and conditions of the Mortgage, the Note and other Loan Documents.

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

20.         Further Assurances. Original Borrower, Original Guarantor, New Borrower and New Guarantor shall cooperate with Lender and shall execute and deliver, or cause to be executed and delivered, all such other documents and instruments, and shall take all such other action that Lender may request from time to time in order to accomplish and satisfy the provisions and purposes of this Agreement, including such confirmations and/or corrective instruments as Lender reasonably may require, provided that such documents, instruments or

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actions shall not increase the liabilities or obligations of Original Borrower, Original Guarantor, New Borrower or New Guarantor under this Agreement of any of the other Loan Documents.

21.         Modification to Loan Documents. From and after the Effective Date, New Borrower and Lender hereby agree that the Loan Documents are hereby amended as follows:

(a) Schedule I of the Loan Agreement is hereby deleted in its entirety and replaced with that certain schedule of Individual Properties and Allocated Loan Amounts attached hereto as Exhibit B.

(b) Schedule I-M1 of the Loan Agreement is hereby deleted in its entirety and replaced with that certain schedule of Original Mezzanine Loan Allocated Loan Amounts attached hereto as Exhibit C.

(c) Schedule II of the Loan Agreement is hereby deleted in its entirety and replaced with that certain schedule of Required Repairs attached hereto as Exhibit D and by this reference incorporated herein. Lender acknowledges that the Required Repairs that appear on Schedule II to the Loan Agreement but not on Exhibit D attached hereto have been completed as required pursuant to the Loan Agreement.

(d) Schedule III to the Loan Agreement is hereby deleted in its entirety and replaced with that certain Organizational Chart of New Borrower attached hereto as Exhibit E and by this reference incorporated herein.

(e) Schedule VI to the Loan Agreement is hereby deleted in its entirety and replaced with that certain schedule of Intellectual Property/Websites attached hereto as Exhibit F and by this reference incorporated herein.

(f) Schedule VIII to the Loan Agreement is hereby amended to include the additional documents pertaining to the Ground Leases listed on that certain exhibit of additional Ground Lease documents attached hereto as Exhibit A-2.

(g) Schedule XI to the Loan Agreement is hereby deleted in its entirety and replaced with that certain Rent Roll attached hereto as Exhibit G and by this reference incorporated herein.

(h) Schedule XII to the Loan Agreement is hereby deleted in its entirety and replaced with that certain schedule of Franchise Agreements attached hereto as Exhibit H and by this reference incorporated herein.

(i) Schedule XIII to the Loan Agreement is hereby deleted in its entirety and replaced with that certain schedule of Property Accounts and Property Account Banks attached hereto as Exhibit I and by this reference incorporated herein.

(j) Schedule XV to the Loan Agreement is hereby deleted in its entirety and replaced with that certain schedule of Closing Date Managers attached hereto as Exhibit J.

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(k) Schedule XVII to the Loan Agreement is hereby deleted in its entirety and replaced with that certain schedule of Expiring Franchise Properties attached hereto as Exhibit K and by this reference incorporated herein.

(l) Schedule XVIII to the Loan Agreement is hereby deleted in its entirety and replaced with that certain Scheduled PIP attached hereto as Exhibit L and by this reference incorporated herein.

(m) Schedule XXI to the Loan Agreement is hereby deleted in its entirety and replaced with that certain PIP Work Other Than Scheduled PIP attached hereto as Exhibit M and by this reference incorporated herein

(n) The defined term “Title Insurance Policy” as provided in Section 1.1 of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

“Title Insurance Policy” shall mean, with respect to each Individual Property, an ALTA mortgagee title insurance policy in the form acceptable to Lender issued with respect to such Individual Property and insuring the Lien of the Mortgage encumbering such Individual Property, as amended or dated-down.

(o) Except as provided herein, all references in the Loan Documents to the defined term “LLC Borrower” shall mean, collectively, LLC New Borrower, BHGL New Borrower, PXGL New Borrower, GBGL New Borrower, NFGL New Borrower, MBGL 1000 New Borrower and MBGL 950 New Borrower, each as defined in this Agreement.

(p) All references in the Loan Documents to the defined term “LP Borrower” shall mean, collectively, LP New Borrower, DLGL New Borrower and SAGL New Borrower, each as defined in this Agreement.

(q) For the purpose of Section 6.14 of the Loan Agreement, all references to “Account Representative” shall mean LLC New Borrower on behalf of Borrower, or the designee of a TRS Lessee.

(r) All references in the Loan Documents to the defined term “Liquor Subsidiary” shall mean ARC Hospitality Portfolio I KS TRS, LLC, a Kansas limited liability company, ARC Hospitality Portfolio I TX Beverage Company, LLC, a Delaware limited liability company, and/or ARC Hospitality Portfolio I Concessions, LLC, a Delaware limited liability company, as may be then applicable.

(s) The term “ARC Hospitality” as defined in Section 4.14.2(b) of the Loan Agreement shall mean American Realty Capital Hospitality Properties, LLC or American Realty Capital Hospitality Grace Portfolio, LLC, a Delaware limited liability company, a wholly-owned subsidiary of American Realty Capital Hospitality Properties, LLC.

(t) Section 10.4(b) of the Loan Agreement is hereby modified by deleting “CT Corporation System, 111 Eighth Avenue, New York, New York 10011” and replacing it with

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“Corporation Service Company, 1180 Avenue of the Americas, Suite 210, New York, New York 10036-8401”.

(u) The defined term “Clearing Account” as provided in Section 1.1 of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

Clearing Accounts” shall mean the Eligible Accounts maintained at the Clearing Account Bank by the Individual Borrowers or a TRS Lessee in their respective names and shall include the Clearing Accounts, the Aggregate DACA Accounts and the Sub-DACA Accounts, each as defined in that certain Cash Management Agreement, dated as of February 27, 2015.

(v) The second sentence of Section 6.1 of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

Without in any way limiting the foregoing, if Borrower or Manager receives any Gross Revenue from the Properties or any other amount which would be included in the Operating Income of the Properties, then (i) such amounts shall be deemed to be collateral for the Obligations and shall be held in trust for the benefit, and as the property, of Lender, (ii) such amounts shall not be commingled with any other funds or property of Borrower or Manager, and (iii) Borrower or Manager, as applicable shall deposit such amounts in the applicable Property Account or Clearing Account on a daily basis.

(w) The defined term “Base Management Fees” as provided in Section 1.1 of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

shall mean the base property management fees (i.e. based on a fixed percentage of revenues and not on the basis of any override or profit participation) for property management (as opposed to asset management) services provided to the Individual Properties and actually payable to Manager under the Management Agreements, but such fees, for any Manager, shall not exceed four percent (4.0%) of the monthly Adjusted Operating Income for the Individual Properties managed by such Manager and all such fees payable to all Managers in the aggregate shall not exceed four percent (4.0%) of the monthly Adjusted Operating Income for the Properties; provided, however, that any portion of the Base Management Fees in excess of three percent (3%) (the “Subordinated Portion of the Base Management Fees”) shall be payable only to the extent that (1) no Triggering Period has occurred and is then continuing; and (2) there is sufficient Available Cash to pay such amount (which amount will then be paid out of such Available Cash and from no other source) for the Individual

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Properties managed by such Manager. Notwithstanding anything to the contrary contained herein, if the Subordinated Portion of the Base Management Fees shall be due to Managers pursuant to the terms set forth herein, such Subordinated Portion of the Base Management Fees shall accrue but shall not be payable to the Managers until such time as (x) the Borrower has reserved in the Future PIP Reserve Account a cash deposit in an amount equal to all outstanding Future PIP Reserve Funds guaranteed by that certain Payment Guaranty (PIP Reserve Funds), dated on or about February 27, 2015, by American Realty Capital Hospitality Trust, Inc., a Maryland corporation, for the benefit of Lender (the “Guaranteed PIP Funds”), or (y) Borrower shall have completed all PIP Work and paid all Approved Future PIP Expenses in connection with the Guaranteed PIP Funds with the Future PIP Reserve Funds in accordance with the Loan Documents or as otherwise agreed to by Lender.

(x)          The defined term “Qualified IPO” as provided in Section 1.1 of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

shall mean transfers of direct or indirect ownership interests in the direct owner of the most junior Mezzanine Borrower pursuant to (i) an initial public offering directly or indirectly involving such entity which is listed on the New York Stock Exchange or another nationally or internationally recognized stock exchange or is quoted on a national quotation system, or (ii) the listing of American Realty Capital Hospitality Trust, Inc.’s common stock on the New York Stock Exchange or another nationally or internationally recognized stock exchange.

(y)          Section 7.2(g)(iv) of the Loan Agreement is hereby deleted in its entirety.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

26

IN WITNESS WHEREOF, the parties hereto have executed this Assumption and Release Agreement as of the day and year first above written.

ORIGINAL BORROWER:
W2007 Equity Inns Realty, LLC, a Delaware limited liability company
By:	WNT Mezz I, LLC, its Manger

By:

Name:

Title:

W2007 Equity Inns Realty, L.P., a Delaware limited partnership
By:	W2007 Equity Inns Realty Gen-Par, LLC, a Delaware limited liability company, its General Partner

By:

Name:

Title:

[Signatures continue on next page]

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

NEW BORROWER:

ARC Hospitality Portfolio I Owner, LLC, a Delaware limited liability company

By:

Name: Jonathan Mehlman

Title:   CEO and President

ARC Hospitality Portfolio I BHGL Owner, LLC, a Delaware limited liability company

By:

Name: Jonathan Mehlman

Title:   CEO and President

ARC Hospitality Portfolio I PXGL Owner, LLC, a Delaware limited liability company

By:

Name: Jonathan Mehlman

Title: CEO and President

[Signatures continue on next page]

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

ARC Hospitality Portfolio I GBGL Owner, LLC, a Delaware limited liability company

By:

Name: Jonathan Mehlman

Title:   CEO and President

ARC Hospitality Portfolio I NFGL Owner, LLC, a Delaware limited liability company

By:

Name: Jonathan Mehlman

Title: CEO and President

ARC Hospitality Portfolio I MBGL 1000 Owner, LLC, a Delaware limited liability company

By:

Name: Jonathan Mehlman

Title: CEO and President

ARC Hospitality Portfolio I MBGL 950 Owner, LLC, a Delaware limited liability company

By:

Name: Jonathan Mehlman

Title: CEO and President

[Signatures continue on next page]

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

ARC Hospitality Portfolio I NTC Owner, LP, a Delaware limited partnership
By:	ARC Hospitality Portfolio I NTC Owner GP, LLC, a Delaware limited liability company

By:

Name: Jonathan Mehlman

Title:   CEO and President

ARC Hospitality Portfolio I DLGL Owner, LP, a Delaware limited partnership
By:	ARC Hospitality Portfolio I NTC Owner GP, LLC, a Delaware limited liability company

By:

Name: Jonathan Mehlman

Title:    CEO and President

ARC Hospitality Portfolio I SAGL Owner, LP, a Delaware limited partnership
By:	ARC Hospitality Portfolio I NTC Owner GP, LLC, a Delaware limited liability company

By:

Name: Jonathan Mehlman

Title:    CEO and President

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Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

LENDER:
U.S. Bank National Association, as Trustee for the Registered Holders of EQTY 2014-INNS Mortgage Trust, Commercial Mortgage Pass-Through Certificates
By:	KeyBank National Association
Its:	Master Servicer

By:	Berkadia Commercial Mortgage LLC, a Delaware limited liability company
Its:	Subservicer

By:

Name: Gary A. Routzahn

           Authorized Representative

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Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

ORIGINAL GUARANTOR:
Whitehall Street Global Real Estate Limited Partnership 2007, a Delaware limited partnership
By:	WH Advisors, L.L.C. 2007, a Delaware
	limited liability company, its General
	Partner

By:

Name:

Title:

Whitehall Parallel Global Real Estate Limited Partnership 2007, a Delaware limited partnership
By:	WH Advisors, L.L.C. 2007, a Delaware
	limited liability company, its General
	Partner

By:

Name:

Title:

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Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

NEW GUARANTOR:
American Realty Capital Hospitality Operating Partnership, L.P., a Delaware limited partnership
By:	American Realty Capital Hospitality Trust, Inc., a Maryland corporation, its general partner

By:

Name: Jonathan Mehlman

Title:    CEO and President

American Realty Capital Hospitality Trust, Inc., a Maryland corporation

By:

Name: Jonathan Mehlman

Title:    CEO and President

[Signatures continue on next page]

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

Whitehall Street Global Real Estate Limited Partnership 2007, a Delaware limited partnership
By:	WH Advisors, L.L.C. 2007, a Delaware
	limited liability company, its General
	Partner

By:

Name:

Title:

Whitehall Parallel Global Real Estate Limited Partnership 2007, a Delaware limited partnership
By:	WH Advisors, L.L.C. 2007, a Delaware
	limited liability company, its General
	Partner

By:

Name:

Title

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

SCHEDULE I

Reserve Balances

Immediately prior to the Effective Date:

Tax Account:	$	310,574.59
Insurance Account:	$	0.00
Required Repairs Account:	$	139,174.88
Scheduled PIP Reserve Account	$	0.00
Ground Rent Account:	$	0.00
FF&E Reserve Account:	$	0.00
Casualty and Condemnation Account:	$	0.00
Cash Collateral Account	$	0.00
Total Balance of Accounts:	$	449,749.47

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

SCHEDULE II

Mortgage, Assignment of Leases and Mortgage Assumptions

(see attached)

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

SCHEDULE III

Operating Lease Agreements

(see attached)

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

SCHEDULE IV

Management Agreements

(see attached)

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

EXHIBIT A-1

Legal Description of Real Property

(see attached)

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

EXHIBIT A-2

Description of Ground Leases

AMENDMENT TO SCHEDULE VIII

ADDITIONAL GROUND LEASE DOCUMENTS

Property	Additional Ground Lease Documents
Hampton Inn Birmingham (Mountain Brook), AL	·      Consent of Landlord by S&S Associates LLC and New Owners, Vestavia LLC as Tenants in Common ·     Assignment and Assumption of Ground Lease, dated February 27, 2015, by W2007 Equity Inns Realty, LLC in favor of ARC Hospitality Portfolio I BHGL Owner, LLC ·     Unconditional & Irrevocable Guaranty, by American Realty Capital Hospitality Trust, Inc. in favor of S&S Associates LLC and New Owners, Vestavia LLC as Tenants in Common
Homewood Suites, Phoenix, AZ	·     Assignment and Assumption of Ground Lease, dated February 27, 2015, by W2007 Equity Inns Realty, LLC in favor of ARC Hospitality Portfolio I PXGL Owner, LLC
Hampton Inn, Norfolk, VA	·     Ground Lease Consent to Assignment and Sublease and Estoppel, dated as of January 21, 2015, between Glenwood Square Shopping Center Associates, L.L.C. and ARC Hospitality Portfolio I NFGL Owner, LLC ·     Assignment and Assumption of Ground Lease, dated February 27, 2015, by W2007 Equity Inns Realty, LLC in favor of ARC Hospitality Portfolio I NFGL Owner, LLC ·     Guaranty of Lease, made as of the [27th day of February 2015], by American Realty Capital Hospitality Operating Partnership, L.P., in favor of Glenwood Square Shopping Center Associates, L.L.C.

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

Courtyard, Dallas, TX	·      Consent to Assignment, Sublease, Management Agreement, Sub-Management Agreement, Concession Agreement and Alcohol Services Agreement and Amendment to Ground Lease, dated as of [February 27, 2015] by Istar Dallas GL LLP, W2007 Equity Inns Realty, LP, ARC Hospitality Portfolio I DLGL Owner, LP, American Realty Capital Hospitality Grace Portfolio, LLC, Crestline Hotels & Resorts, LLC and ARC Hospitality Portfolio I TX Beverage Company, LLC ·     Guaranty of Lease dated February 27, 2015 by American Realty Capital Hospitality Trust, Inc. to Istar Dallas GL LLP ·     Assignment and Assumption of Ground Lease, dated February 27, 2015, by W2007 Equity Inns Realty, LP in favor of ARC Hospitality Portfolio I DLGL Owner, LP
Residence Inn, Mobile, AL	·     Assignment and Assumption of Ground Lease, dated February 27, 2015, by W2007 Equity Inns Realty, LLC in favor of ARC Hospitality Portfolio I MGBL 950 Owner, LLC
Courtyard, Mobile, AL	·     Assignment and Assumption of Ground Lease, dated February 27, 2015, by W2007 Equity Inns Realty, LLC in favor of ARC Hospitality Portfolio I MGBL 1000 Owner, LLC
Springhill Suites, San Antonio, TX	·     Consent to Assignment and Assumption of Lease, made and entered into as of the 31st day of December, 2014, by and between Crossroads Mall Partners, Ltd, W2007 Equity Inns Realty, L.P. and ARC Hospitality Portfolio I SAGL Owner, LP ·     Assignment and Assumption of Ground Lease, dated February 27, 2015, by W2007 Equity Inns Realty, LP in favor of ARC Hospitality Portfolio I SAGL Owner, LP ·     Guaranty, dated as of [February 27, 2015], by American Realty Capital Hospitality Trust, Inc. in favor of Crossroads Mall Partners, Ltd.

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

·     Consent to Sublease dated as of January 27, 2015 by and between Crossroads Mall Partners, Ltd, ARC Hospitality Portfolio I SAGL Owner, LP, and ARC Hospitality Portfolio I NTC TRS, LP

Hampton Inn, Baltimore (Glen Burnie), MD

·     Lease Assignment and Assumption Agreement, dated [February 27, 2015], by Governor Plaza Associates, Federal Realty Investment Trust, W2007 Equity Inns Realty, LLC, ARC Hospitality Portfolio I GBGL Owner, LLC, ARC Hospitality Portfolio I HIL TRS, LLC, and American Realty Capital Hospitality Trust, Inc. ·     Assignment and Assumption of Ground Lease, dated [February 27, 2015], by W2007 Equity Inns Realty, LLC in favor of ARC Hospitality Portfolio I GBGL Owner, LLC ·     Guaranty, dated as of [February 27, 2015], by American Realty Capital Hospitality Trust, Inc. in favor of Governor Plaza Associates and Federal Realty Investment Trust

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

EXHIBIT B

Individual Properties and Allocated Loan Amounts

Individual Property Name	Allocated Loan Amount
Hampton Inn Morgantown		9,039,931
Hampton Inn Beckley		11,063,797
Hyatt Place Richmond Innsbrook		5,329,512
Hampton Inn Norfolk-Naval Base		2,563,563
Fairfield Inn & Suites by Marriott Dallas Medical Market Center		6,447,614
Courtyard by Marriott Dallas Medical Market Center		12,480,502
SpringHill Suites by Marriott Austin Round Rock		5,801,747
Hilton Garden Inn Austin Round Rock		8,432,772
SpringHill Suites by Marriott San Antonio Medical Center Northwest		3,912,806
SpringHill Suites by Marriott Houston Hobby Airport		7,825,612
Hampton Inn Dallas-Addison		6,678,755
Homewood Suites by Hilton San Antonio-Northwest		9,782,015
Hampton Inn & Suites Nashville Franklin Cool Springs		13,964,670
Courtyard by Marriott Knoxville Cedar Bluff		7,555,764
Residence Inn by Marriott Chattanooga Downtown		7,420,839
Residence Inn by Marriott Knoxville Cedar Bluff		6,948,604
Hyatt Place Nashville Franklin Cool Springs		10,119,326
Hyatt Place Memphis Wolfchase Galleria		6,948,604
Homewood Suites by Hilton Memphis-Germantown		5,127,125
Hampton Inn Memphis-Poplar		8,635,158
Hampton Inn Pickwick Dam at Shiloh Falls		1,416,706
Hampton Inn Chattanooga Airport I-75		2,986,031
Hampton Inn Columbia I-26 Airport		3,642,957
Hampton Inn Charleston-Airport Coliseum		2,493,889
Holiday Inn Charleston Mount Pleasant		7,150,990
Hampton Inn Scranton at Montage Mountain		7,690,688
Hampton Inn State College		7,825,612
Residence Inn by Marriott Portland Downtown Lloyd Center		21,925,207
Hyatt Place Columbus Worthington		5,801,747
Hyatt Place Cincinnati Blue Ash		4,587,428
Hampton Inn Columbus Dublin		7,623,226

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

Hampton Inn Cleveland-Westlake	8,365,310
Hampton Inn Albany-Wolf Road (Airport)	11,198,721
Hyatt Place Las Vegas	12,345,578
Hyatt Place Albuquerque Uptown	10,119,326
Courtyard by Marriott Asheville	8,635,158
Hampton Inn Fayetteville I-95	3,527,940
Hampton Inn Charlotte-Gastonia	6,881,142
Hampton Inn St. Louis Westport	5,194,587
Hampton Inn Kansas City-Airport	6,341,444
Hyatt Place Minneapolis Airport-South	8,230,385
SpringHill Suites by Marriott Grand Rapids North	7,285,915
Hampton Inn Grand Rapids-North	8,095,461
Hampton Inn Detroit Madison Heights South Troy	8,230,385
Hampton Inn Detroit Northville	6,071,596
Hyatt Place Baltimore BWI Airport	6,746,217
Hampton Inn Baltimore Glen Burnie	1,821,479
Homewood Suites by Hilton Boston-Peabody	6,206,520
Hampton Inn Boston Peabody	9,107,394
Hyatt Place Baton Rouge I-10	7,690,688
Residence Inn by Marriott Lexington South Hamburg Place	8,230,385
SpringHill Suites by Marriott Lexington Near the University of Kentucky	9,647,091
Courtyard by Marriott Louisville Downtown	18,214,787
Courtyard by Marriott Lexington South Hamburg Place	9,444,704
Courtyard by Marriott Bowling Green Convention Center	7,758,150
Hyatt Place Kansas City Overland Park Metcalf	5,464,436
Hampton Inn Kansas City Overland Park	2,493,889
Hyatt Place Indianapolis Keystone	7,758,150
Courtyard by Marriott Chicago Elmhurst Oakbrook Area	7,285,915
Homewood Suites by Hilton Chicago Downtown	44,784,930
Hampton Inn Chicago Gurnee	7,758,150
Residence Inn by Marriott Boise Downtown	5,869,209
Fairfield Inn & Suites by Marriott Atlanta Vinings	6,206,520
Residence Inn by Marriott Macon	3,710,420
Residence Inn by Marriott Savannah Midtown	5,262,050
Courtyard by Marriott Athens Downtown	6,004,134

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

Hampton Inn Columbus-Airport	1,703,143
Embassy Suites by Hilton Orlando - International Drive Jamaican Court	14,032,132
Residence Inn by Marriott Tampa North I-75 Fletcher	6,408,907
Courtyard by Marriott Orlando Altamonte Springs Maitland	8,905,007
Courtyard by Marriott Sarasota Bradenton Airport	5,936,671
Residence Inn by Marriott Sarasota Bradenton	6,948,604
Courtyard by Marriott Jacksonville Airport Northeast	3,467,113
Hampton Inn Palm Beach Gardens	14,167,057
Hampton Inn Boca Raton-Deerfield Beach	9,107,394
Hampton Inn & Suites Boynton Beach	19,496,568
Hampton Inn Boca Raton	9,714,553
Courtyard by Marriott Gainesville	8,365,310
Residence Inn by Marriott Tampa Sabal Park Brandon	8,095,461
Holiday Inn Express & Suites Kendall East	6,611,293
Hyatt Place Tampa Airport Westshore	11,738,418
Hyatt Place Miami Airport-West Doral	12,682,889
Homewood Suites by Hilton Hartford Windsor Locks	7,758,150
Hampton Inn Colorado Springs Central Air Force Academy	2,068,103
Residence Inn by Marriott Los Angeles LAX El Segundo	24,728,758
SpringHill Suites by Marriott San Diego Rancho Bernardo Scripps Poway	14,167,057
Residence Inn by Marriott San Diego Rancho Bernardo Scripps Poway	16,821,306
Homewood Suites by Hilton Phoenix-Biltmore	11,603,494
Residence Inn by Marriott Mobile	4,506,694
Courtyard by Marriott Mobile	3,575,495
Hyatt Place Birmingham Hoover	6,543,831
Hampton Inn Birmingham Mountain Brook	5,869,209
Residence Inn by Marriott Tallahassee North I-10 Capital Circle	6,948,604
Courtyard by Marriott Tallahassee North I-10 Capital Circle	7,285,915
Residence Inn by Marriott Ft Myers	5,801,747
Hampton Inn West Palm Beach Florida Turnpike	11,873,343

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643 

EXHIBIT C

Original Mezzanine Loan Allocated Loan Amounts

Individual Property Name	Allocated Loan Amount
Hampton Inn Morgantown		1 ,160,037
Hampton Inn Beckley		1,419,747
Hyatt Place Richmond Innsbrook		683,903
Hampton Inn Norfolk-Naval Base		328,966
Fairfield Inn & Suites by Marriott Dallas Medical Market Center		827,382
Courtyard by Marriott Dallas Medical Market Center		1,601,544
SpringHill Suites by Marriott Austin Round Rock		744,502
Hilton Garden Inn Austin Round Rock		1,082,124
SpringHill Suites by Marriott San Antonio Medical Center Northwest		502,106
SpringHill Suites by Marriott Houston Hobby Airport		1,004,212
Hampton Inn Dallas-Addison		857,043
Homewood Suites by Hilton San Antonio-Northwest		1,255,264
Hampton Inn & Suites Nashville Franklin Cool Springs		1,791,998
Courtyard by Marriott Knoxville Cedar Bluff		969,584
Residence Inn by Marriott Chattanooga Downtown		952,270
Residence Inn by Marriott Knoxville Cedar Bluff		891,671
Hyatt Place Nashville Franklin Cool Springs		1,298,549
Hyatt Place Memphis Wolfchase Galleria		891,671
Homewood Suites by Hilton Memphis-Germantown		657,932
Hampton Inn Memphis-Poplar		1,108,095
Hampton Inn Pickwick Dam at Shiloh Falls		181,797
Hampton Inn Chattanooga Airport I-75		383,178
Hampton Inn Columbia I-26 Airport		467,478
Hampton Inn Charleston-Airport Coliseum		320,025
Holiday Inn Charleston Mount Pleasant		917,642
Hampton Inn Scranton at Montage Mountain		986,898
Hampton Inn State College		1,004,212
Residence Inn by Marriott Portland Downtown Lloyd Center		2,813,524
Hyatt Place Columbus Worthington		744,502
Hyatt Place Cincinnati Blue Ash		588,676
Hampton Inn Columbus Dublin		978,241
Hampton Inn Cleveland-Westlake		1,073,467

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

Hampton Inn Albany-Wolf Road (Airport)	1,437,061
Hyatt Place Las Vegas	1,584,230
Hyatt Place Albuquerque Uptown	1,298,549
Courtyard by Marriott Asheville	1,108,095
Hampton Inn Fayetteville I-95	452,718
Hampton Inn Charlotte-Gastonia	883,014
Hampton Inn St. Louis Westport	666,589
Hampton Inn Kansas City-Airport	813,758
Hyatt Place Minneapolis Airport-South	1,056,153
SpringHill Suites by Marriott Grand Rapids North	934,956
Hampton Inn Grand Rapids-North	1,038,839
Hampton Inn Detroit Madison Heights South Troy	1,056,153
Hampton Inn Detroit Northville	779,130
Hyatt Place Baltimore BWI Airport	865,700
Hampton Inn Baltimore Glen Burnie	233,739
Homewood Suites by Hilton Boston-Peabody	796,444
Hampton Inn Boston Peabody	1,168,694
Hyatt Place Baton Rouge I-10	986,898
Residence Inn by Marriott Lexington South Hamburg Place	1,056,153
SpringHill Suites by Marriott Lexington Near the University of Kentucky	1,237,950
Courtyard by Marriott Louisville Downtown	2,337,389
Courtyard by Marriott Lexington South Hamburg Place	1,211,979
Courtyard by Marriott Bowling Green Convention Center	995,555
Hyatt Place Kansas City Overland Park Metcalf	701,217
Hampton Inn Kansas City Overland Park	320,025
Hyatt Place Indianapolis Keystone	995,555
Courtyard by Marriott Chicago Elmhurst Oakbrook Area	934,956
Homewood Suites by Hilton Chicago Downtown	5,746,968
Hampton Inn Chicago Gurnee	995,555
Residence Inn by Marriott Boise Downtown	753,159
Fairfield Inn & Suites by Marriott Atlanta Vinings	796,444
Residence Inn by Marriott Macon	476,135
Residence Inn by Marriott Savannah Midtown	675,246
Courtyard by Marriott Athens Downtown	770,473
Hampton Inn Columbus-Airport	218,554

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

Embassy Suites by Hilton Orlando - International Drive Jamaican Court	1,800,655
Residence Inn by Marriott Tampa North I-75 Fletcher	822,415
Courtyard by Marriott Orlando Altamonte Springs Maitland	1,142,723
Courtyard by Marriott Sarasota Bradenton Airport	761,816
Residence Inn by Marriott Sarasota Bradenton	891,671
Courtyard by Marriott Jacksonville Airport Northeast	444,913
Hampton Inn Palm Beach Gardens	1,817,969
Hampton Inn Boca Raton-Deerfield Beach	1,168,694
Hampton Inn & Suites Boynton Beach	2,501,872
Hampton Inn Boca Raton	1,246,607
Courtyard by Marriott Gainesville	1,073,467
Residence Inn by Marriott Tampa Sabal Park Brandon	1,038,839
Holiday Inn Express & Suites Kendall East	848,386
Hyatt Place Tampa Airport Westshore	1,506,317
Hyatt Place Miami Airport-West Doral	1,627,515
Homewood Suites by Hilton Hartford Windsor Locks	995,555
Hampton Inn Colorado Springs Central Air Force Academy	265,387
Residence Inn by Marriott Los Angeles LAX El Segundo	3,173,286
SpringHill Suites by Marriott San Diego Rancho Bernardo Scripps Poway	1,817,969
Residence Inn by Marriott San Diego Rancho Bernardo Scripps Poway	2,158,572
Homewood Suites by Hilton Phoenix-Biltmore	1,489,003
Residence Inn by Marriott Mobile	578,316
Courtyard by Marriott Mobile	458,821
Hyatt Place Birmingham Hoover	839,729
Hampton Inn Birmingham Mountain Brook	753,159
Residence Inn by Marriott Tallahassee North I-10 Capital Circle	891,671
Courtyard by Marriott Tallahassee North I-10 Capital Circle	934,956
Residence Inn by Marriott Ft Myers	744,502
Hampton Inn West Palm Beach Florida Turnpike	1,523,621

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

EXHIBIT D

Required Repairs

NONE.

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

EXHIBIT E

Organizational Chart of New Borrower

(see attached)

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

EXHIBIT F

Intellectual Property/Websites

Borrower	Asset Name	Domain Name	Hosting Expiration Date	Domain Expiration Date	Account Holder
ARC Hospitality Portfolio I Owner, LLC	Homewood Suites Chicago	www.homewoodsuiteschicago.com	4/10/2016	4/10/2016	First Hospitality
ARC Hospitality Portfolio I Owner, LLC	Embassy Suites Orlando	www.orlandoembassysuites.com		9/30/2016	Hilton
ARC Hospitality Portfolio I Owner, LLC	Hampton Inn Charleston	www.hamptoninncharlestonairport.com		4/19/2015	Hilton
ARC Hospitality Portfolio I NTC Owner, LP	Residence Inn San Diego	www.residenceinnhotelsandiego.com	Month-to-Month	2/10/2015	Huntington
ARC Hospitality Portfolio I NTC Owner, LP	SpringHill Suites San Diego	www.springhillsandiegohotel.com	Month-to-Month	2/10/2015	Huntington
ARC Hospitality Portfolio I NTC Owner, LP	Fairfield Inn & Suites Dallas	www.fairfieldinndallashotel.com	Month-to-Month	1/4/2015	Huntington
ARC Hospitality Portfolio I DLGL Owner, LP	Courtyard Dallas	www.courtyarddallashotel.com	Month-to-Month	1/4/2015	Huntington
ARC Hospitality Portfolio I Owner, LLC	Holiday Inn Charleston Mt. Pleasant	www.himtpleasant.com	12/31/2015	4/30/2017	Pillar

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

EXHIBIT G

Rent Roll

(see attached)

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

EXHIBIT H

Franchise Agreements

(see attached)

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

EXHIBIT I

Property Accounts and Property Account Banks

Property Name	Bank	Name on Account	Account Number	Management Company
Hyatt Place Indianapolis/Keystone	PNC Bank, N.A.	ARC Hospitality Portfolio I TRS, LLC dba Hyatt Place Indianapolis/Keystone FBO Berkadia	4123876799	Crestline Hotels and Resorts, LLC
Courtyard Lexington South/Hamburg Place	JPMorgan Chase Bank, N.A.	ARC Hospitality Portfolio I MISC TRS, LLC dba Courtyard Lexington South/ Hamburg Place  FBO Berkadia	687005863	Musselman Hotels Management, L.L.C.
Courtyard Louisville Downtown	JPMorgan Chase Bank, N.A.	ARC Hospitality Portfolio I MISC TRS, LLC dba  Courtyard Louisville Downtown  FBO Berkadia	687008180	Musselman Hotels Management, L.L.C.
Residence Inn Lexington South/Hamburg Place	JPMorgan Chase Bank, N.A.	ARC Hospitality Portfolio I MISC TRS, LLC dba Residence Inn Lexington South/ Hamburg Place  FBO Berkadia	687006788	Musselman Hotels Management, L.L.C.
SpringHill Suites Lexington Near the University of Kentucky	JPMorgan Chase Bank, N.A.	ARC Hospitality Portfolio I MISC TRS, LLC dba  Springhill Suites Lexington Near the University of Kentucky   FBO Berkadia	687007505	Musselman Hotels Management, L.L.C.
Homewood Suites by Hilton Hartford/Windsor Locks	Bank of America, N.A.	ARC Hospitality Portfolio I TRS Holdco, LLC (HIL) Homewood Suites Hartford	1291859235	Homewood Suites Management LLC
Hampton Inn Detroit/Madison Heights/South Troy	Bank of America, N.A.	ARC Hospitality Portfolio I TRS Holdco, LLC (HIL) Hampton Inn Detroit/Madison Heights	1291063571	Hampton Inns Management LLC

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

Hampton Inn Detroit/Northville	JPMorgan Chase Bank, N.A.	ARC Hospitality Portfolio I TRS Holdco, LLC (HIL) Hampton Inn Detroit/Northville	689055015	Hampton Inns Management LLC
Hampton Inn St. Louis/Westport	Bank of America, N.A.	ARC Hospitality Portfolio I TRS Holdco, LLC (HIL) Hampton Inn St. Louis/Westport	1291063576	Hampton Inns Management LLC
Hampton Inn Albany-Wolf Road (Airport)	Bank of America, N.A.	ARC Hospitality Portfolio I TRS Holdco, LLC (HIL) Hampton Inn Albany	1291063590	Hampton Inns Management LLC
Hampton Inn Cleveland/Westlake	JPMorgan Chase Bank, N.A.	ARC Hospitality Portfolio I TRS Holdco, LLC (HIL) Hampton Inn Cleveland/Westlake	689053986	Hampton Inns Management LLC
Hampton Inn Columbus/Dublin	JPMorgan Chase Bank, N.A.	ARC Hospitality Portfolio I TRS Holdco, LLC (HIL) Hampton Inn Columbus/Dublin	689053978	Hampton Inns Management LLC
Hampton Inn State College	PNC Bank, N.A.	ARC Hospitality Portfolio I TRS Holdco, LLC (HIL) Hampton Inn State College	5303575111	Hampton Inns Management LLC
Hampton Inn Chattanooga-Airport/I-75	Bank of America, N.A.	ARC Hospitality Portfolio I TRS Holdco, LLC (HIL) Hampton Inn Chattanooga	1291859230	Hampton Inns Management LLC
Hampton Inn Pickwick Dam - at Shiloh Falls	Hardin County Bank	ARC Hospitality Portfolio I TRS Holdco, LLC (HIL) Hampton Inn Pickwick	50009540	Hampton Inns Management LLC
Hampton Inn Beckley	JPMorgan Chase Bank, N.A.	ARC Hospitality Portfolio I TRS Holdco, LLC (HIL) Hampton Inn Beckley	689055007	Hampton Inns Management LLC
Hampton Inn Morgantown	PNC Bank, N.A.	ARC Hospitality Portfolio I TRS Holdco, LLC (HIL) Hampton Inn Morgantown	5303575103	Hampton Inns Management LLC
Courtyard Knoxville Cedar Bluff	SunTrust Bank, N.A.	ARC Hospitality Portfolio I TRS Holdco LLC dba Courtyard	1000176350899	Mckibbon Hotel Management, Inc

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

		Knoxville
Residence Inn Knoxville Cedar Bluff	SunTrust Bank, N.A.	ARC Hospitality Portfolio I TRS Holdco LLC dba Residence Inn Knoxville	1000176350881	Mckibbon Hotel Management, Inc
Courtyard Bowling Green Convention Center	Branch Banking and Trust Company	ARC Hospitality Portfolio I TRS, LLC dba Courtyard Bowling Green Convention Center FBO Berkadia	4123876815	Crestline Hotels and Resorts, LLC
Hyatt Place Indianapolis/Keystone	PNC Bank, N.A.	ARC Hospitality Portfolio I TRS, LLC dba Hyatt Place Indianapolis/Keystone FBO Berkadia	4123876799	Crestline Hotels and Resorts, LLC

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

EXHIBIT J

Closing Date Managers

(see attached)

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

EXHIBIT K

Expiring Franchise Properties

(see attached)

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

EXHIBIT L

Scheduled PIP

NONE.

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

EXHIBIT M

PIP Work Other Than Scheduled PIP

(see attached)

Assumption Agreement

Berkadia Loan No. 01-0085683 & 01-0086643

EX-10.25

Exhibit 10.25

SUPPLEMENTAL AGREEMENT

This Supplemental Agreement (this “Agreement”), is made and entered into as of the 27th day of February, 2015, by and among each of the purchasers listed on Schedule 2 attached hereto (collectively, “Purchaser”), American Realty Capital Hospitality Operating Partnership, L.P., a Delaware limited partnership (“ARC OP”), American Realty Capital Hospitality Trust, Inc., a Maryland corporation (“ARC REIT”), Nicholas S. Schorsch, an individual (“NSS”), William M. Kahane, an individual (“WMK”), Edward M. Weil, Jr., an individual (“MW”), and Peter M. Budko, an individual (“PMB”, and together with NSS, WMK and MW, the “Individual Indemnitors”, and the Individual Indemnitors, together with ARC OP and ARC REIT, the “ARC Indemnitors”), Whitehall Street Global Real Estate Limited Partnership 2007, a Delaware limited partnership (“Whitehall Street”), Whitehall Parallel Global Real Estate Limited Partnership 2007, a Delaware limited partnership (“Whitehall Parallel”, and together with Whitehall Street, “Whitehall”), and each of the seller parties (“Sellers”) listed on Schedule 1 to that certain Amended and Restated Real Estate Sale Agreement, dated as of November 11, 0214, by and between Sellers and Purchaser (as amended, modified or supplemented from time to time, the “Sale Agreement”). Any capitalized term used but not defined herein shall have the meaning ascribed thereto in the Sale Agreement.

WITNESETH:

WHEREAS, Purchaser and Sellers previously entered into the Sale Agreement;

WHEREAS, the Sale Agreement requires Purchaser to, and cause the ARC Indemnitors to, enter into this Agreement on the Closing Date for the benefit of Whitehall and Sellers;

WHEREAS, each of the ARC Indemnitors have a direct or indirect interest in Purchaser and/or otherwise a material financial relationship with Purchaser such that they will receive substantial economic and other benefits from the consummation of the transactions described in the Sale Agreement and the compliance by Purchaser with the Sale Agreement;

WHEREAS, in connection with Purchaser’s consummation of the Debt Assumption, Whitehall is required to provide certain indemnification agreements and/or guarantees in connection with the Assumed Debt as described in Section 2.4.2 of the Sale Agreement (any such indemnification agreements and guarantees, as amended, modified, supplemented or reaffirmed from time to time, the “Whitehall Guarantees”); and

NOW, THEREFORE, in consideration of the mutual agreements hereinafter contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby covenant and agree as follows:

1.          Guaranty Reimbursement.

(a)          If, at any time, Whitehall is called upon to satisfy any obligation under any of the Whitehall Guarantees (each, a “Claim”), or Whitehall makes a payment in connection with any of the Whitehall Guarantees (each, a “Payment”), then, in each case,

within three (3) Business Days after the ARC Indemnitors receive notice of the Claim or Payment by Whitehall, as applicable, the ARC Indemnitors shall, in the case of a Claim, satisfy in full the amount of the Claim and, in the case of a Payment, reimburse Whitehall in cash for the full amount of such Payment (together with interest thereon at a per annum rate equal to fifteen percent (15%) from the date upon which Whitehall has first made the Payment in question through the date of reimbursement to Whitehall in full). The ARC Indemnitors shall be jointly and severally liable for all such reimbursement obligations. The term “Payment” shall include, without limitation, all attorneys’ fees and disbursements, court costs and experts’ and consultants’ fees and disbursements incurred in connection with any of the Whitehall Guarantees or in enforcing any rights hereunder. For the avoidance of doubt, no ARC Indemnitor shall have any obligation to satisfy any Claim or make any reimbursement in respect of a Payment hereunder to the extent that both such Claim or Payment arises under the Whitehall Guarantees and (i) such Whitehall Guarantees are continuations of the Guaranty and Environmental Indemnity under the Assumed Debt prior to Closing and such Claim or Payment arises from the actions of Whitehall or its affiliates occurring prior to the Closing or (ii) such Claim or Payment arises from the actions of Whitehall or its affiliates (it being agreed that none of Purchaser Holdco or its subsidiaries shall be deemed an affiliate of Whitehall unless a Change of Control (as defined below) has occurred).

(b)          The reimbursement obligations of each ARC Indemnitor hereunder are absolute, irrevocable and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of the obligation giving rise to the Claim or Payment or any agreement or instrument relating thereto, or any substitution, release or exchange of any other guarantee of or security for any obligation, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor; it being the intent of the parties hereto that such obligations shall be absolute and unconditional under any and all circumstances. With respect to its obligations hereunder, each ARC Indemnitor hereby expressly waives diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that any other party exhaust any right, power or remedy or proceed against any person or entity.

(c)          The obligations of the ARC Indemnitors hereunder shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of such ARC Indemnitor in respect of any obligation hereunder is rescinded or must be otherwise restored by the person receiving such payment, whether as a result of any proceedings in bankruptcy or reorganization or otherwise.

(d)          To the extent that any of the foregoing payment or reimbursement obligations is unenforceable by virtue of any law, public policy or common law doctrine, the party that would have had the obligation to make a payment or reimbursement with respect thereto agrees to contribute the maximum portion that it is permitted to contribute under applicable law to the payment and satisfaction of its liability under such payment and reimbursement obligations.

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(e)          Each of the provisions of this Section 1 shall survive the termination of, or release of Whitehall under, any of the Whitehall Guarantees.

2.          Preferred Guarantees. On the date hereof, each of the Individual Indemnitors shall join and deliver to Sellers, as contemplated in Section 4.3.8 of the Sale Agreement, (a) the Bad Boy Guaranty (in the form attached to the Sale Agreement as Exhibit E-2) (the “Bad Boy Guaranty”), (b) the Mandatory Redemption Guaranty (in the form attached to the Sale Agreement as Exhibit E-3) and (c) the Environmental Indemnity Agreement (in the form attached to the Sale Agreement as Exhibit E-4), the failure of which shall constitute a material default of Purchaser under the Sale Agreement.

3.          Monthly Payment to Whitehall.

(a)          So long as the Whitehall Guarantees remain in effect, if at any time ARC OP or ARC REIT, either individually or in the aggregate, satisfy the net worth and liquidity requirements for a Replacement Guarantor under the Loan Agreement, Purchaser and the ARC Indemnitors shall use their diligent efforts to have ARC OP and/or ARC REIT serve as the sole Guarantor under the Assumed Debt and to have Whitehall released from its obligations under the Whitehall Guarantees in accordance with Section 7.2 of the Loan Agreement (but without limitation of any of the payment obligations described under Section 1 hereof).

(b)          In the event that Whitehall has not been released from each of the Whitehall Guarantees in accordance with Section 7.2 of the Loan Agreement by the date that is eighteen (18) months after the Closing Date, ARC OP and ARC REIT, on a joint and several basis, shall pay to Whitehall the sum of Eight Million and No/100ths Dollars ($8,000,000.00) per annum, payable monthly in equal installments in arrears in cash on the first (1^st) business day of each month, until such time that Whitehall has been released from each of the Whitehall Guarantees in accordance with Section 7.2 of the Loan Agreement (it being understood that such amounts shall be in addition to any amounts payable under Section 1 hereof, whether before or after the date of such release). Notwithstanding the foregoing, in the event that both a Changeover Notice (as defined in the Purchaser Holdco Operating Agreement) has been delivered in accordance with the Purchaser Holdco Operating Agreement and a Qualified Preferred Equity Vehicle Change of Control (as such term is defined in the Loan Agreement) has occurred in accordance with the Loan Agreement (the occurrence of both of the foregoing, a “Change of Control”), ARC OP and ARC REIT shall have no further obligation to make the payments under this Section 3(b) that would have accrued from and after the effective date of such Qualified Preferred Equity Vehicle Change of Control (it being agreed that this sentence shall not apply with respect to amounts that have accrued prior to the effective date of such Qualified Preferred Equity Vehicle Change of Control).

4.          Bankruptcy, etc.

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(a)          In the event that any entity becomes subject to any proceeding or petition under Title 11 of the United States Code entitled “Bankruptcy”, as amended from time to time, or any successor statute or statutes or any rules and regulations promulgated thereunder, or any other federal or state bankruptcy or insolvency law, or comparable foreign laws relating to bankruptcy, insolvency or creditors’ rights (such laws, statutes and rules, collectively, “Bankruptcy Laws” and any such proceeding or petition thereunder, a “Bankruptcy Proceeding”), such that Whitehall may have liability or loss under any of the Whitehall Guarantees (each such entity subject to any such Bankruptcy Proceeding, a “Subject Debtor”), each ARC Indemnitor shall pay over to Whitehall (within three (3) Business Days of the receipt thereof) the full amount of any benefits received by any such ARC Indemnitor or its controlled affiliates by virtue of such Bankruptcy Proceeding (including, without limitation, any distributions received in respect of a plan of reorganization or so-called “363” or comparable sale, any fees or any other payments from or relating to any of the Real Property or any direct or indirect interest therein). In addition, each of the ARC Indemnitors agrees that none of them or their respective controlled affiliates shall (i) directly or indirectly participate in or otherwise provide or originate any so-called “debtor-in-possession financing” to any Subject Debtor, (ii) directly or indirectly cause or permit any Subject Debtor to solicit or accept any such “debtor-in-possession financing” from any ARC Indemnitor or any controlled affiliate thereof, (iii) accept any direct or indirect stock or other equity interest (including any participations, warrants or options) in or any notes, bonds, debentures or other any financial instruments issued by or on behalf of any Subject Debtor (each, a “Retained Interest”) or any other financial benefit (including fees for services) in respect of any Bankruptcy Proceeding or otherwise participate in any so-called “new value plans” (or any comparable transactions) in connection with any such Bankruptcy Proceeding and (iv) during the pendency of any such Bankruptcy Proceeding, directly or indirectly cause or permit any Subject Debtor to solicit or accept any equity contributions from any ARC Indemnitor or controlled affiliate of any ARC Indemnitor in return for any Retained Interest or other financial benefit (including fees for services). In the event that any of the ARC Indemnitors or controlled affiliates receive any Retained Interest despite their respective obligations set forth clauses (iii) and (iv), it shall immediately sell to Whitehall and the Sellers (to be apportioned between them at the direction of Whitehall and the Sellers) all such Retained Interests for an aggregate purchase price equal to ten dollars ($10.00).

(b)          Each of the ARC Indemnitors agrees that none of them or their respective controlled affiliates shall seek or encourage substantive consolidation under the Bankruptcy Laws in respect of any Subject Debtor.

(c)          Each of the ARC Indemnitors agrees that none of them or their respective controlled affiliates shall contest, oppose or object to any motion made by any of Whitehall, the Sellers or their respective affiliates to obtain relief from the automatic stay or to reinstate the automatic stay under any Bankruptcy Law with respect to any Bankruptcy Proceeding.

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5.          Representations and Warranties. Each of the Purchaser and the ARC Indemnitors represents and warrants, on a joint and several basis, to Whitehall and the Sellers as follows:

(a)          Such party has all necessary power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of such party, enforceable in accordance with its terms and conditions, except as such enforceability may be limited by bankruptcy, insolvency, liquidation, moratorium, reorganization or other similar laws affecting rights of creditors generally and by general principles of equity (regardless of whether considered in a proceeding at law or in equity). Such party is not required to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order to perform its obligations under this Agreement.

(b)          Neither the execution and the delivery of this Agreement, nor the performance of such party’s obligations hereunder, will (i) to the extent such party is an entity, violate any provision of the organizational documents of such party, (ii) violate any statute, regulation, rule, injunction, judgment, order, decree, charge or other restriction of any government, governmental agency, or court to which such party is subject or (iii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require any notice or consent which has not been given or obtained, under any agreement, contract, lease, license, instrument, or other arrangement to which such party is bound or to which such party’s assets are subject.

6.          Enforcement; Amendments; Waivers. No delay on the part of Whitehall or any Seller in the exercise of any right or remedy arising under this Agreement or otherwise with respect to all or any part of any obligation hereunder, shall operate as a waiver thereof, and no single or partial exercise by Whitehall or any Seller of any such right or remedy shall preclude any further exercise thereof. No modification or waiver of any of the provisions of this Agreement shall be binding upon any party hereto, except as expressly set forth in a writing duly signed and delivered by the party against whom such modification or waiver is sought. Failure by Whitehall or any Seller at any time or times hereafter to require strict performance by the ARC Indemnitors or Purchaser of all or part of their respective obligations hereunder shall not waive, affect or diminish any right of any party at any time or times hereafter to demand strict performance thereof. Any determination by a court of competent jurisdiction of the amount of any obligation hereunder shall be conclusive and binding on the parties hereto. Each of Purchaser and the Sellers agree that any default or breach by any of the Purchaser or the ARC Indemnitors of their respective obligations hereunder shall constitute a material default or breach under the Sale Agreement.

7.          Interest; Enforcement Costs. Any amounts not paid hereunder when due shall accrue interest (without duplication of any interest provided for in Section 1(a) hereof) at a per annum rate equal to fifteen percent (15%) from the time such amounts were due until such amounts (together with any accrued and unpaid interest) is paid in full. In the event that

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Purchaser or any ARC Indemnitor shall breach or fail to timely perform any provision of this Agreement, the ARC Indemnitors shall, on a joint and several basis, immediately upon demand by any of Whitehall or the Sellers pay all of Whitehall or the applicable Sellers’ costs and expenses (including court costs and attorneys’ fees) incurred by them in the enforcement hereof or the preservation of their rights hereunder.

8.          Separate Right of Action. A separate right of action hereunder shall arise each time any of Whitehall or any Seller acquires knowledge of any matter which may require payment or action pursuant to this Agreement or of any violation of any of the terms hereof. Separate and successive actions may be brought hereunder to enforce any of the provisions hereof at any time and from time to time. No action hereunder shall preclude any subsequent action, and each party hereby waives and covenants not to assert any defense in the nature of splitting of causes of action or merger of judgments.

9.          Effectiveness; Termination; Release.

(a)          This Agreement shall become effective upon its execution by each of the parties hereto.

(b)          This Agreement shall continue in full force and effect and may not be terminated or otherwise revoked until either all of the obligations hereunder have been discharged or all applicable statutes of limitation with respect thereto have expired, whichever occurs later, or except as expressly set forth in a writing duly signed and delivered by each of the parties hereto.

(c)          At any time prior to the declaration of a Changeover Event (as defined in the Purchaser Holdco Operating Agreement), if Whitehall has been released from the Whitehall Guarantees in accordance with Section 7.2 of the Loan Agreement, the ARC Indemnitors shall be entitled to request the release of any Individual Indemnitor from its obligations hereunder so long as, (i) such Individual Indemnitor does not then owe any amounts to any of Whitehall or the Sellers hereunder and (ii) following such release, the remaining ARC Indemnitors continue(s) to satisfy the Net Worth Threshold and Liquid Assets Threshold requirements set forth in Section 5.2 of the Bad Boy Guaranty (without duplication). In connection with any release of an Individual Indemnitor pursuant to this Section 9, Whitehall shall execute and deliver a release of such Individual Indemnitor from all liability hereunder.

10.         Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of each party hereto and their respective successors, permitted assigns, heirs, estates and legal representatives. None of Purchaser or any ARC Indemnitor shall have the right to assign or transfer its rights or obligations under this Agreement without the prior written consent of Whitehall and the Sellers, and any attempted assignment without such consent shall be null and void. All references to the singular shall be deemed to include the plural where the context so requires. All references to the plural shall be deemed to include the singular where the context so requires.

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11.         Governing Law; Jurisdiction; Waivers.

(a)          This Agreement has been negotiated, executed and delivered and shall be governed by and construed in accordance with the laws of the State of New York from time to time in effect, without giving effect to the State of New York’s principles of conflicts of law. EACH PARTY HERETO AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE TRIED AND LITIGATED IN STATE OR FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK, UNLESS SUCH ACTIONS OR PROCEEDINGS ARE REQUIRED TO BE BROUGHT IN ANOTHER COURT TO OBTAIN SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. TO THE EXTENT PERMITTED BY LAW, EACH PARTY HERETO IRREVOCABLY WAIVES ANY RIGHT ANY PARTY HERETO MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS, TO ASSERT THAT ANY PARTY HERETO IS NOT SUBJECT TO THE JURISDICTION OF THE AFORESAID COURTS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 11. SERVICE OF PROCESS, SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST ANY PARTY HERETO, MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ANY SUCH PARTY'S ADDRESS INDICATED IN SECTION 12 HEREOF.

(b)          THE PARTIES HERETO HEREBY EXPRESSLY AND UNCONDITIONALLY WAIVE, IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE OTHER PARTY HERETO UNDER THIS AGREEMENT OR IN CONNECTION WITH ANY TRANSACTION CONTEMPLATED HEREBY, ANY AND EVERY RIGHT EITHER OF THEM MAY HAVE TO (A) INJUNCTIVE RELIEF, (B) A TRIAL BY JURY, (C) INTERPOSE ANY COUNTERCLAIM THEREIN (EXCEPT FOR ANY COMPULSORY COUNTERCLAIM WHICH, IF NOT ASSERTED IN SUCH SUIT, ACTION OR PROCEEDING, WOULD BE WAIVED), AND (D) HAVE THE SAME CONSOLIDATED WITH ANY OTHER OR SEPARATE SUIT, ACTION OR PROCEEDING.

12.         Notices. Any notice, report, demand or other instrument authorized or required to be given or furnished pursuant to this Agreement shall be in writing and shall be given in accordance with the procedures for delivering notice under the Sale Agreement and given (i) in the case of Whitehall or Sellers, to the notice parties set forth for the Sellers in the Sale Agreement, or (ii) in the case of the ARC Indemnitors or Purchaser, to the addresses set forth on Schedule 1 attached hereto.

13.         Severability. Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under such law, such provision

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shall be ineffective to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Agreement.

14.         Further Assurances. At any time, and from time to time after the date hereof, each of Purchaser and the ARC Indemnitors shall, without further consideration and at its own cost and expense, execute and deliver such additional agreements, instruments documents or certificates and take such further action as shall reasonably be requested by Whitehall or any Seller in order to carry out the provisions of this Agreement.

15.         Entire Agreement. This Agreement embodies the entire agreement and understanding between the parties hereto relating to the subject matter hereof and supercedes all prior agreements and understandings to the extent that it relates to such subject matter, and it is agreed that there are no terms, understandings, representations, or warranties, express or implied, other than those set forth herein; provided, however, that the foregoing does not affect in any manner the Sale Agreement, which such agreement shall continue to be enforceable in accordance with its terms.

16.         No Third Party Beneficiary. This Agreement is for the purpose of defining the respective rights and obligations of the parties hereto and is not for the benefit of any creditor or other third party.

17.         Counterparts. This Agreement may be executed in multiple counterparts, each of which shall constitute a duplicate original, but all of which together shall constitute one and the same instrument.

18.         Consultation. Each of the parties hereto represents and warrants that it has consulted with its advisors and counsel with respect to its obligations under this Agreement and the adequacy of the consideration that it has received with respect thereto, and that such consideration is in all respects adequate and the value thereof is not less than the value of its obligations under this Agreement.

[Signatures on Following Pages]

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IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Agreement on the date first above written.

PURCHASER:
American Realty Capital Hospitality Portfolio Member, LLC, a Delaware limited liability company
By:	American Realty Capital Hospitality
	Operating Partnership, L.P., its sole member
	By:	American Realty Capital Hospitality Trust, Inc.,
		its general partner
		By:
		Name:	Jonathan Mehlman
		Title:	CEO and President

ARC Hospitality Portfolio I Owner, LLC, a Delaware
limited liability company
By:
	Name:	Jonathan Mehlman
	Title:	CEO and President
ARC Hospitality Portfolio I TFGL Owner, LLC, a
Delaware limited liability company
By:
	Name:	Jonathan Mehlman
	Title:	CEO and President
ARC Hospitality Portfolio I BHGL Owner, LLC, a
Delaware limited liability company
By:
	Name:	Jonathan Mehlman
	Title:	CEO and President
ARC Hospitality Portfolio I PXGL Owner, LLC, a
Delaware limited liability company
By:
	Name:	Jonathan Mehlman
	Title:	CEO and President

[Signatures continue on next page]

ARC Hospitality Portfolio I GBGL Owner, LLC, a
Delaware limited liability company
By:
	Name:	Jonathan Mehlman
	Title:	CEO and President
ARC Hospitality Portfolio I NFGL Owner, LLC, a
Delaware limited liability company
By:
	Name:	Jonathan Mehlman
	Title:	CEO and President
ARC Hospitality Portfolio I MBGL 1000 Owner, LLC, a Delaware limited liability company
By:
	Name:	Jonathan Mehlman
	Title:	CEO and President
ARC Hospitality Portfolio I MBGL 950 Owner, LLC, a
Delaware limited liability company
By:
	Name:	Jonathan Mehlman
	Title:	CEO and President
ARC Hospitality Portfolio I NTC Owner, LP, a Delaware limited partnership
By: ARC Hospitality Portfolio I NTC Owner GP,
LLC, its general partner
By:
	Name:	Jonathan Mehlman
	Title:	CEO and President

[Signatures continue on next page]

ARC Hospitality Portfolio I DLGL Owner, LP, a Delaware limited partnership
By: ARC Hospitality Portfolio I NTC Owner GP,
LLC, its general partner
By:
	Name:	Jonathan Mehlman
	Title:	CEO and President
ARC Hospitality Portfolio I SAGL Owner, LP, a Delaware limited partnership
By: ARC Hospitality Portfolio I NTC Owner GP,
LLC, its general partner
By:
	Name:	Jonathan Mehlman
	Title:	CEO and President
ARC Hospitality Portfolio II Owner, LLC, a Delaware
limited liability company
By:
	Name:	Jonathan Mehlman
	Title:	CEO and President
ARC Hospitality Portfolio II NTC Owner, LP, a Delaware limited partnership
By: ARC Hospitality Portfolio II NTC Owner GP,
LLC, its general partner
By:
	Name:	Jonathan Mehlman
	Title:	CEO and President

[Signatures continue on next page]

	ARC INDEMNITORS:
	AMERICAN REALTY CAPITAL HOSPITALITY OPERATING PARTNERSHIP, L.P.
	By:	American Realty Capital Hospitality Trust, Inc., its general partner
	By:
		Name:	Jonathan Mehlman
		Title:	CEO and President
	American Realty Capital Hospitality Trust, Inc.
By:
	Name:	Jonathan Mehlman
	Title:	CEO and President

[Signatures continue on next page]

NICHOLAS S. SCHORCSH

Name: Nicholas S. Schorsch

[Signatures continue on next page]

WILLIAM M. KAHANE

Name: William M. Kahane

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EDWARD M. WEIL, JR.

Name: Edward M. Weil, Jr.

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PETER M. BUDKO

Name: Peter M. Budko

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WHITEHALL:

Whitehall Street Global Real Estate Limited Partnership 2007,
a Delaware limited partnership
By:	WH Advisors, L.L.C. 2007,
	a Delaware limited liability company
	Its: General Partner
	By:
		Name:
		Title:

Whitehall PARALLEL Global REAL ESTATE LIMITED PARTNERSHIP 2007, a Delaware limited partnership
By:	WH Parallel Advisors, L.L.C. 2007,
	a Delaware limited liability company
	Its: General Partner
	By:
		Name:
		Title:

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SELLERS:
W2007 EQUITY INNS REALTY, LLC, a Delaware limited liability company
By:	WNT Mezz I, LLC, a Delaware limited liability company, its Managing Member
By:
	Name:
	Title:

W2007 EQUITY INNS REALTY, L.P., a Delaware limited partnership
By:	W2007 Equity Inns Realty Gen-Par, LLC, a Delaware limited liability company, its General Partner
By:
	Name:
	Title:

W2007 EQI DALTON PARTNERSHIP, L.P., a Tennessee limited partnership
By:	W2007 EQI Financing Corporation VI, a Tennessee corporation, its General Partner
By:
	Name:
	Title:

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W2007 EQI HOUSTON PARTNERSHIP, L.P., a Tennessee limited partnership
By:	W2007 EQI FL Corporation, a Tennessee corporation, its General Partner
By:
	Name:
	Title:

W2007 EQI CARLSBAD PARTNERSHIP, L.P., a Tennessee limited partnership
By:	W2007 EQI Carlsbad Corporation, a Tennessee corporation, its General Partner
By:
	Name:
	Title:

W2007 EQI HI AUSTIN PARTNERSHIP, L.P., a Tennessee limited partnership
By:	W2007 EQI HI Austin Corporation, a Tennessee corporation, its General Partner
By:
	Name:
	Title:

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W2007 EQI NAPERVILLE PARTNERSHIP, L.P., a Tennessee limited partnership
By:	W2007 EQI Naperville Corporation, a Tennessee corporation, its General Partner
By:
	Name:
	Title:

W2007 EQI COLLEGE STATION PARTNERSHIP, L.P., a Tennessee limited partnership
By:	W2007 EQI College Station Corporation, a Tennessee corporation, its General Partner
By:
	Name:
	Title:

W2007 EQI EAST LANSING PARTNERSHIP, L.P., a Tennessee limited partnership
By:	W2007 EQI FL Corporation, a Tennessee corporation, its General Partner
By:
	Name:
	Title:

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W2007 EQI INDIANAPOLIS PARTNERSHIP, L.P., a Tennessee limited partnership
By:	W2007 EQI Indianapolis Corporation, a Tennessee corporation, its General Partner
By:
	Name:
	Title:

W2007 EQI KNOXVILLE PARTNERSHIP, L.P., a Tennessee limited partnership
By:	W2007 EQI Knoxville Corporation, a Tennessee corporation, its General Partner
By:
	Name:
	Title:

W2007 EQI MILFORD CORPORATION, a Tennessee corporation
By:	W2007 EQI Milford Corporation, a Tennessee corporation, its General Partner
By:
	Name:
	Title:

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W2007 EQI ORLANDO 2 PARTNERSHIP, L.P., a Tennessee limited partnership
By:	W2007 EQI FL Corporation, a Tennessee corporation, its General Partner
By:
	Name:
	Title:

W2007 EQI URBANA PARTNERSHIP, L.P., a Tennessee limited partnership
By:	W2007 EQI FL Corporation, a Tennessee corporation, its General Partner
By:
	Name:
	Title:

W2007 EQI RIO RANCHO PARTNERSHIP, L.P., a Tennessee limited partnership
By:	W2007 EQI FL Corporation, a Tennessee corporation, its General Partner
By:
	Name:
	Title:

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W2007 EQI LOUISVILLE PARTNERSHIP, L.P., a Tennessee limited partnership
By:	W2007 EQI Financing Corporation VI, a Tennessee corporation, its General Partner
By:
	Name:
	Title:

W2007 EQI AUGUSTA PARTNERSHIP, L.P., a Tennessee limited partnership
By:	W2007 EQI FL Corporation, a Tennessee corporation, its General Partner
By:
	Name:
	Title:

W2007 EQI ORLANDO PARTNERSHIP, L.P., a Tennessee limited partnership
By:	W2007 EQI Orlando Corporation, a Tennessee corporation, its General Partner
By:
	Name:
	Title:

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W2007 EQI SEATTLE PARTNERSHIP, L.P., a Tennessee limited partnership
By:	W2007 EQI FL Corporation, a Tennessee corporation, its General Partner
By:
	Name:
	Title:

W2007 EQI JACKSONVILLE PARTNERSHIP I, L.P., a Tennessee limited partnership
By:	W2007 EQI Financing Corporation VI, a Tennessee corporation, its General Partner
By:
	Name:
	Title:

W2007 EQI ASHEVILLE PARTNERSHIP, L.P., a Tennessee limited partnership
By:	W2007 EQI Financing Corporation VI, a Tennessee corporation, its General Partner
By:
	Name:
	Title:

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W2007 EQI SAVANNAH 2 PARTNERSHIP, L.P., a Tennessee limited partnership
By:	W2007 EQI FL Corporation, a Tennessee corporation, its General Partner
By:
	Name:
	Title:

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Schedule 1

Notice Addresses

If to Whitehall
or Sellers:	c/o Goldman Sachs Realty Management, L.P.
	6011 Connection Drive
	Irving, Texas 75039
	Attn: Greg Fay
	Facsimile No.: (972) 368-3699
	Telephone No.: (972) 368-2743
with copies to:	Whitehall Street Global Real Estate Limited Partnership 2007
	c/o Goldman, Sachs & Co.
	200 West Street
	New York, New York 10282
	Attn: Chief Financial Officer
	Facsimile No.: (212) 357-5505
	Telephone No.: (212) 902-5520
and:	Sullivan & Cromwell LLP
	125 Broad Street
	New York, New York 10004
	Attention: Anthony J. Colletta, Esq.
	Facsimile No. (212) 291-9029
If to Purchaser or
ARC Indemnitors:	c/o American Realty Capital
	405 Park Avenue
	New York, New York 10022
	Attn: Jon Mehlman
	Facsimile No.: (212) 421-5799
	Telephone No.: (646) 626-8857
with a copy to:	c/o American Realty Capital
	405 Park Avenue
	New York, New York 10022
	Attn: Michael Ead
	Facsimile No.: (212) 421-5799
	Telephone No.: (646) 381-0604

Schedule 2

Purchaser

ARC Hospitality Portfolio I Owner, LLC, a Delaware limited liability company

ARC Hospitality Portfolio I BHGL Owner, LLC, a Delaware limited liability company

ARC Hospitality Portfolio I PXGL Owner, LLC, a Delaware limited liability company

ARC Hospitality Portfolio I GBGL Owner, LLC, a Delaware limited liability company

ARC Hospitality Portfolio I NFGL Owner, LLC, a Delaware limited liability company

ARC Hospitality Portfolio I MBGL 1000 Owner, LLC, a Delaware limited liability company

ARC Hospitality Portfolio I MBGL 950 Owner, LLC, a Delaware limited liability company

ARC Hospitality Portfolio I NTC Owner, LP, a Delaware limited partnership

ARC Hospitality Portfolio I DLGL Owner, LP, a Delaware limited partnership

ARC Hospitality Portfolio I SAGL Owner, LP, a Delaware limited partnership

EX-10.26

Exhibit 10.26

Berkadia Loan No. 01-0085683 & 01-0086643

payment GUARANTY Agreement

(PIP Reserve Funds)

This PAYMENT GUARANTY AGREEMENT (the “Agreement”), dated as of February 27, 2015 is made by American Realty Capital Hospitality Trust, Inc., a Maryland corporation (“Guarantor”), to and for the benefit of U.S. Bank National Association, as Trustee for the Registered Holders of EQTY 2014-INNS Mortgage Trust, Commercial Mortgage Pass-Through Certificates (“Lender”), with a mailing address at c/o Berkadia Commercial Mortgage LLC, 323 Norristown Road, Suite 300, Ambler, Pennsylvania 19002 (“Berkadia”).

RECITALS

A.           Pursuant to a certain Assumption and Release Agreement dated as of the date hereof (the “Assumption Agreement”), Lender is prepared to consent to the assumption (the “Assumption”) of a loan by ARC Hospitality Portfolio I Owner, LLC, a Delaware limited liability company, ARC Hospitality Portfolio I BHGL Owner, LLC, a Delaware limited liability company, ARC Hospitality Portfolio I PXGL Owner, LLC, a Delaware limited liability company, ARC Hospitality Portfolio I GBGL Owner, LLC, a Delaware limited liability company, ARC Hospitality Portfolio I NFGL Owner, LLC, a Delaware limited liability company, ARC Hospitality Portfolio I MBGL 1000 Owner, LLC, a Delaware limited liability company, ARC Hospitality Portfolio I MBGL 950 Owner, LLC, a Delaware limited liability company, ARC Hospitality Portfolio I NTC Owner, LP, a Delaware limited partnership, ARC Hospitality Portfolio I DLGL Owner, LP, a Delaware limited partnership, and ARC Hospitality Portfolio I SAGL Owner, LP, a Delaware limited partnership (collectively, the “Borrowers”), from W2007 Equity Inns Realty, LLC, a Delaware limited liability company, and W2007 Equity Inns Realty, L.P., a Delaware limited partnership (collectively, the “Original Borrower”), in the original principal amount of $865,000,000.00, which loan is evidenced by that certain (i) Promissory Note A-1, dated April 11, 2014 (together with all addenda, modifications, amendments, riders, exhibits and supplements thereto, the “A-1 Note”), from Original Borrower in the original principal amount of $519,000,000.00 (the “A-1 Loan”), and (ii) Promissory Note A-2, dated April 11, 2014 (together with all addenda, modifications, amendments, riders, exhibits and supplements thereto, the “A-2 Note” and together with the A-1 Note, the “Note”), from Original Borrower in the original principal amount of $346,000,000.00 (the “A-2 Loan” and together with the A-1 Loan, the “Loan”), each in favor of German American Capital Corporation, a Maryland corporation (“Original Lender”). The Loan is evidenced by that certain Loan Agreement, dated as of April 11, 2014, as amended by that certain First Amendment to Loan Agreement, dated as of June 18, 2014 (as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, the “Loan Agreement”), and secured by the Mortgage (as defined in the Loan Agreement) encumbering the Properties. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Loan Agreement, as amended by the Assumption Agreement.

B.           Original Lender transferred all of its rights, title and interest in the Loan to Lender pursuant to certain assignment documents, and Lender is the current holder of all of Original Lender’s interest in the Loan.

C.           As a condition to consenting to the Assumption of the Loan by Borrowers and pursuant to the terms of the Loan Agreement, Borrowers are required to deposit with Lender a sum sufficient for the payment and performance of certain Approved Future PIP Expenses and PIP Work (each term as defined in the Loan Agreement) to be incurred by Borrowers in the 24-month period immediately following the date hereof for the properties identified on the Future PIP Budget (as defined below) (the aggregate deposits made for such purpose as the same shall be subject to adjustment as provided in Section 1(b) below, the “Future PIP Reserve Account Deposit”).

D.           As of the date hereof, Borrower anticipates the total Future PIP Reserve Account Deposit to be $102,496,000.00, as reflected on the budget attached hereto and by this reference incorporated herein as Schedule I (as the same may be amended, restated or replaced from time to time, the “Future PIP Budget”). The Future PIP Budget also constitutes an Approved Flagging Budget for the purposes of the Loan Agreement.

E.           Concurrently, with the closing of the Assumption, Borrowers shall deposit an amount equal to $8,000,000.00 into the Future PIP Reserve Account (as defined in the Loan Agreement), which amount constitutes a portion of the Future PIP Reserve Account Deposit (the “Initial Future PIP Reserve Account Deposit”).

F.           Borrowers intend to make additional cash deposits into the Future PIP Reserve Account in accordance with the payment schedule attached hereto and by this reference incorporated herein as Schedule II, each of which shall constitute a portion of the Future PIP Reserve Account Deposit (each such deposit being referred to hereinafter as an “Additional Future PIP Reserve Account Deposit”).

G.           Guarantor has agreed to guarantee an amount equal to the difference of (i) the Future PIP Reserve Account Deposit less (ii) an amount equal to the sum of (x) the Initial Future PIP Reserve Account Deposit in accordance with the terms set forth in this Agreement and (y) to the extent actually received by Lender, any Additional Future PIP Reserve Account Deposits (the “Guaranteed Future PIP Reserve Account Deposit”).

H.           Lender agrees in accordance with the terms set for in this Agreement that the Guaranteed Obligations shall be automatically reduced by an amount equal to any Available FF&E Credit (as defined in the Loan Agreement) to be used for costs identified on the Future PIP Budget.

I.           As a condition to consenting to the Assumption of the Loan by Borrowers, Lender requires that Guarantor execute this Agreement to guarantee the Guaranteed Obligations as more particularly set forth herein.

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Guarantor is an owner of a direct or indirect interest in the Borrowers, and Guarantor will directly benefit from Lender’s consent to the Assumption of the Loan by Borrowers.

AGREEMENT

NOW, THEREFORE, to induce Lender to consent to the Assumption of the Loan by Borrowers and in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor hereby covenants and agrees for the benefit of Lender, as follows:

1.           Nature and Scope of Guaranteed Obligations.

(a)          Guarantor hereby irrevocably and unconditionally guarantees to Lender the payment of the Guaranteed Obligations (as defined below) as and when the same shall be due and payable. Guarantor hereby irrevocably and unconditionally covenants and agrees that it is liable for the Guaranteed Obligations as a primary obligor.

(b)          As used herein, the term “Guaranteed Obligations” means the payment of all amounts constituting the Guaranteed Future PIP Reserve Account Deposit from time to time. The Guaranteed Obligations shall be reduced by an amount equal to any Available FF&E Credit to be used for costs identified on the Future PIP Budget.

Notwithstanding anything to the contrary contained herein, Guarantor hereby acknowledges and agrees that the Future PIP Reserve Account Deposit as of the date hereof is anticipated to be equal to approximately $102,496,000.00, and that such amount may increase or decrease as Approved Future PIP Expenses are finalized and PIP Work is completed for the properties identified on the Future PIP Budget. Guarantor further acknowledges and agrees that the Guaranteed Future PIP Reserve Account Deposit shall be adjusted to account for any increase or decrease in the Future PIP Reserve Account Deposit for the properties identified on the Future PIP Budget, and changes resulting from the finalization of Approved Future PIP Expenses and PIP Work anticipated with respect to the property located at 250 Johnny Dodds Boulevard, Mount Pleasant, SC 29464, commonly known as the Holiday Inn Charleston Mt. Pleasant (the “Holiday Inn Charleston PIP”), which expenses and costs shall be finalized within ninety (90) days of the date hereof. Guarantor further acknowledges and agrees that Guarantor shall deliver, or shall cause to be delivered, to Lender a revised budget reflecting any changes in the Approved Future PIP Expenses and PIP Work for which the Future PIP Reserve Account Deposit is required, including, but not limited to, a revised budget to account for the Holiday Inn Charleston PIP. Guarantor hereby acknowledges and agrees that Lender’s consent to the delivery of this Agreement as security for a portion of the Future PIP Reserve Account Deposit shall not be deemed to be Lender’s consent or agreement to accept a payment guaranty for any other Reserve Funds (as defined in the Loan Agreement) required to be deposited on or after the date hereof by Borrowers, or any other party, with Lender or Deposit Bank (as defined in the Loan Agreement) under the terms of the Loan Agreement or any of the other Loan Documents.

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(c)          This Agreement is an irrevocable, absolute, continuing guaranty of payment not a guaranty of collection. This Agreement may not be revoked by Guarantor and shall continue to be effective with respect to any Guaranteed Obligations arising or created after any attempted revocation by Guarantor.

(d)          Upon the earlier of (x) the occurrence and continuation of an Event of Default, (y) Borrowers’ failure to make Additional Future PIP Reserve Account Deposits as set forth on Schedule II, or (z) Borrower’s failure to pay, or cause to be paid, any Approved Future PIP Expenses or costs for any PIP Work identified on the Future PIP Budget, Guarantor shall, immediately upon demand by Lender, pay the amount due on the Guaranteed Obligations to Lender at Lender’s address as set forth herein or as otherwise instructed by Lender.

(e)          Lender shall not be required (and Guarantor hereby waives any rights to require Lender), in order to enforce the obligations of Guarantor hereunder, first (i) to institute suit or otherwise exhaust its remedies against Borrowers or any other Persons (as defined in the Loan Agreement) liable on the Loan or the Guaranteed Obligations, if any, or against any other Person, (ii) to enforce Lender’s rights against any collateral given to secure the Loan, (iii) to enforce Lender’s rights against any other guarantors of the Guaranteed Obligations, if any, (iv) to join any of the Borrowers or any other Persons liable on the Guaranteed Obligations, if any, in any action seeking to enforce this Agreement, (v) to exhaust any available remedies against any collateral given to secure the Loan, or (vi) to resort to any other means of obtaining payment of the Guaranteed Obligations.

2.          Release of Guaranteed Obligations. Guarantor shall be released from the Guaranteed Obligations and all other obligations under this Agreement upon the earlier to occur of the following: (i) Borrower has deposited or caused to be deposited into the Future PIP Reserve Account, including, without limitation, through the Initial Future PIP Reserve Account Deposit and any Additional Future PIP Reserve Account Deposits, amounts equal to the full amount of the Future PIP Reserve Account Deposit, acknowledging that the aggregate amount of such funds may not then be held in the Future PIP Reserve Account as the result of (a) such portions of the Future PIP Reserve Account Deposit and any Additional Future PIP Reserve Account Deposits that may have been deposited into the Future PIP Reserve Account and have been disbursed from such account in accordance with the terms and conditions set forth in Section 6.6 of the Loan Agreement, and (b) the application of any Available FF&E Credit towards the cost of the PIP Work and Approved Future PIP Expenses for which the Future PIP Reserve Account Deposit is required, (ii) Borrower has completed all PIP Work and paid all Approved Future PIP Expenses for which the Future PIP Reserve Account Deposit is required in accordance with the Loan Documents and the applicable Franchise Agreements, or (iii) the payment of the Loan in full. Upon the satisfaction of any condition above, upon the receipt by Lender of a request from Borrower, Lender shall confirm in writing the release of Guarantor from the Guaranteed Obligations and all other obligations under this Agreement.

3.          Indemnity. Guarantor agrees to indemnify and hold Lender harmless from any and all actual loss, cost, liability or expense in any way suffered, incurred or paid by Lender as a result of, or in any way arising from, Borrowers’ failure to perform the Guaranteed Obligations,

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including all actual out of pocket costs and expenses of collection (including reasonable attorney’s fees and disbursements) incurred by Lender to enforce this Agreement.

4.          Reinstatement of Obligations. If at any time all or any part of any payment made by Guarantor or received by Lender from Guarantor under or with respect to this Agreement is or must be rescinded or returned for any reason whatsoever (including, but not limited to, the insolvency, bankruptcy or reorganization of Guarantor or any of the Borrowers), then the obligations of Guarantor hereunder shall, to the extent of the payment rescinded or returned, be deemed to have continued in existence, notwithstanding such previous payment made by Guarantor, or receipt of payment by Lender, and the obligations of Guarantor hereunder shall continue to be effective or be reinstated, as the case may be, as to such payment, all as though such previous payment by Guarantor which was rescinded or returned had never been made.

5.          Waivers by Guarantor. To the extent permitted by law, Guarantor hereby waives and agrees not to assert or take advantage of:

(a)          Any right to require Lender to proceed against Borrowers or any other person or to proceed against or exhaust any security held by Lender at any time or to pursue any other remedy in Lender’s power or under any other agreement before proceeding against Guarantor hereunder;

(b)          Any defense that may arise by reason of the incapacity, lack of authority, death or disability of any other person or persons or the failure of Lender to file or enforce a claim against the estate (in administration, bankruptcy or any other proceeding) of any other person or persons;

(c)          Demand, presentment for payment, notice of nonpayment, protest, notice of protest and all other notices of any kind, or the lack of any thereof, including, without limiting the generality of the foregoing, notice of the existence, creation or incurring of any new or additional indebtedness or obligation or of any action or non-action on the part of Borrowers, Lender, any endorser or creditor of any of the Borrowers or of Guarantor or on the part of any other person whomsoever under this or any other instrument in connection with any obligation or evidence of indebtedness held by Lender;

(d)          Any defense based upon an election of remedies by Lender;

(e)          Any right or claim of right to cause a marshalling of the assets of Guarantor;

(f)          Any principle or provision of law, statutory or otherwise, which is or might be in conflict with the terms and provisions of this Agreement;

(g)          Any duty on the part of Lender to disclose to Guarantor any facts Lender may now or hereafter know about Borrowers or the Properties, regardless of whether Lender has reason to believe that any such facts materially increase the risk beyond that which Guarantor intends to assume or has reason to believe that such facts are unknown to Guarantor or has a reasonable opportunity to communicate such facts to Guarantor, it being understood and agreed that Guarantor is fully responsible for being and keeping informed of the financial condition of

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Borrowers, of the condition of the Properties and of any and all circumstances bearing on the risk that liability may be incurred by any Guarantor hereunder;

(h)          Any lack of notice of disposition or of manner of disposition of any collateral for the Loan;

(i)          Any invalidity, irregularity or unenforceability, in whole or in part, of any one or more of the Loan Documents;

(j)          Any lack of commercial reasonableness in dealing with the collateral for the Loan;

(k)          Any deficiencies in the collateral for the Loan or any deficiency in the ability of Lender to collect or to obtain performance from any persons or entities now or hereafter liable for the payment and performance of any obligation hereby guaranteed or indemnified against;

(l)          An assertion or claim that the automatic stay provided by 11 U.S.C. §362 (arising upon the voluntary or involuntary bankruptcy proceeding of any of the Borrowers) or any other stay provided under any other debtor relief law (whether statutory, common law, case law or otherwise) of any jurisdiction whatsoever, now or hereafter in effect, which may be or become applicable, shall operate or be interpreted to stay, interdict, condition, reduce or inhibit the ability of Lender to enforce any of its rights, whether now or hereafter required, which Lender may have against Guarantor or the collateral for the Loan;

(m)          Any modifications of the Loan Documents or any obligation of Borrowers relating to the Loan by operation of law or by action of any court, whether pursuant to the Bankruptcy Reform Act of 1978, as amended, or any other debtor relief law (whether statutory, common law, case law or otherwise) of any jurisdiction whatsoever, now or hereafter in effect, or otherwise; and

(n)          Any action, occurrence, event or matter consented to by Guarantor under Section 6(g) hereof, under any other provision hereof, or otherwise.

6.          General Provisions.

(a)          Recourse. All of the terms and provisions of this Agreement are recourse obligations of Guarantor.

(b)          Unsecured Obligations. Guarantor hereby acknowledges that Lender would not consent to the Assumption of the Loan by Borrowers but for the unsecured personal liability undertaken byGuarantor herein. Guarantor further hereby acknowledges that the obligations of Guarantor under this Agreement are not secured by the lien of the Mortgage or the other Loan Documents, it being the intent of Lender to create separate obligations of Guarantor hereunder which can be enforced against Guarantor without regard to the existence of the Mortgage or the other Loan Documents or the liens or security interests created therein.

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(c)          Survival. This Agreement shall be deemed to be continuing in nature and shall remain in full force and effect and shall survive the exercise of any remedy by Lender under the Mortgage, the Loan Agreement or any of the other Loan Documents, including, without limitation, any foreclosure or deed in lieu thereof.

(d)          No Subrogation; No Recourse Against Lender. Any indebtedness of any of the Borrowers to Guarantor now or hereafter existing (including, but not limited to, any rights to subrogation Guarantor may have as a result of any payment by Guarantor under this Agreement), together with any interest thereon, shall be, and such indebtedness is, hereby, deferred, postponed and subordinated to the prior payment in full of the Loan. Further, no Guarantor shall have any right of recourse against Lender by reason of any action Lender may take or omit to take under the provisions of this Agreement or under the provisions of any of the Loan Documents.

(e)          Financial Statements. Guarantor shall deliver to Lender:

(a)          within 120 days after the end of each fiscal year of Guarantor, a complete copy of Guarantor’s annual financial statements in the form delivered to guarantor’s limited partners, together with a certificate of the general partner of Guarantor certifying that such annual financial statements are true, correct, accurate and complete and fairly present the financial condition and results of the operations of Guarantor;

(b)          within 90 days after the end of each fiscal quarter of Guarantor, financial statements in the form delivered to Guarantor’s limited partners, together with a certificate of the general partner of Guarantor certifying that, to the best of signer’s knowledge, such quarterly financial statements fairly present the financial condition and results of the operations of Guarantor in a manner consistent with GAAP (subject to year-end adjustments); and

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

(f)          Rights Cumulative; Payments. Lender’s rights under this Agreement shall be in addition to all rights of Lender under the Note, the Mortgage, the Loan Agreement and the other Loan Documents. Further, payments made by Guarantor under this Agreement (or any other indemnitor under separate agreement) shall not reduce in any respect Borrowers’ obligations and liabilities under the Note, the Mortgage, the Loan Agreement and the other Loan Documents.

(g)          Continuing Nature of Guaranty. Guarantor hereby consents and agrees that Lender may at any time and from time to time without further consent from Guarantor do any of the following events, and the liability of Guarantor under this Agreement shall be unconditional and absolute and shall in no way be impaired or limited by any of the following events, whether occurring with or without notice to Guarantor or with or without consideration: (i) any extensions of time for performance required by any of the Loan Documents or extension or renewal of the Note; (ii) any sale, assignment or foreclosure of the Note, the Mortgage, the Loan Agreement or any of the other Loan Documents or any sale or transfer of the Properties; (iii) any change in the composition of Borrowers, including, without limitation, the withdrawal or

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7

removal of Guarantor from any current or future position of ownership, management or control of Borrowers; (iv) the accuracy or inaccuracy of the representations and warranties made by Guarantor herein or by Borrowers in any of the Loan Documents; (v) the release of Borrowers or of any other person or entity from performance or observance of any of the agreements, covenants, terms or conditions contained in any of the Loan Documents by operation of law, Lender’s voluntary act or otherwise; (vi) the release or substitution in whole or in part of any security for the Loan; (vii) Lender’s failure to record the Mortgage, mortgage assignments, Assumption Agreement or to file any financing statement (or Lender’s improper recording or filing thereof) or to otherwise perfect, protect, secure or insure any lien or security interest given as security for the Loan; (viii) the modification of the terms of any one or more of the Loan Documents; or (ix) with respect to Lender the taking or failure to take any action of any type whatsoever. No such action which Lender shall take or fail to take in connection with the Loan Documents or any collateral for the Loan, nor any course of dealing with Borrowers or any other person, shall limit, impair or release Guarantor’s obligations hereunder, affect this Agreement in any way or afford Guarantor any recourse against Lender. Nothing contained in this Section shall be construed to require Lender to take or refrain from taking any action referred to herein. Notwithstanding anything to the contrary contained herein, Lender shall exercise good faith and fair dealing with respect to the Properties, the Loan Documents and the Guarantor.

(h)          Entire Agreement; Amendment; Severability. This Agreement contains the entire agreement between the parties respecting the matters herein set forth and supersedes all prior agreements, whether written or oral, between the parties respecting such matters. Any amendments or modifications hereto, in order to be effective, shall be in writing and executed by the parties hereto. A determination that any provision of this Agreement is unenforceable or invalid shall not affect the enforceability or validity of any other provision, and any determination that the application of any provision of this Agreement to any person or circumstance is illegal or unenforceable shall not affect the enforceability or validity of such provision as it may apply to any other persons or circumstances.

Section 1.2           (i)          Governing Law; Jurisdiction; Service of Process. (a) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY GUARANTOR AND ACCEPTED BY LENDER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTE WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION RELATED HERETO, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, GUARANTOR HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION

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GOVERNS THIS AGREEMENT AND/OR THE OTHER LOAN DOCUMENTS, AND THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

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

GUARANTOR DOES HEREBY DESIGNATE AND APPOINT:

Corporation Service Company

1180 Avenue of the Americas, Suite 210

New York, NY 10036-8401

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND GUARANTOR AGREES THAT SERVICE OF PROCESS UPON SUCH RESPECTIVE AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO GUARANTOR IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON GUARANTOR IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. GUARANTOR (I) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS AND WHICH SUBSTITUTE AGENT SHALL BE THE SAME AGENT DESIGNATED BY BORROWERS UNDER THE LOAN AGREEMENT), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF LENDER TO SERVE PROCESS IN ANY OTHER MANNER

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PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST GUARANTOR IN ANY OTHER JURISDICTION.

(j)          Notices. All notices, demands, requests or other communications to be sent by one party to another hereunder or required by law shall be given and become effective as provided in the Assumption Agreement, provided that the address of Guarantor shall be as follows:

	American Realty Capital Hospitality Trust, Inc. c/o American Realty Capital 405 Park Avenue New York, New York 10022 Facsimile No.: (212) 421-5799
and with a copy to:	Goodwin Procter LLP 53 State Street Boston, MA 02109 Attn: Samuel L. Richardson, Esq. Facsimile No.: (617) 523-1231

(k)          No Waiver; Time of Essence; Business Day. The failure of any party hereto to enforce any right or remedy hereunder, or to promptly enforce any such right or remedy, shall not constitute a waiver thereof nor give rise to any estoppel against such party nor excuse any of the parties hereto from their respective obligations hereunder. Any waiver of such right or remedy must be in writing and signed by the party to be bound. This Agreement is subject to enforcement at law or in equity, including actions for damages or specific performance. Time is of the essence hereof. The term “business day” as used herein shall mean a weekday, Monday through Friday, except a legal holiday or a day on which banking institutions in New York, New York are authorized by law to be closed.

(l)          Captions for Convenience. The captions and headings of the sections and paragraphs of this Agreement are for convenience of reference only and shall not be construed in interpreting the provisions hereof.

(m)          Attorneys’ Fees. In the event it is necessary for Lender to retain the services of an attorney or any other consultants in order to enforce this Agreement, or any portion thereof, Guarantor agrees to pay to Lender any and all reasonable out of pocket costs and expenses, including, without limitation, attorneys’ fees, incurred by Lender as a result thereof.

(n)          Reliance. Lender would not consent to the Assumption of the Loan by Borrowers without this Agreement. Accordingly, Guarantor intentionally and unconditionally enters into the covenants and agreements as set forth above and understands that, in reliance upon and in consideration of such covenants and agreements, Lender has consented to the Assumption of the

Payment Guaranty

Berkadia Loan No. 01-0085683 & 01-0086643

10

Loan and, as part and parcel thereof, specific monetary and other obligations have been, are being and shall be entered into which would not be made or entered into but for such reliance.

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

(p)          Exculpation of Certain Persons. Notwithstanding anything to the contrary contained in this Guaranty or any other Loan Document, no direct or indirect shareholder, partner, member, principal, Affiliate (other than any Borrower), employee, officer, trustee, director, agent or other representative of a Guarantor and/or of any of its Affiliates (each, a “Related Party”) shall have any personal liability for, nor be joined as party to, any action with respect to payment, performance or discharge of any covenants, obligations, or undertakings of any Guarantor under this Guaranty, and by acceptance hereof, Lender for itself and its successors and assigns irrevocably waives any and all right to sue for, seek or demand any such damages, money judgment, deficiency judgment or personal judgment against any Related Party under or by reason of or in connection with this Guaranty; except that any Related Party that is a party to any Loan Document or any other separate written guaranty, indemnity or other agreement given by such Related Party in connection with the Loan shall remain fully liable therefor and the foregoing provisions shall not operate to limit or impair the liabilities and obligations of such Related Parties or the rights and remedies of the Lender thereunder.

[Signatures on Following Page.]

Payment Guaranty

Berkadia Loan No. 01-0085683 & 01-0086643

11

IN WITNESS WHEREOF, the undersigned has caused this instrument to be duly executed as of the date first written above.

GUARANTOR:

American Realty Capital

Hospitality Trust, Inc., a Maryland

corporation

By:

Name:

Title:

Payment Guaranty

Berkadia Loan No. 01-0085683 & 01-0086643

Schedule I

Future PIP Budget

(see attached)

Payment Guaranty

Berkadia Loan No. 01-0085683 & 01-0086643

Schedule II

Additional Future PIP Reserve Account Deposits

1.          An amount equal to $4,000,000.00 on April 30, 2015.

2.          An amount equal to $12,500,000.00 on June 30, 2015.

3.          An amount equal to $25,000,000.00 on December 31, 2015.

4.          An amount equal to $2,000,000.00 on the last day of each calendar month in the 2016 calendar year.

Payment Guaranty

Berkadia Loan No. 01-0085683 & 01-0086643

EX-10.27

Exhibit 10.27

EXECUTION VERSION

LOAN AGREEMENT

Dated as of February 27, 2015

between

The Borrowers listed on Schedule II attached hereto
individually and collectively, as Borrower(s)

and

LADDER CAPITAL FINANCE LLC

and

DEUTSCHE BANK AG, NEW YORK BRANCH,

individually and collectively, as Lender

EQUITY INNS HOTEL PORTFOLIO

$227,000,000

Table of Contents

		Page
Article 1:	DEFINITIONS; PRINCIPLES OF CONSTRUCTION	1
Section 1.1	Definitions	1
Section 1.2	Principles of Construction	1
Article 2:	THE LOAN	1
Section 2.1	The Loan	1
2.1.1	Agreement to Lend and Borrow	1
2.1.2	The Note	2
2.1.3	Use of Proceeds	2
2.1.4	Origination and Processing Fees	2
Section 2.2	Interest Rate	2
2.2.1	LIBOR Interest Rate	2
2.2.2	Default Rate	2
2.2.3	Interest Calculation	2
2.2.4	Usury Savings	3
Section 2.3	Loan Payments; Term of Loan	3
2.3.1	Loan Payments Generally	3
2.3.2	Payment on Maturity Date	4
2.3.3	Late Payment Charge	4
2.3.4	Method and Place of Payment	4
Section 2.4	Prepayments	4
2.4.1	Voluntary Prepayments	4
2.4.2	Mandatory Prepayments	5
2.4.3	Prepayments After Default	5
2.4.4	Funding Losses; Changes in Law; Etc	5
Section 2.5	Intentionally Omitted	8
Section 2.6	Loan Taxes	8
Section 2.7	Extension of the Maturity Date	9
2.7.1	Extension Option	9
2.7.2	Maturity Date	11
Section 2.8	Interest Rate Protection Agreements	11
2.8.1	Interest Rate Protection Agreement	11
2.8.2	Execution of Documents	13

i

Table of Contents

(continued)

		Page
2.8.3	No Obligation of Lender	13
2.8.4	Receipts from Interest Rate Protection Agreements	13
2.8.5	Downgrade of Counterparty	13
Section 2.9	Additional Interest	13
Section 2.10	REMIC Test on Property Release	14
Article 3:	REPRESENTATIONS AND WARRANTIES	15
Section 3.1	Borrower Representations	15
3.1.1	Organization	15
3.1.2	Proceedings	15
3.1.3	No Conflicts	16
3.1.4	Litigation	16
3.1.5	Agreements	16
3.1.6	Consents	16
3.1.7	Title	16
3.1.8	No Plan Assets	17
3.1.9	Compliance	17
3.1.10	Financial Information	18
3.1.11	Condemnation	18
3.1.12	Easements; Utilities and Public Access	18
3.1.13	Separate Lots	18
3.1.14	Taxes and Assessments	18
3.1.15	Enforceability	18
3.1.16	Assignment of Leases	19
3.1.17	Insurance	19
3.1.18	Licenses	19
3.1.19	Flood Zone	19
3.1.20	Physical Condition	19
3.1.21	Boundaries	19
3.1.22	Leases	20
3.1.23	Filing and Recording Taxes	20
3.1.24	Single Purpose	20
3.1.25	Tax Filings	20

ii

Table of Contents

(continued)

		Page
3.1.26	Solvency	20
3.1.27	Federal Reserve Regulations	21
3.1.28	Organizational Chart	21
3.1.29	Organizational Status	21
3.1.30	Bank Holding Company	21
3.1.31	No Casualty	21
3.1.32	Purchase Options	21
3.1.33	FIRPTA	21
3.1.34	Illegal Activity	21
3.1.35	Investment Company Act	21
3.1.36	Use of Property	22
3.1.37	Fiscal Year	22
3.1.38	No Other Financing	22
3.1.39	Contracts	22
3.1.40	Full and Accurate Disclosure; No Change in Facts	22
3.1.41	Other Obligations and Liabilities	23
3.1.42	Operating Lease	23
3.1.43	REA	23
3.1.44	Bankruptcy Filings	23
3.1.45	PIP Plans	24
3.1.46	Intermediate Management Agreement	24
3.1.47	Property Management Agreement	24
3.1.48	Beverage Concession Agreement	24
3.1.49	Beverage Management Agreement	24
3.1.50	Franchise Agreement	24
3.1.51	Personal Property	25
3.1.52	Equipment Leases	25
3.1.53	Collective Bargaining	25
Section 3.2	Survival of Representations; Reliance	25
Article 4:	BORROWER COVENANTS	25
Section 4.1	Borrower Affirmative Covenants	25
4.1.1	Payment and Performance of Obligations	25

iii

Table of Contents

(continued)

		Page
4.1.2	Existence; Compliance with Legal Requirements	25
4.1.3	Taxes and Other Charges	26
4.1.4	Litigation	26
4.1.5	Access to Property	26
4.1.6	Further Assurances; Supplemental Mortgage Affidavits	27
4.1.7	Financial Reporting	27
4.1.8	Title to the Property	30
4.1.9	Estoppel Statement	30
4.1.10	Leases	31
4.1.11	Alterations	31
4.1.12	Approval of Major Contracts	32
4.1.13	After Acquired Property	32
4.1.14	Patriot Act	32
4.1.15	Special Purpose	32
4.1.16	Operating Leases	32
4.1.17	Major Contracts; REA	32
4.1.18	O&M Program	33
4.1.19	PIPs	33
4.1.20	Required Repairs	34
4.1.21	Cure of Violations	34
Section 4.2	Borrower Negative Covenants	34
4.2.1	Due on Sale and Encumbrance; Change of Control; Transfers of Interests	34
4.2.2	Liens	35
4.2.3	Dissolution	35
4.2.4	Change in Use	35
4.2.5	Debt Cancellation	35
4.2.6	Intentionally Omitted	35
4.2.7	Zoning	35
4.2.8	Intentionally Omitted	35
4.2.9	No Joint Assessment	35
4.2.10	Principal Place of Business	36

iv

Table of Contents

(continued)

		Page
4.2.11	Change of Name, Identity or Structure	36
4.2.12	Intentionally Omitted	36
4.2.13	ERISA	36
4.2.14	Compliance with Restrictive Covenants, Etc	37
4.2.15	REAs	37
4.2.16	Embargoed Person	37
4.2.17	Matters Concerning Leases	38
Article 5:	INSURANCE, CASUALTY AND CONDEMNATION	38
Section 5.1	Insurance.	38
5.1.1	Insurance Policies	38
5.1.2	Insurance Company	43
Section 5.2	Casualty and Condemnation	43
5.2.1	Casualty	43
5.2.2	Condemnation	44
5.2.3	Casualty Proceeds	44
Section 5.3	Delivery of Net Proceeds	45
5.3.1	Minor Casualty or Condemnation	45
5.3.2	Major Casualty or Condemnation	45
Article 6:	CASH MANAGEMENT AND RESERVE FUNDS	49
Section 6.1	Cash Management Arrangements	49
Section 6.2	Required Repairs Funds	50
6.2.1	Deposit of Required Repairs Funds	50
6.2.2	Release of Required Repairs Funds	51
Section 6.3	Tax Funds	52
6.3.1	Deposits of Tax Funds	52
6.3.2	Release of Tax Funds	52
Section 6.4	Insurance Funds	52
6.4.1	Deposits of Insurance Funds	52
6.4.2	Release of Insurance Funds	53
6.4.3	Blanket Insurance	53
Section 6.5	FF&E Funds	53
6.5.1	Deposits of FF&E Funds	53

v

Table of Contents

(continued)

		Page
6.5.2	Release of FF&E Funds	54
Section 6.6	PIP Reserve	55
6.6.1	Deposit of PIP Reserve Funds	55
6.6.2	Release of PIP Reserve Funds	55
Section 6.7	Intentionally Omitted	56
Section 6.8	Operating Expenses	56
Section 6.9	Excess Cash Flow Funds	57
Section 6.10	Security Interest in Reserve Funds; Reserve Funds Generally	57
6.10.1	Grant of Security Interest	57
6.10.2	Interest on Certain Reserve Funds; Income Taxes	57
6.10.3	Prohibition Against Further Encumbrance	58
Section 6.11	Property Cash Flow Allocation	58
6.11.1	Order of Priority of Funds in Cash Management Account	58
6.11.2	Failure to Make Payments	60
6.11.3	Application After Event of Default	61
Article 7:	property MANAGEMENT	61
Section 7.1	The Franchise Agreement, Property Management Agreement, Intermediate Management Agreement and Beverage Concession Agreement	61
7.1.1	Franchise Agreement	61
7.1.2	Property Management Agreement; Intermediate Management Agreement	61
7.1.3	Beverage Concession Agreement	63
7.1.4	Defaults	63
Section 7.2	Prohibition Against Termination or Modification of Franchise Agreement, Property Management Agreement, Intermediate Management Agreement and Concession Agreement	64
7.2.1	Franchise Agreement	64
7.2.2	Intermediate Management Agreement; Property Management Agreement	64
7.2.3	Beverage Concession Agreement	65
Section 7.3	Expiration or Termination of Franchise Agreement, Intermediate Management Agreement and Property Management Agreement	65

vi

Table of Contents

(continued)

		Page
7.3.1	Expiration or Franchisor Termination	66
7.3.2	Expiration, or Property Manager or Intermediate Manager Termination	66
7.3.3	Lender’s Right to Require Replacement of Franchise Agreement	66
7.3.4	Lender’s Right to Require Replacement of Property Management Agreement	67
7.3.5	Lender’s Right to Require Replacement of Beverage Concession Agreement	67
7.3.6	Actions Following Event of Default	67
7.3.7	Assignment of Franchise Agreement	67
7.3.8	Assignment of Management Agreement	68
Article 8:	TRANSFERS	68
Section 8.1	[Reserved]	68
Section 8.2	Permitted Transfers of Interest in Restricted Parties	68
Section 8.3	Costs and Expenses	76
Section 8.4	Compliance with other Covenants	76
Article 9:	SALE AND SECURITIZATION OF LOAN	76
Section 9.1	Sale of Loan and Securitization	76
Section 9.2	Securitization Indemnification	80
Section 9.3	Severance Documentation	82
Section 9.4	Cross Collateralization	83
Section 9.5	Secondary Market Transaction Costs	84
Article 10:	DEFAULTS	84
Section 10.1	Events of Default	84
Section 10.2	Remedies	89
Section 10.3	Lender’s Right to Perform	91
Section 10.4	Remedies Cumulative	91
Article 11:	MISCELLANEOUS	91
Section 11.1	Successors and Assigns; Assignments and Participations	91
Section 11.2	Lender’s Discretion	91
Section 11.3	Governing Law	92
Section 11.4	Modification, Waiver in Writing	93
Section 11.5	Delay Not a Waiver	93

vii

Table of Contents

(continued)

		Page
Section 11.6	Notices	93
Section 11.7	Trial by Jury	95
Section 11.8	Headings	95
Section 11.9	Severability	95
Section 11.10	Preferences	95
Section 11.11	Waiver of Notice	95
Section 11.12	Remedies of Borrower	96
Section 11.13	Expenses; Indemnity	96
Section 11.14	Schedules Incorporated	98
Section 11.15	Offsets, Counterclaims and Defenses	98
Section 11.16	No Joint Venture or Partnership; No Third Party Beneficiaries	98
Section 11.17	Publicity	98
Section 11.18	Waiver of Marshalling of Assets	99
Section 11.19	Waiver of Offsets/Defenses/Counterclaims	100
Section 11.20	Conflict; Construction of Documents; Reliance	100
Section 11.21	Brokers and Financial Advisors	100
Section 11.22	Exculpation	101
Section 11.23	Prior Agreements	105
Section 11.24	Administrative Agent	105
Section 11.25	Servicer	106
Section 11.26	Refinancing Loan	107
Section 11.27	Joint and Several Liability	108
Section 11.28	Creation of Security Interest	109
Section 11.29	Counterparts	109
Section 11.30	Set-Off	109
Section 11.31	Certain Additional Rights of Lender (VCOC)	109

viii

SCHEDULES

Schedule I	-	Definitions
Schedule II	-	Borrowers
Schedule III	-	Single Purpose Provisions
Schedule IV	-	Organizational Chart
Schedule V	-	Required Repairs
Schedule VI	-	Secondary Market Transaction Information
Schedule VII	-	Intentionally Omitted
Schedule VIII		Closed Property Release Conditions
Schedule IX		Allocated Loan Amounts
Schedule X		Franchisors and Franchise Agreements
Schedule XI		Property Managers
Schedule XII		REA
Schedule XIII		Operating Leases
Schedule XIV		PIP Reserve Funding Schedule
Schedule XV		Reserved
Schedule XVI		O&M Plans
Schedule XVII		Scheduled Managers
Schedule XVIII		Assignment of Franchise Agreement
Schedule 3.1.11		Condemnation Matters
Schedule 3.1.17		Insurance Claims
Schedule 3.1.31		Casualty

EXHIBITS

Exhibit A - Form of Smith Travel Research Report

ix

TABLE OF CONTENTS (cont.)

Exhibit B	-	Intentionally Omitted
Exhibit C	-	Form of Credit Card Bank Payment Direction Letter
Exhibit D	-	Form of Credit Card Company Payment Direction Letter
Exhibit P-1		PIP Plans
Exhibit P-2		PIP Budgets
Exhibit P-3		PIP Timeline

x

LOAN AGREEMENT

THIS LOAN AGREEMENT, dated as of February 27, 2015 (as amended, restated, replaced, supplemented or otherwise modified from time to time, this “Agreement”), between LADDER CAPITAL FINANCE LLC, a Delaware limited liability company, having an address at 345 Park Avenue, 8th Floor, New York, New York 10154 (“Ladder”) and DEUTSCHE BANK AG, NEW YORK BRANCH, a branch of Deutsche Bank AG, a German Bank, having an address at 60 Wall Street, New York, New York 10005 (“DBNY”; together with their respective successors and assigns, individually or collectively as the context may require, “Lender”) and the Borrowers listed on Schedule II, each having an address at c/o American Realty Capital, 405 Park Avenue, New York, New York 10022 (together with their successors and permitted assigns, individually or collectively as the context may require, “Borrower” or “Borrowers”).

WITNESSETH:

WHEREAS, Borrowers desire to obtain the Loan from Lender; and

WHEREAS, Lender is willing to make the Loan to Borrowers, subject to and in accordance with the terms and conditions of the Loan Documents.

NOW, THEREFORE, in consideration of the covenants set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree, represent and warrant as follows:

Article 1: DEFINITIONS; PRINCIPLES OF CONSTRUCTION

Section 1.1           Definitions. For all purposes of this Agreement, except as otherwise expressly provided herein, all capitalized terms used in this Agreement shall have the respective meanings set forth on Schedule I attached hereto.

Section 1.2           Principles of Construction. All references to sections and schedules are to sections and schedules in or to this Agreement unless otherwise specified. Unless otherwise specified, the words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement and the word “including” shall mean “including but not limited to”. Unless otherwise specified, all meanings attributed to defined terms herein shall be equally applicable to both the singular and plural forms of the terms so defined.

Article 2: THE LOAN

Section 2.1           The Loan.

2.1.1           Agreement to Lend and Borrow. Subject to and upon the terms and conditions set forth herein, Lender shall make the Loan to Borrowers and Borrowers shall accept the Loan from Lender on the Closing Date.

2.1.2           The Note. The Loan shall be evidenced by (a) that certain Promissory Note A-1 of even date herewith in the stated principal amount of One Hundred Thirty Six Million Two Hundred Thousand and No/100 Dollars ($136,200,000.00) executed by Borrowers and payable to the order of Ladder (“Note A-1”), and (b) that certain Promissory Note A-2 of even date herewith in the stated principal amount of Ninety Million Eight Hundred Thousand and No/100 Dollars ($90,800,000.00) executed by Borrowers and payable to the order of DBNY (“Note A-2” and together with Note A-1, individually or collectively as the context may require, as the same may hereafter be amended, supplemented, restated, increased, extended or consolidated from time to time, the “Note”) and shall be repaid in accordance with the terms of this Agreement and the Note.

2.1.3           Use of Proceeds. Borrowers shall use the proceeds of the Loan to (a) acquire the Properties, (b) pay and discharge any existing loans, if any, relating to the Properties, (c) pay all past-due Taxes, Insurance Premiums and Other Charges, if any, in respect of the Properties, (d) make initial deposits of the Reserve Funds, (e) pay costs and expenses incurred in connection with the closing of the Loan, including, without limitation, those fees more particularly described in Section 2.1.4, below, as approved by Lender, and (f) fund any working capital requirements of the Properties, as approved by Lender. Any excess proceeds may be used for any lawful purpose.

2.1.4           Origination. As compensation for Lender’s agreement to make the Loan, Borrowers hereby agree to pay to Lender an origination fee in the amount of $2,270,000.00 (the “Origination Fee”). The Origination Fee is fully earned and non-refundable.

Section 2.2           Interest Rate.

2.2.1           LIBOR Interest Rate. Subject to the further provisions of this Agreement, including, without limitation, Sections 2.2.2 and 2.2.4 hereof, the Outstanding Principal Balance shall bear interest throughout the Term at a rate per annum equal to the greater of (i) a floating rate of interest equal to the Applicable Spread plus LIBOR, and (ii) a fixed rate of interest equal to six and one-quarter percent (6.25%) (in any event, the “LIBOR Interest Rate”).

2.2.2           Default Rate. In the event that, and for so long as, any Event of Default shall have occurred and be continuing, the Outstanding Principal Balance and, to the extent permitted by law, overdue interest in respect of the Loan, shall, at Lender’s election, accrue interest at the Default Rate, calculated from the date the Default occurred which led to such Event of Default, without regard to any grace or cure periods contained herein. Interest at the Default Rate shall be paid immediately upon demand, which demand may be made as frequently as Lender shall elect.

2.2.3           Interest Calculation. Interest on the Outstanding Principal Balance shall be calculated by multiplying (a) the actual number of days elapsed in the period for which the calculation is being made by (b) a daily rate based on a three hundred sixty (360) day year (that is, the LIBOR Interest Rate, the Base Rate, or the Default Rate, as then applicable, expressed as an annual rate divided by 360) by (c) the Outstanding Principal Balance. The

2

accrual period for calculating interest due on each Monthly Payment Date shall be the Interest Period immediately prior to such Monthly Payment Date.

2.2.4           Usury Savings. The Loan Documents are subject to the express condition that at no time shall Borrowers be required to pay interest on the principal balance of the Loan at a rate which could subject Lender to either civil or criminal liability as a result of being in excess of the Maximum Legal Rate. If by the terms of the Loan Documents, Borrowers are at any time required or obligated to pay interest on the principal balance due hereunder at a rate in excess of the Maximum Legal Rate, the LIBOR Interest Rate, the Base Rate or the Default Rate, as the case may be, shall be deemed to be immediately reduced to the Maximum Legal Rate and all previous payments in excess of the Maximum Legal Rate shall be deemed to have been payments in reduction of principal and not on account of the interest due hereunder. All sums paid or agreed to be paid to Lender for the use, forbearance, or detention of the sums due under the Loan, shall, to the extent permitted by any Legal Requirements, be amortized, prorated, allocated and spread throughout the full stated term of the Loan until payment in full so that the rate or amount of interest on account of the Loan does not exceed the Maximum Legal Rate from time to time in effect and applicable to the Loan for so long as the Loan is outstanding.

Section 2.3           Loan Payments; Term of Loan.

2.3.1           Loan Payments Generally.

(a)          Borrower shall make a payment to Lender of interest only on the Closing Date for the period from the Closing Date through and including the next succeeding fifth (5^th) day of a calendar month, whether such fifth (5^th) day shall occur in the calendar month in which the Closing Date occurs or in the month immediately succeeding the month in which the Closing Date occurs (unless the Closing Date is the sixth (6^th) day of a calendar month, in which case no such separate payment of interest shall be due). Each interest accrual period (the “Interest Period”) thereafter shall commence on the sixth (6th) day of each calendar month during the Term and shall end on and include the fifth (5th) day of the next occurring calendar month.

(b)          Commencing on April 6, 2015 and on each Monthly Payment Date throughout the Term, Borrower shall make a payment to Lender monthly in arrears of interest accruing on the Outstanding Principal Balance during each Interest Period (each such payment, a “Monthly Debt Service Payment”), which payments shall be applied to accrued and unpaid interest.

(c)          Lender shall have the right from time to time, in its sole discretion, upon not less than thirty (30) days prior written notice to Borrower, to change the Monthly Payment Date to a different calendar day each month which is not more than five (5) days earlier nor more than ten (10) days later than the sixth (6th) day of each calendar month; provided, however, that if Lender shall have elected to change the Monthly Payment Date as aforesaid, Lender shall have the option, but not the obligation, to adjust the Interest Period correspondingly.

3

2.3.2           Payment on Maturity Date. The Loan shall mature on the Maturity Date. Borrower shall pay to Lender on the Maturity Date the Outstanding Principal Balance, all accrued and unpaid interest, the Minimum Interest Required Payment, if any, the Additional Interest and all other amounts due under the Loan Documents.

2.3.3           Late Payment Charge. If any principal, interest or any other sum due under the Loan Documents, other than the payment of principal due on the Maturity Date, is not paid by Borrower on the date on which it is due, Borrower shall pay to Lender upon demand an amount equal to the lesser of four percent (4%) of such unpaid sum or the maximum amount permitted by any Legal Requirements, in order to defray the expense incurred by Lender in handling and processing such delinquent payment and to compensate Lender for the loss of the use of such delinquent payment. Any such amount shall be secured by the Security Instruments and the other Loan Documents.

2.3.4           Method and Place of Payment.

(a)          Except as otherwise specifically provided herein, all payments and prepayments under this Agreement and the Note shall be made to Lender not later than 1:00 P.M., New York City time, on the date when due and shall be made in lawful money of the United States of America in immediately available funds at Lender’s office or at such other place as Lender shall from time to time designate, and any funds received by Lender after such time shall, for all purposes hereof, be deemed to have been paid on the next succeeding Business Day.

(b)          Whenever any payment to be made under any Loan Document shall be stated to be due on a day which is not a Business Day, the due date thereof shall be the immediately preceding Business Day.

(c)          All payments required to be made by Borrowers under the Loan Documents shall be made irrespective of, and without deduction for, any setoff, claim, counterclaim or otherwise and shall be made irrespective of any defense thereto.

Section 2.4           Prepayments.

2.4.1           Voluntary Prepayments.

(a)          Except as otherwise provided herein, Borrower shall not have the right to prepay the Loan in whole or in part prior to the Stated Maturity Date.

(b)          Borrower may, at its option and upon not less than thirty (30) days prior notice to Lender, prepay the Outstanding Principal Balance in whole or in part, subject to this Section 2.4.1(b). Any prepayment received by Lender under this Section 2.4.1(b) must be accompanied by (i) all interest which would have accrued on the principal amount prepaid through, but not including, the next occurring Monthly Payment Date (or, if such prepayment occurs on a Monthly Payment Date, through, but not including, such Monthly Payment Date), (ii) the Minimum Interest Required Payment (if any), (iii) the Additional Interest, (iv) all other sums due and payable under the Loan Documents, and (v) all reasonable out-of-pocket costs and expenses incurred by Lender in connection with such prepayment. A notice of prepayment may be revoked by Borrower if written notice of such revocation is delivered by Borrower to Lender

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on or before the date that is five (5) Business Days prior to the prepayment date set forth in the notice of prepayment. If Borrower delivers to Lender notice of prepayment and subsequently revokes such notice prior to prepayment, Borrower shall promptly reimburse Lender for all costs and expenses incurred by Lender (including any attorneys’ fees) due to such revoked notice or otherwise in connection with the anticipated prepayment.

2.4.2           Mandatory Prepayments. On the next occurring Monthly Payment Date following the date on which Lender actually receives a distribution of Net Proceeds, if Lender does not make such Net Proceeds available to Borrower for a Restoration, Borrower shall, at Lender’s option, prepay the Outstanding Principal Balance in an amount equal to one hundred percent (100%) of such Net Proceeds; provided, however, if an Event of Default has occurred and is continuing, Lender may apply such Net Proceeds to the Debt in any order, proportion and priority as Lender may determine in its sole and absolute discretion. Any prepayment received by Lender under this Section 2.4.2 shall be (a) subject to Section 2.4.3 hereof and (b) accompanied by (i) all interest which would have accrued on the principal amount prepaid through, but not including, such Monthly Payment Date, (ii) all other sums due and payable under the Loan Documents, including the Additional Interest, and (iii) all reasonable out-of-pocket costs and expenses incurred by Lender in connection with such prepayment. Provided that no Event of Default shall have occurred and be continuing, no Minimum Interest Required Payment shall be due in connection with any prepayment made pursuant to this Section 2.4.2.

2.4.3           Prepayments After Default. If, after the occurrence and during the continuance of an Event of Default, prepayment of all or any part of the Debt is tendered by Borrower (which tender may be rejected by Lender to the extent permitted by applicable Legal Requirements) or otherwise recovered by Lender (including through application of any Reserve Funds), such tender or recovery shall be deemed (a) to have been made on the next occurring Monthly Payment Date and such prepayment shall be applied first to the Monthly Debt Service Payment due on such date and (b) to be a voluntary prepayment by Borrower in violation of the prohibition against prepayment set forth in Section 2.4.1(a) hereof, and Borrower shall pay, in addition to the Debt, or portion thereof then being prepaid or satisfied, (i) the Minimum Interest Required Payment, if any, determined as of the date such prepayment is deemed to have been paid to Lender, (ii) all interest which would have accrued on the principal amount prepaid through, but not including, such Monthly Payment Date, (iii) if such prepayment occurs prior to the final sale of the Loan in a Secondary Market Transaction, Hedge Losses, (iv) all other sums due and payable under the Loan Documents, including the Additional Interest and (v) all reasonable out-of-pocket costs and expenses incurred by Lender in connection with such prepayment.

2.4.4           Funding Losses; Changes in Law; Etc. (a) Borrower hereby agrees to pay to Lender any amount necessary to compensate Lender and any Funding Party for any losses or costs (including, without limitation, the costs of breaking any “LIBOR” contract, if applicable, or funding losses determined on the basis of Lender’s reinvestment rate and the interest rate thereon) (collectively, “Funding Losses”) sustained by any Lender or any Funding Party: (i) if the Loan, or any portion hereof, is repaid for any reason whatsoever on any date other than a Monthly Payment Date (including, without limitation, from condemnation or insurance proceeds); (ii) upon the conversion of the interest rate on the Loan to the Base Rate in

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accordance with Section 2.4.4(b) hereof; (iii) upon demand by Lender accompanied by a certificate of Lender stating that such additional amount is being imposed on similarly situated loans held by Lender, as a consequence of (A) any increased costs that any Lender or any Funding Party may sustain in maintaining the borrowing evidenced hereby, or (B) the reduction of any amounts received or receivable from Borrower, in either case, due to the introduction of, or any change in, any law or any applicable regulation or treaty (including the administration or interpretation thereof), whether or not having the force of law, or due to the compliance by any Lender or the Funding Party, as the case may be, with any directive, whether or not having the force of law, or request from any central bank or domestic or foreign governmental authority, agency or instrumentality having jurisdiction; and/or (iv) upon demand by Lender accompanied by a certificate of Lender stating that such additional amount is being imposed on similarly situated loans held by Lender, any other set of circumstances not attributable to any Lender’s or a Funding Party’s acts. Payment of Funding Losses hereunder shall be in addition to any obligation to pay (X) the Additional Interest, or (Y) the Minimum Interest Required Payment.

(b)          If any Lender determines (which determination shall be conclusive and binding upon Borrower, absent manifest error) (i) that U.S. Dollar deposits in an amount approximately equal to the then Outstanding Principal Balance are not generally available at such time in the London Interbank Market for deposits in Eurodollars, (ii) that the rate at which such deposits are being offered will not adequately and fairly reflect the cost to Lender or a Funding Party of maintaining a LIBOR Interest Rate on the Loan (or the portion of the Loan being funded by such Funding Party), or of funding the same in such market for such Interest Period, due to circumstances affecting the London Interbank Market generally, (iii) that reasonable means do not exist for ascertaining LIBOR, or (iv) that the LIBOR Interest Rate would be in excess of the maximum interest rate which Borrower may by law pay, then, in any such event, Lender shall so notify Borrower and, as of the date of such notification with respect to an event described in clause (ii) or (iv) above, or as of the expiration of the applicable Interest Period with respect to an event described in clause (i) or (iii) above, interest shall accrue at the Base Rate (unless the Default Rate shall be applicable) until such time as the situations described above are no longer in effect, or as otherwise provided herein.

(c)          If the introduction of, or any change in, any law, regulation or treaty, or in the interpretation thereof by any governmental authority charged with the administration or interpretation thereof, shall make it unlawful for any Lender to maintain the LIBOR Interest Rate with respect to the Loan, or any portion thereof, or to fund the Loan, or any portion thereof, in Eurodollars in the London Interbank Market, then, (i) the Loan (or such portion of the Loan) shall thereafter bear interest at the Base Rate (unless the Default Rate shall be applicable), and (ii) Borrower shall pay to Lender the amount of Funding Losses (if any) incurred in connection with such conversion. The accrual of interest at the Base Rate shall continue until such Monthly Payment Date, if any, as the situation described in this Section 2.4.4(c) is no longer in effect.

(d)          If any Lender shall have determined that the applicability of any law, rule, regulation or guideline adopted pursuant to or arising out of the July 1988 report of the Basel Committee on Banking Regulations and Supervisory Practices entitled “International Convergence of Capital Measurement and Capital Standards”, or the adoption of any other law, rule, regulation or guideline (including, but not limited to, any United States law, rule, regulation

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or guideline) regarding capital adequacy, or any change becoming effective in any of the foregoing or in the enforcement or interpretation or administration of any of the foregoing by any court or any domestic or foreign governmental authority, central bank or comparable agency charged with the enforcement or interpretation or administration thereof, or compliance by Lender or its holding company, with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on the capital of Lender, Lender’s holding company, to a level below that which Lender or its holding company could have achieved but for such applicability, adoption, change or compliance (taking into consideration Lender’s or its holding company’s policies with respect to capital adequacy) (the foregoing being hereinafter referred to as “Capital Adequacy Events”), then, upon demand by Lender accompanied by a certificate of Lender stating that such additional amount (prorated as appropriate) is being imposed on similarly situated loans held by Lender and generally on an industry-wide basis, Borrower shall pay to Lender, from time to time, such additional amount or amounts as will compensate Lender for any such reduction suffered.

(e)          Any amount payable by Borrower under Section 2.4.4(a) or Section 2.4.4(d) hereof shall be paid to Lender within five (5) days of receipt by Borrower of a certificate signed by an officer of Lender stating the amount due and the basis for the determination of such amount, which statement shall be conclusive and binding upon Borrower, absent manifest error. Failure on the part of Lender to demand payment from Borrower for any such amount attributable to any particular period shall not constitute a waiver of Lender’s right to demand payment of such amount for any subsequent or prior period. Lender shall use reasonable efforts to deliver to Borrower prompt notice of any event described in Section 2.4.4(a) or 2.4.4(d) and of the amount to be paid under this Section 2.4.4 as a result thereof; provided, however, any failure by Lender to so notify Borrower shall not affect Borrower’s obligation to make the payments to be made under this Section 2.4.4 as a result thereof. All amounts which may become due and payable by Borrower in accordance with the provisions of this Section 2.4.4 shall constitute additional interest hereunder and shall be secured by the Mortgage and the other Loan Documents.

(f)          If any Lender or any Funding Party requests compensation for any losses or costs to be reimbursed pursuant to any one or more of the provisions of Sections 2.4.4(a)(iii) or Section 2.4.4(d) hereof, or if any event occurs as described in Section 2.4.4(b) or 2.4.4(c) hereof which would cause the Note no longer to bear interest at the LIBOR Interest Rate then, upon request of Borrower, Lender or such Funding Party shall use reasonable efforts, in a manner consistent with such institution’s practice in connection with loans similar to the Loan, to designate a different lending office for funding or booking the Loan or to assign its rights and obligations under this Agreement to another of its offices, branches or Affiliates if such designation or assignment, in Lender’s sole but good faith judgment, (i) would eliminate, mitigate or reduce amounts payable by Borrower in connection with Funding Losses or Capital Adequacy Events or, with respect to an event described in Sections 2.4.4(b) or 2.4.4(c) hereof, would allow the Loan to continue to bear interest at the LIBOR Interest Rate without additional cost to Lender, and (ii) would not be otherwise prejudicial to Lender. Borrower hereby agrees to pay all reasonably incurred out-of-pocket costs and expenses incurred by Lender or any Funding Party in connection with any such designation or assignment.

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Section 2.5           Intentionally Omitted.

Section 2.6           Loan Taxes.

(a)          Any and all payments by Borrower to Lender hereunder and under the other Loan Documents shall, provided that Lender complies with the requirements of Section 2.6(c) hereof, be made free and clear of, and without deduction for, any and all present or future taxes, levies, imposts, deductions, charges, withholdings or liabilities with respect thereto, except for the following, for which Borrower shall not be responsible: (i) taxes imposed on or measured by Lender’s net income or net receipts; or (ii) franchise taxes imposed on Lender by the jurisdiction in which (A) Lender is organized, (B) Lender is “doing business” (unless such determination of “doing business” is made solely as a result of Lender’s interest in the Loan and the security therefor), or (C) Lender’s applicable lending office is located (all such taxes, levies, imposts, deductions, charges or withholdings and liabilities (except those described in the foregoing clauses (i) and (ii)) being hereinafter referred to as “Loan Taxes”). If Borrower shall be required by law to deduct or withhold any Loan Taxes from or in respect of any sum payable hereunder or under any other Loan Document, then (1) any such sum payable hereunder or under any other Loan Document shall be increased as may be necessary so that after making all required deductions or withholdings (including deductions applicable to additional sums payable under this Section 2.6), Lender receives an amount equal to the sum it would have received had no such deductions or withholdings (including deductions applicable to additional sums payable under this Section 2.6) been made, (2) Borrower shall make such deductions or withholdings, and (3) Borrower shall pay the full amount deducted or withheld to the relevant taxing authority in accordance with all Legal Requirements. Borrower will indemnify Lender for the full amount of any Loan Taxes (including, without limitation, any Loan Taxes (as well as taxes described in clauses (i) and (ii) of the second preceding sentence) imposed by any jurisdiction on any amounts payable under this Section 2.6) paid or payable by Lender and any liability (including, without limitation, penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Loan Taxes were correctly or legally asserted. A certificate as to the amount of such payment or liability delivered to Borrower by Lender shall be conclusive absent manifest error. The agreements and obligations of Borrower contained in this Section 2.6 shall survive the payment in full of principal and interest under this Agreement and the Note.

(b)          Within thirty (30) days after the date of any payment of Loan Taxes withheld by Borrower in respect of any payment to Lender, Borrower will furnish to Lender the original or a certified copy of a receipt or other evidence satisfactory to Lender evidencing payment thereof.

(c)          If Lender is a U.S. Person (other than the lender originally named herein), Lender shall deliver to Borrower, upon request, a Form W-9 (unless it establishes to the reasonable satisfaction of Borrower that it is otherwise eligible for an exemption from backup withholding tax or other withholding tax). If Lender is not a U.S. Person, Lender shall deliver to Borrower, upon request, either (i) a Form W-8BEN which indicates a 0% rate of tax or (ii) a Form W-8ECI. If Lender is not a U.S. Person, Lender further undertakes to deliver to Borrower additional Forms W-8, 1001, 4224 (or any successor forms) or other manner of certification, as the case may be, (A) on or before the date that any such form expires or becomes obsolete, (B) after the occurrence of any event requiring a change in the most recent form previously delivered

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by it to Borrower, and (C) such extensions or renewals thereof as may reasonably be requested by Borrower, certifying that Lender is entitled to receive payments hereunder without deduction or withholding of any Loan Taxes. However, in the event that any change in law, rule, regulation, treaty or directive, or in the interpretation or application thereof (a “Law Change”), has occurred prior to the date on which any delivery pursuant to the preceding sentence would otherwise be required which renders such form inapplicable, or which would prevent Lender from duly completing and delivering any such form, or if such Law Change results in Lender being unable to deliver a Form W-9 (or other satisfactory evidence that it is otherwise eligible for an exemption from backup withholding tax or other withholding tax), Lender shall not be obligated to deliver such forms but shall, promptly following such Law Change, but in any event prior to the time the next payment hereunder is due following such Law Change, advise Borrower in writing whether it is capable of receiving payments without any deduction or withholding of Loan Taxes. In the event of such Law Change, Borrower shall have the obligation to make Lender whole and to “gross-up” under Section 2.6(a) hereof, despite the failure by Lender to deliver such forms.

(d)          If Lender receives a refund in respect of Loan Taxes paid by Borrower, it shall promptly pay such refund, together with any other amounts paid by Borrower pursuant to Section 2.6(a) hereof in connection with such refunded Loan Taxes, to Borrower; provided, however, that Borrower agrees to promptly return such refund to Lender if it receives notice from Lender that it is required to repay such refund. Nothing contained herein shall be construed to require Lender to seek any refund and Lender shall have no obligation to Borrower to do so.

(e)          All amounts payable under this Section 2.6 shall constitute additional interest hereunder and shall be secured by the Security Instruments and the other Loan Documents.

(f)          Any reference under this Section 2.6 to “Lender” shall be deemed to include each Lender and any participant and any assignees.

Section 2.7           Extension of the Maturity Date.

2.7.1           Extension Option. Upon the satisfaction of the terms and conditions set forth in this Section 2.7.1, Borrower shall have the option (the “Extension Option”) to extend the Stated Maturity Date and the term of the Loan for one (1) term of twelve (12) months (the “Extension Period”) to March 6, 2018 (the “Extended Maturity Date”):

(a)          No Event of Default shall have occurred and then be continuing;

(b)          Lender shall have received from Borrower all sums then due and payable under the Loan Documents, including all payments of (or reimbursement of Lender for) any reasonable out of pocket miscellaneous fees or expenses (including, without limitation, any “protective advances” made by Lender in respect of the Loan);

(c)          Borrower shall notify Lender, in writing, of its irrevocable election to extend the Maturity Date as aforesaid not later than thirty (30) days prior to the Stated

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Maturity Date, which notice shall be accompanied by payment to Lender of an extension fee equal to one quarter of one percent (0.25%) of the Outstanding Principal Balance;

(d)          The Debt Service Coverage Ratio as of the date of commencement of the Extension Period shall be no less than 1.60:1.00;

(e)          The Loan-to-Value Ratio as of the date of commencement of the Extension Period shall be no greater than sixty-eight percent (68%);

(f)          The Reserve Accounts, including, without limitation, the PIP Reserve Account, shall be funded by Borrowers in amounts reasonably required by Lender, including, without limitation, (i) amounts estimated by Lender as sufficient to pay all costs for which the Reserve Funds were originally established, and (ii) any estimated or outstanding costs of completing all PIP Alterations and other expenditures required under any existing PIP Plans or other property improvement plans approved by Lender in accordance with the terms hereof, in the case of each of (i) and (ii), through the Extended Maturity Date;

(g)          Guarantors shall execute and deliver a reaffirmation, in form and substance reasonably satisfactory to Lender, of Guarantors’ respective obligations under each of the Loan Documents executed and delivered by them;

(h)          If the Interest Rate Protection Trigger Date has occurred prior to the Stated Maturity Date, then on or prior to Stated Maturity Date, Borrower shall either (i) extend the term of the then-existing Interest Rate Protection Agreement until the Extended Maturity Date or (ii) enter into a new Interest Rate Protection agreement which expires no earlier than the Extended Maturity Date, which extension or new agreement is on the same terms as set forth in Section 2.8.1, has the effect of capping LIBOR at three percent (3.0%) per annum through the Extended Maturity Date, has a notional amount equal to the Outstanding Principal Balance as of the stated Maturity Date, includes a consent or acknowledgement by the counterparty as described in Section 2.8.1, and is assigned to Lender pursuant to an Assignment of Interest Rate Protection Agreement as described in Section 2.8.1;

(i)          Borrowers provide an estoppel certificate or so-called “good standing letter” executed by each Franchisor under each Franchise Agreement not earlier than sixty (60) days prior to commencement of the Extension Period, in form and substance reasonably satisfactory to Lender, identifying the applicable Franchise Agreement and any amendments thereto, confirming that the applicable Borrower is not in default of any material obligation under the applicable Franchise Agreement, confirming the status of any PIP and PIP Work, and confirming that the applicable Franchise Agreement is in full force and effect (provided, however, that any outstanding franchisor notice relating to any guest satisfaction or similar program shall not be considered a default of a material obligation unless the condition resulting in such notice constitutes a breach or default by Borrower that, with the passage of time and/or delivery of notice, permits Franchisor to terminate or cancel the Franchise Agreement);

(j)          Borrowers shall deliver to Lender an Officer’s Certificate stating that all representations and warranties of Borrowers set forth in Article 3 remain true and correct, subject to any changes in facts or circumstances permitted to have occurred, or not prohibited

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from having occurred, pursuant to the terms of the Loan Documents (in which case such change of facts and circumstances shall be set forth in such Officer’s Certificate with reference to the applicable representation(s) and warranty(ies)) or setting forth any exceptions to such representations and warranties, which exceptions shall be satisfactory to Lender;

(k)          The absence of any Governmental Matter which, in Lender’s reasonable business judgment exercised in good faith, could reasonably be likely to (i) result in a Material Adverse Effect or (ii) subject Lender to material reputational risk; provided, however, (A) Borrower may satisfy this condition notwithstanding the existence of a Governmental Matter if, prior to the commencement of the Extension Period, Borrower, Guarantor, Affiliated Manager, any of their respective external corporate advisors (including AR Capital, LLC) or any of their respective Affiliates, as applicable, acts to suspend, remove or otherwise terminate the power to control Borrower or Guarantor, directly or indirectly, of the Person(s) subject to such Governmental Matter, and Lender determines in its reasonable business judgment exercised in good faith that such suspension, removal or termination will prevent any of the circumstances set forth in clauses (i) and (ii) above from occurring; and (B) the condition in this clause (k) shall not apply if a Permitted Common Equity Buyout Event has occurred prior to the Stated Maturity Date.

(l)          Borrowers shall deliver to Lender such other certificates, documents or instruments as Lender may reasonably require; and

(m)          Reimbursement to Lender of all of its out-of-pocket costs, including attorneys’ fees, incurred in connection with Borrowers’ exercise of the Extension Option.

2.7.2           Maturity Date. All references in this Agreement and in the other Loan Documents to the Maturity Date and Stated Maturity Date shall include the Extended Maturity Date in the event the Extension Option is exercised and Borrower fulfills the conditions set forth in Section 2.7.1.

Section 2.8           Interest Rate Protection Agreements.

2.8.1           Interest Rate Protection Agreement. Not later than ten (10) Business Days after the occurrence of an Interest Rate Protection Trigger Date (whether before or after commencement of the Extension Period), Borrower shall enter into, make all payments required under, and satisfy all conditions precedent to the effectiveness of, an interest rate protection agreement that satisfies all of the following conditions (such interest rate protection agreement, together with (i) any extension thereof or (ii) any other interest rate protection agreement entered into pursuant to this Section 2.8 or Section 2.7(h), being referred to herein as an “Interest Rate Protection Agreement”):

(a)          The Interest Rate Protection Agreement shall be with a financial institution having a long term, unsecured and unsubordinated debt rating of at least “A+” by S&P and “A1” by Moody’s; have a term ending no earlier than the Stated Maturity Date; be an interest rate cap in respect of a notional amount of not less than the Outstanding Principal Balance as of the date that the Interest Rate Cap Agreement is purchased; shall have the effect of

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capping LIBOR at three percent (3.00%) per annum; and shall provide that the only obligation of Borrower thereunder is the making of a single payment upon the execution and delivery thereof.

(b)          Immediately after issuance of the Interest Rate Protection Agreement (and, if the Extension Option has been exercised, not later than commencement of the Extension Period), Borrower’s interest in such Interest Rate Protection Agreement shall be assigned to Lender pursuant to documentation reasonably satisfactory to Lender in form and substance (an “Assignment of Interest Rate Protection Agreement”), and the counterparty to such Interest Rate Protection Agreement shall execute and deliver to Lender an acknowledgment of such assignment, which acknowledgment shall be reasonably satisfactory to Lender in form and substance and, without limitation, shall include such counterparty’s agreement to (i) pay directly into the Clearing Account all sums payable by such counterparty pursuant to the Interest Rate Protection Agreement and (ii) designate a successor counterparty under the Interest Rate Protection Agreement, which successor counterparty shall satisfy the criteria set forth in subsection (a) above and this subsection  (b), not later than ten (10) Business Days after the long term, unsecured and unsubordinated debt rating of such counterparty is downgraded below “A+” by S&P or “A1” by Moody’s, unless such counterparty deposits with Lender collateral, in form, value and substance acceptable to Lender in its sole discretion and pursuant to documentation acceptable to Lender in its sole reasonable discretion.

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

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

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

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

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(iv)        the Interest Rate Protection Agreement, and any other agreement which the counterparty has executed and delivered pursuant thereto, has been duly executed and delivered by the counterparty and constitutes the legal, valid and binding obligation of the counterparty, enforceable against the counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

2.8.2           Execution of Documents. Borrower shall promptly execute and deliver to the counterparty of the Interest Rate Protection Agreement such confirmations and agreements as may be requested by such counterparty in connection with such Interest Rate Protection Agreement.

2.8.3           No Obligation of Lender. Borrower agrees that Lender shall not have any obligation, duty or responsibility to Borrower or any other Person by reason of, or in connection with, any Interest Rate Protection Agreement (including any duty to provide or arrange any Interest Rate Protection Agreement, to consent to any mortgage or pledge of the Property or any portion thereof as security for Borrower’s performance of its obligations under any Interest Rate Protection Agreement, or to provide any credit or financial support for the obligations of Borrower or any other Person thereunder or with respect thereto). No Interest Rate Protection Agreement shall alter, impair, restrict, limit or modify in any respect the obligation of Borrower to pay interest on the Loan as and when the same becomes due and payable in accordance with the provisions of the Loan Documents.

2.8.4           Receipts from Interest Rate Protection Agreements. All payments made by the counterparty to the Interest Rate Protection Agreement shall be deposited into the Clearing Account and applied in the same manner as all Gross Revenue is applied under Section 6.1.

2.8.5           Downgrade of Counterparty. Borrower shall cause any counterparty under any Interest Rate Protection Agreement to be replaced with a successor counterparty, which successor counterparty shall satisfy the criteria set forth in Section 2.6.1(a), not later than ten (10) Business Days after the long term unsecured and unsubordinated debt rating of such counterparty is downgraded below “A+” by S&P or “A1” by Moody’s.

Section 2.9           Additional Interest.

(a)          Subject only to Section 2.9(d) below, Borrower shall be obligated to pay the Additional Interest to Lender as follows:

(i)          Upon any (and each) application of any Net Proceeds to the Debt in accordance with the terms of this Agreement and the Security Instrument, one and one-quarter percent (1.25%) of the amount thereof shall be retained by Lender on account of the Additional Interest and the balance thereof shall be applied in reduction of the Outstanding Principal Balance;

(ii)         Other than as set forth in the foregoing clause (i) and the following clause (iii), upon any (and each) partial prepayment of the Debt in accordance with the

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terms of this Agreement one and one-quarter percent (1.25%) of the amount thereof shall be retained by Lender or paid to Lender on account of the Additional Interest prior to the application of the balance of such partial prepayment in reduction of the Outstanding Principal Balance (Borrower acknowledging that only such amount actually applied in reduction of the Outstanding Principal Balance shall be deemed a prepayment for all purposes under this Agreement); and

(iii)        Upon repayment in full of the Debt or the acceleration thereof in accordance with the terms of any of the Loan Documents, Borrower shall pay to Lender the entire Additional Interest, less any amounts on account thereof previously paid to Lender under the foregoing clauses (i), and/or (ii) of this Section 2.9(a), as applicable, and/or elsewhere under this Agreement.

(b)          In furtherance of the foregoing, Borrower expressly acknowledges and agrees that (i) Lender shall have no obligation to accept any prepayment of the Loan unless and until Borrower shall have complied with this Section 2.9, and (ii) Lender shall have no obligation to release any Loan Document or Security Instrument upon payment of the Debt unless and until Lender shall have received the Additional Interest then due and payable.

(c)          Borrower expressly acknowledges and agrees that the Additional Interest shall constitute additional consideration for the Loan.

(d)          Notwithstanding anything herein or in any other Loan Document to the contrary, if and to the extent that either Ladder or DBNY shall fund a fixed rate mortgage loan for the purpose of refinancing all of the Properties, then the Additional Interest due to such refinancing Lender in respect of that portion of the Loan originally financed by such Lender hereunder shall be reduced to one-quarter of one percent (0.25%) and the remaining portion of the Additional Interest in respect of that portion of the Loan originally financed by such Lender (i.e., one percent (1%)) shall be waived; provided, however, the balance of Additional Interest due hereunder to the non-refinancing Lender shall be due and payable, without reduction, in accordance with Section 2.9(a) hereof.

Section 2.10         REMIC Test on Property Release. Notwithstanding anything to the contrary contained herein or in any other Loan Document, if the Loan is included in a REMIC Trust and (a) any Property or any portion of any Property is sought to be released from the Lien of any Security Instrument, whether in connection with the release of any individual Property pursuant to the Closed Property Release Conditions, a Casualty or Condemnation or otherwise, and (b) immediately after any such release the ratio of the unpaid principal balance of the Loan to the value of the remaining Properties (but, in the case of a Casualty or Condemnation, taking into account any proposed Restoration of any remaining Property) is greater than one hundred twenty-five percent (125%) (based solely on real property and excluding any personal property or going concern value) (such value to be determined, in Lender’s sole discretion, by any commercially reasonable method permitted to a REMIC Trust, it being understood that Lender shall not require a new or updated appraisal to make such determination so long as there is another commercially reasonable valuation method available to Lender, which may include a buyer’s purchase price in the case of a contemporaneous arm’s length sale and assumption of the Loan or a broker’s price opinion so long as such method is a commercially reasonable valuation

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method permitted to a REMIC Trust, as determined in Lender’s sole discretion), the Outstanding Principal Balance must first be paid down by a “qualified amount” as such term is defined in Internal Revenue Service Revenue Procedure 2010-30, as the same may be modified, supplemented, superseded or amended from time to time (regardless of whether Borrowers or Lender actually receive or are entitled to receive any related Net Proceeds in the case of a Casualty or Condemnation), unless Lender receives an opinion of counsel that, if the foregoing prepayment is not made, the applicable REMIC Trust will neither fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code or be subject to any tax, in either case, as a result of such release. If and to the extent the release is in connection with a Casualty or Condemnation, and if Borrowers shall have otherwise satisfied each of the conditions to release of Net Proceeds as set forth in Section 5.3, only such amount of the Net Proceeds then held or controlled by Lender, if any, in excess of the “qualified amount” required to pay down the principal balance of the Loan may be released for purposes of Restoration or released as otherwise expressly provided in Section 5.3. Any prepayment made under this Section 2.7 shall be accompanied by payment of the Additional Interest and the Minimum Interest Required Payment, except that so long as no Event of Default shall have occurred and be continuing, no Minimum Interest Required Payment shall be due in connection with any such prepayment made by reason of a release in connection with a Casualty or Condemnation. Borrowers shall pay or, if Borrower fails to pay, reimburse Lender upon receipt of notice from Lender, for all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees and disbursements) incurred by Lender in connection with confirming compliance with or enforcing the terms and provisions of this Section 2.7.

Article 3: REPRESENTATIONS AND WARRANTIES

Section 3.1           Borrower Representations. Each of the representations and warranties made by Borrower in this Article 3 shall be deemed to be made separately by each Borrower; provided, however, and subject to the terms of this Agreement, the liability for any inaccuracies in such representations and warranties shall be joint and several among the Borrowers. Each Borrower represents and warrants to Lender that:

3.1.1           Organization. Each Borrower and each SPC Party is duly organized, validly existing and in good standing with full power and authority to own its assets and conduct its business, and is duly qualified in all jurisdictions in which the ownership or lease of its property or the conduct of its business requires such qualification, except where the failure to be so qualified would not have a Material Adverse Effect, and each Borrower has taken all necessary action to authorize the execution, delivery and performance of the Loan Documents by it, and has the power and authority to execute, deliver and perform under the Loan Documents and all the transactions contemplated by the Loan Documents.

3.1.2           Proceedings. The Loan Documents have been duly authorized, executed and delivered by each Borrower and constitute a legal, valid and binding obligation of each Borrower, enforceable against each Borrower in accordance with their respective terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally, and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

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3.1.3           No Conflicts. The execution and delivery of the Loan Documents by each Borrower and the performance of its Obligations under the Loan Documents will not conflict with any provision of any law or regulation to which Borrower is subject, or conflict with, result in a breach of, or constitute a default under, any of the terms, conditions or provisions of any of any Borrower’s organizational documents or any agreement or instrument to which any Borrower is a party or by which it is bound, or any order or decree applicable to Borrower, or result in the creation or imposition of any Lien on any of any Borrower’s assets or property (other than pursuant to the Loan Documents).

3.1.4           Litigation. There is no action, suit, proceeding or investigation pending or, to Borrowers’ knowledge, threatened against any Borrower, any SPC Party, Guarantor, Property Manager, Intermediate Manager or any Property in any court or by or before any other Governmental Authority which, if adversely determined, might have a Material Adverse Effect.

3.1.5           Agreements. No Borrower is in default with respect to any order or decree of any court or any order, regulation or demand of any Governmental Authority, which default might have a Material Adverse Effect. No Borrower is in default in any material respect in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any Permitted Encumbrance or any other agreement or instrument to which it is a party or by which it or any Property is bound.

3.1.6           Consents. No consent, approval, authorization or order of any court or Governmental Authority is required for the execution, delivery and performance by any Borrower of, or compliance by such Borrower with, the Loan Documents or the consummation of the transactions contemplated hereby, other than those which have been obtained by each Borrower.

3.1.7           Title. Each Borrower has good, marketable and insurable fee simple title to the real property comprising part of its respective Property and good title to the balance of the Property owned by it, free and clear of all Liens whatsoever except the Permitted Encumbrances. None of the Permitted Encumbrances, individually or in the aggregate, (a) materially interfere with the benefits of the security intended to be provided by the Loan Documents, (b) materially and adversely affect the value of the Property, (c) impair the use or operation of the Property, or (d) impair Borrower’s ability to pay its Obligations in a timely manner. The Security Instruments, when properly recorded in the appropriate records, together with any Uniform Commercial Code financing statements required to be filed in connection therewith, will create (i) a valid, first priority, perfected Lien on Borrower’s interest in the Properties, subject only to Permitted Encumbrances, and (ii) perfected security interests in and to, and perfected collateral assignments of, all personalty (including the Leases) in which a security interest can be perfected by filing the Security Instruments and/or a financing statement, all in accordance with the terms thereof, in each case subject only to the Permitted Encumbrances. There are no mechanics’, materialman’s or other similar Liens or claims which have been filed for work, labor or materials affecting any of the Properties which are or may become Liens prior to, or equal or coordinate with, the Lien of the Security Instruments.

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3.1.8           No Plan Assets. No Borrower is an “employee benefit plan,” as defined in Section 3(3) of ERISA, subject to Title I of ERISA or Section 4975 of the Code, and none of the assets of Borrower constitutes or will constitute “plan assets” of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. Compliance by each Borrower with the provisions hereof will not involve any Prohibited Transaction. Neither Guarantor nor any Borrower has any pension, profit sharing, stock option, insurance or other arrangement or plan for employees covered by Title IV of ERISA, and no “Reportable Event” as defined in ERISA has occurred and is now continuing with respect to any such plan. The performance by each Borrower of its obligations under the Loan Documents and each Borrower’s conducting of its operations do not violate any provisions of ERISA. In addition, (a) Borrower is not a “governmental plan” within the meaning of Section 3(32) of ERISA, (b) transactions by or with any Borrower are not subject to any state statute or regulation regulating investments of, or fiduciary obligations with respect to, governmental plans within the meaning of Section 2(32) of ERISA which is similar to the provisions of Section 406 of ERISA or Section 4975 of the Code currently in effect, which prohibit or otherwise restrict the transactions contemplated by this Agreement, and (c) none of any Borrower, Guarantor or ERISA Affiliate is as of the date hereof, or has been at any time within the two (2) years preceding the date hereof, an employer required to contribute to any Multiemployer Plan or Multiple Employer Plan, or a “contributing sponsor” (as such term is defined in Section 4001 of ERISA) in any Multiemployer Plan or Multiple Employer Plan; and none of any Borrower, Guarantor or any ERISA Affiliate has any contingent liability with respect to any post-retirement “welfare benefit plan” (as such term is defined in ERISA) except as disclosed to Lender in writing. For purposes of this Section 3.1.8, Borrowers shall be entitled to assume that no source of funds used to make the Loan constitutes “plan assets” within the meaning of Section 3(42) of ERISA.

3.1.9           Compliance. To Borrower’s knowledge, except as otherwise disclosed in writing to Lender in the zoning reports prepared by Massey Consulting Group and delivered to Lender in connection with the closing of the Loan (collectively, the “Zoning Reports”), Borrowers and the Properties and the use thereof currently comply in all material respects with all applicable Legal Requirements, including parking, building and zoning and land use laws, ordinances, regulations and codes. No Borrower is in default or violation of any order, writ, injunction, decree or demand of any Governmental Authority, the violation of which might have a Material Adverse Effect. There has not been committed by Borrower or, to Borrower’s knowledge, any other Person in occupancy of or involved with the operation or use of any Property any act or omission which may give any Governmental Authority the right to cause Borrower to forfeit the Property or any part thereof or any monies paid in performance of Borrowers’ Obligations under any of the Loan Documents. Except as otherwise disclosed to Lender in the Zoning Reports, in the event that all or any part of the Improvements are destroyed or damaged, said Improvements can be legally reconstructed to their condition prior to such damage or destruction, and thereafter exist for the same use without violating any zoning or other ordinances applicable thereto existing as of the date hereof and without the necessity of obtaining any variances or special permits. No legal proceedings are pending or, to the knowledge of any Borrower, threatened with respect to the zoning of any Property. Neither the zoning nor any other right to construct, use or operate any Property is in any way dependent upon or related to any property other than such Property. The use being made of each Property is in conformity with the certificate of occupancy issued for such Property and all other restrictions, covenants and conditions affecting the Property.

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3.1.10         Financial Information. All financial data, including the statements of cash flow and income and operating expense, that have been delivered to Lender in respect of Borrowers and the Properties (a) are true, complete and correct in all material respects, (b) accurately represent the financial condition of each Property as of the date of such reports, and (c) have been prepared in accordance with sound accounting principles throughout the periods covered. 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 Material Adverse Effect, except as referred to or reflected in said financial statements. Since the date of the financial statements, there has been no material adverse change in the financial condition, operations or business of any Borrowers or any of the Properties from that set forth in said financial statements.

3.1.11         Condemnation. Except as set forth on Schedule 3.1.11 of this Agreement, no Condemnation or other proceeding has been commenced or, to Borrowers’ knowledge, is contemplated with respect to all or any portion of any of the Properties or for the relocation of roadways providing access to any of the Properties.

3.1.12         Easements; Utilities and Public Access. To Borrower’s knowledge, all easements, cross easements, licenses, air rights and rights-of-way or other similar property interests (collectively, “Easements”), if any, necessary for the full utilization of the Improvements for their intended purposes have been obtained, are described in the Title Insurance Policy and are in full force and effect without default thereunder. Each Property has rights of access to public ways and is served by water, sewer, sanitary sewer and storm drain facilities adequate to service the Property for its intended uses. All public utilities necessary or convenient to the full use and enjoyment of each Property are, to Borrower’s knowledge, located in the public right-of-way abutting the Property, and all such utilities are connected so as to serve the Property without passing over other property absent a valid easement. All roads necessary for the use of each Property for its current purpose have been completed and dedicated to public use and accepted by all Governmental Authorities.

3.1.13         Separate Lots. To Borrower’s knowledge, each Property is comprised of one or more parcels which constitute separate tax lots and do not constitute a portion of any other tax lot not a part of such Property.

3.1.14         Taxes and Assessments. All Taxes and governmental assessments owing in respect of each Property have been paid or an escrow of funds in an amount sufficient to cover such payments has been established hereunder. There are no pending or, to Borrower’s knowledge, proposed special or other assessments for public improvements or otherwise affecting any Property, nor are there any contemplated improvements to any Property that may result in such special or other assessments.

3.1.15         Enforceability. The Loan Documents are not subject to any right of rescission, set-off, counterclaim or defense by any Borrower, including the defense of usury, nor would the operation of any of the terms of the Loan Documents, or the exercise of any right thereunder, render the Loan Documents unenforceable (subject to applicable bankruptcy,

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insolvency or similar laws affecting creditor’s rights and principles of equity), and no Borrower has asserted any right of rescission, set-off, counterclaim or defense with respect thereto.

3.1.16         Assignment of Leases. The Assignment of Leases creates a valid assignment of, or a valid security interest in, certain rights under the Leases, subject only to a license granted to Borrower to exercise certain rights and to perform certain obligations of the lessor under the Leases, including the right to operate the Property. No Person other than Lender has any interest in or assignment of the Leases or any portion of the Rents due and payable or to become due and payable thereunder.

3.1.17         Insurance. Borrower has obtained and delivered, or has caused to be obtained and delivered, to Lender original certificates evidencing all of the Policies, with all premiums paid as they become due, reflecting the insurance coverages, amounts and other requirements set forth in this Agreement. Except as set forth on Schedule 3.1.17 of this Agreement, no claims are pending with respect to any Property under any of the Policies, and no Person, including any Borrower, has done, by act or omission, anything which would impair the coverage of any of the Policies.

3.1.18         Licenses. All permits and approvals, including without limitation, certificates of occupancy and any applicable liquor license (or interim beverage agreement) required by any Governmental Authority for the use, occupancy and operation of each Property in the manner in which such Property is currently being used, occupied and operated have been obtained and are in full force and effect.

3.1.19         Flood Zone. Except as shown on the Survey, none of the Improvements on any of the Properties are located in an area identified by the Federal Emergency Management Agency as a special flood hazard area.

3.1.20         Physical Condition. To Borrower’s knowledge, and except as disclosed by the physical condition report for such Property prepared by Nova Consulting Group, Inc., delivered to Lender in connection with the closing of the Loan, each Property, including 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 such Property, whether latent (to Borrower’s knowledge) or otherwise, and no Borrower has received notice from any insurance company or bonding company of any defects or inadequacies in any 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.

3.1.21         Boundaries. Except as shown on the Survey prepared and delivered to Lender in connection with the closing of the Loan, all of the Improvements which were included in determining the appraised value of the Properties lie wholly within the boundaries and building restriction lines of each Property, and no improvements on adjoining properties encroach upon any Property, and no easements or other encumbrances affecting any Property

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encroach upon any of the Improvements, so as to affect the value or marketability of such Property, except those which are insured against by the Title Insurance Policy or are Permitted Encumbrances with respect to the Property.

3.1.22         Leases. No Property is subject to any Leases other than that certain parking agreement between Global Airport Parking, Inc. and Hampton Inn Knoxville Airport, dated as of August 8, 2012. No Person has any possessory interest in any Property or right to occupy the same.

3.1.23         Filing and Recording Taxes. All transfer taxes, deed stamps, intangible taxes or other amounts in the nature of transfer taxes required to be paid under applicable Legal Requirements in connection with the transfer of the Properties to Borrower have been paid or are being paid simultaneously herewith. All mortgage, mortgage recording, stamp, intangible or other similar tax required to be paid under applicable Legal Requirements in connection with the execution, delivery, recordation, filing, registration, perfection or enforcement of any of the Loan Documents, including the Security Instruments, have been paid or are being paid simultaneously herewith. All taxes and governmental assessments due and owing in respect of the Property have been paid, or an escrow of funds in an amount sufficient to cover such payments has been established hereunder or are insured against by the Title Insurance Policy.

3.1.24         Single Purpose. Borrower hereby represents and warrants to, and covenants with, Lender that since each Borrower’s, each SPC Party’s and each Liquor License Subsidiary’s creation, as of the date hereof and until such time as the Obligations shall be paid and performed in full, each Borrower, each Liquor License Subsidiary and each SPC Party have complied with, are in compliance with, and shall comply with the requirements set forth on Schedule III attached hereto.

3.1.25         Tax Filings. To the extent required, each Borrower has filed (or has obtained effective extensions for filing) all federal, state, commonwealth, district and local tax returns required to be filed and has paid or made adequate provision for the payment of all federal, state, commonwealth, district and local taxes, charges and assessments payable by any Borrower. Borrower believes that its tax returns (if any) properly reflect the income and taxes of Borrower for the periods covered thereby, subject only to reasonable adjustments required by the Internal Revenue Service or other applicable tax authority upon audit.

3.1.26         Solvency. Borrowers have (a)  not entered into the transaction or any Loan Document with the actual intent to hinder, delay, or defraud any creditor and (b) received reasonably equivalent value in exchange for its Obligations under the Loan Documents. Giving effect to the Loan, the fair saleable value of Borrowers’ assets exceeds and will, immediately following the making of the Loan, exceed Borrowers’ total liabilities, including subordinated, unliquidated, disputed and contingent liabilities. The fair saleable value of Borrowers’ assets is and immediately following the making of the Loan, will be greater than Borrowers’ probable liabilities, including the maximum amount of its contingent liabilities on its debts as such debts become absolute and matured. Borrowers’ assets do not and, immediately following the making of the Loan will not, constitute unreasonably small capital to carry out its business as conducted or as proposed to be conducted. Borrowers do not intend to, and does not believe that it will,

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incur Indebtedness and liabilities (including contingent liabilities and other commitments) beyond its ability to pay such Indebtedness and liabilities as they mature (taking into account the timing and amounts of cash to be received by Borrowers and the amounts to be payable on or in respect of the obligations of Borrowers).

3.1.27         Federal Reserve Regulations. No part of the proceeds of the Loan will be used for the purpose of purchasing or acquiring any “margin stock” within the meaning of 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 Regulations T, U or X or any other Regulations of such Board of Governors, or for any purposes prohibited by Legal Requirements or by the terms and conditions of the Loan Documents.

3.1.28         Organizational Chart. The organizational chart attached as Schedule IV hereto, relating to Borrower and certain Affiliates and other parties, is true, complete and correct on and as of the date hereof. No Person other than those Persons shown on Schedule IV have any ownership interest in, or right of Control, directly or indirectly, in Borrower or Guarantor.

3.1.29         Organizational Status. Each Borrower’s exact legal name, organizational type, jurisdiction of formation, tax identification number and organizational identification number are as shown on Schedule II.

3.1.30         Bank Holding Company. No Borrower is a “bank holding company” or a direct subsidiary of a “bank holding company” as defined in the Bank Holding Company Act of 1956, as amended, and Regulation Y thereunder of the Board of Governors of the Federal Reserve System.

3.1.31         No Casualty. To Borrower’s knowledge, except as disclosed in the physical condition report for the Property prepared by Nova Consulting Group, Inc. and the PIP Plans, the Improvements have suffered no material casualty or damage which has not been fully repaired and the cost thereof fully paid.

3.1.32         Purchase Options. None of the Properties nor any part thereof or interest therein are subject to any purchase options, rights of first refusal or offer to purchase or other similar rights in favor of third parties.

3.1.33         FIRPTA. No Borrower is a “foreign person” within the meaning of Sections 1445 or 7701 of the Code.

3.1.34         Illegal Activity. No portion of any Property has been or will be purchased with proceeds of any illegal activity.

3.1.35         Investment Company Act. No Borrower is (a) an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, or (b) subject to any other United States federal or state law or regulation which purports to restrict or regulate its ability to borrow money.

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3.1.36         Use of Property. Each Property consists solely of a hotel and related operations and is used for no other purpose.

3.1.37         Fiscal Year. Each fiscal year of Borrower commences on January 1.

3.1.38         No Other Financing. No Borrower has borrowed any funds which have not heretofore been repaid in full, except for the Loan.

3.1.39         Contracts.

(a)          No Borrower has entered into, and is not bound by, any Major Contract which continues in existence, except those previously disclosed in writing to Lender.

(b)          Each of the Major Contracts is in full force and effect, there are no monetary or other material defaults by any Borrower thereunder and, to the knowledge of Borrowers, there are no monetary or other material defaults thereunder by any other party thereto. None of any Borrower, Property Manager, Intermediate Manager or any other Person acting on any Borrower’s behalf has given or received any notice of default under any of the Major Contracts that remains uncured or in dispute.

(c)          To Borrower’s knowledge, Borrower has identified all Major Contracts and delivered to Lender true, correct and complete copies of the Major Contracts (including all amendments and supplements thereto) requested by Lender.

(d)          Except for the Intermediate Management Agreements, any Property Management Agreement with Crestline Hotels & Resorts, LLC as Property Manager, and the Beverage Concession Agreement, no Major Contract has as a party an Affiliate of Borrower. All fees and other compensation for services previously performed under the Intermediate Management Agreements have been paid in full.

3.1.40         Full and Accurate Disclosure; No Change in Facts. All information submitted by or on behalf of Borrower, Guarantor and their respective Affiliates to Lender and in all financial statements, rent rolls, reports, certificates and other documents submitted in connection with the Loan or in satisfaction of the terms of the Loan Documents is true, correct and complete in all material respects. No statement of fact made by Borrower or any Affiliate of any Borrower in any of the Loan Documents or in any written statement or document furnished by or on behalf of Borrower in connection with the Loan or pursuant to the Loan Documents, including, without limitation, any documentation submitted to Lender in connection with or pursuant to the Term Sheet, 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 which has not been disclosed to Lender which could have a Material Adverse Effect, other than with regard to market risk inherent in projecting future operations, and there has been no material adverse change in any condition, fact or circumstance that would make any of the information or statements of fact referenced above inaccurate, incomplete or otherwise misleading in any material respect or that otherwise could reasonably be expected to have a Material Adverse Effect.

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3.1.41         Other Obligations and Liabilities. No Borrower has liabilities or other obligations that arose or accrued prior to the date hereof that, either individually or in the aggregate, could have a Material Adverse Effect.

3.1.42         Operating Lease. The list of Operating Leases in Schedule XIII is accurate and complete as of the date hereof. Each Operating Lease is in full force and effect and there is no default by any Borrower thereunder and no event has occurred that with the passage of time and/or giving of notice, would constitute a default thereunder. Except for the Permitted Encumbrances, each Borrower’s interest in the Operating Lease is not subject to any liens or encumbrances.

3.1.43         REA. To Borrower’s knowledge, there are no other covenants, restrictions or agreements relating to the construction, operation or use of the Property other than the REAs. To Borrower’s knowledge, each REA is in full force and effect and neither Borrower nor any other party to any REA, is in default thereunder, and to the best of Borrower’s knowledge, there are no conditions which, with the passage of time or the giving of notice, or both, would constitute a default under any REA.

3.1.44         Bankruptcy Filings. No petition in bankruptcy or insolvency has ever been filed or is pending against Borrower, any SPC Party, Guarantor or any of their respective shareholders, partners, members or non-member managers that, directly or indirectly, own twenty percent (20%) or more of the legal, beneficial or economic interests in Borrower, any SPC Party or Guarantor or are in Control of any Borrower, any SPC Party or Guarantor, and none of any Borrower, any SPC Party, Guarantor or any of their respective shareholders, partners, members or non-member managers that, directly or indirectly, own twenty percent (20%) or more of the legal, beneficial or economic interests in any Borrower, any SPC Party or Guarantor or are in Control of any Borrower, any SPC Party or Guarantor, has ever made an assignment for the benefit of creditors or taken advantage of any insolvency laws. None of any Borrower, any SPC Party, Guarantor or any of their respective shareholders, partners, members or non-member managers that, directly or indirectly, own twenty percent (20%) or more of the legal, beneficial or economic interests in any Borrower, any SPC Party or Guarantor or are in Control of any Borrower, any SPC Party or Guarantor, is contemplating either the filing of a petition under any federal, state, local or foreign bankruptcy or insolvency laws or the liquidation of all or a material portion of any Borrower’s, any SPC Party’s or Guarantor’s or such shareholder’s, partner’s, member’s or non-member manager’s assets or properties, and none of any Borrower, any SPC Party, Guarantor or any of their respective shareholders, partners, members or non-member managers that, directly or indirectly, own twenty percent (20%) or more of the legal, beneficial or economic interests in any Borrower, any SPC Party or Guarantor or are in Control of any Borrower, any SPC Party or Guarantor, has any knowledge of any Person contemplating the filing of any such petition against any Borrower, any SPC Party, Guarantor or any of their respective shareholders, partners, members or non-member managers that, directly or indirectly, own twenty percent (20%) or more of the legal, beneficial or economic interests in any Borrower, any SPC Party or Guarantor or are in Control of any Borrower, any SPC Party or Guarantor. Notwithstanding anything herein to the contrary, Borrowers do not make any representation or warranty herein with respect to any public shareholder of Guarantor owning less than twenty percent (20%) of Guarantor.

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3.1.45         PIP Plans. Each of the PIP Plans attached as Exhibit P-1 and PIP Budgets attached as Exhibit P-2 are true, correct and complete as of the date hereof. The timelines for completion of the PIP Plans and the PIP Completion Date, each shown on Exhibit P-3, attached hereto and made a part hereof, is an accurate indication of the timeline and deadline for completing the applicable PIP Plan as currently required by the applicable Franchisor. Each PIP Plan attached on Exhibit P-1 has been approved by the applicable Borrower and the applicable Franchisor. Borrower has not received any written notice or demand from any Franchisor demanding any repair, maintenance, alterations or improvement to any Property other than as specifically identified in a PIP Plan. To Borrower’s knowledge, each PIP Budget is sufficient to complete the applicable PIP Plan.

3.1.46         Intermediate Management Agreement. Each Intermediate Management Agreement with the applicable Intermediate Manager is in full force and effect and there is no default thereunder by any party thereto and no event has occurred that, with the passage of time and/or giving of notice, would constitute a default thereunder. As of the date hereof, Intermediate Manager’s material obligations under the Intermediate Management Agreement have been subcontracted to the Property Manager pursuant to one or more Property Management Agreements.

3.1.47         Property Management Agreement. Each Property Management Agreement with the applicable Property Manager is in full force and effect and there is no default thereunder by any party thereto and no event has occurred that, with the passage of time and/or giving of notice, would constitute a default thereunder. Each Property Management Agreement (exclusive of the Property Management Agreements with Crestline Hotels & Resorts, LLC) was negotiated on an arms-length basis.

3.1.48         Beverage Concession Agreement. The Beverage Concession Agreement is in full force and effect and there is no default thereunder by any party thereto and no event has occurred that, with the passage of time and/or giving of notice, would constitute a default thereunder.

3.1.49         Beverage Management Agreement. The Beverage Management Agreement is in full force and effect and there is no default thereunder by any party thereto and no event has occurred that, with the passage of time and/or giving of notice, would constitute a default thereunder.

3.1.50         Franchise Agreement. The list of Franchise Agreements in Schedule X is accurate and complete as of the date hereof. Each Franchise Agreement is in full force and effect, there is no default thereunder by any party thereto and no event has occurred that, with the passage of time and/or giving of notice, would constitute a default thereunder and none of Borrower, Guarantor, Intermediate Manager or any of their respective Affiliates has received notice from Franchisor that the hotel (a) has received low quality or customer satisfaction ratings, surveys or reports, (b) is not in compliance with Franchisor’s brand standards or (c) has failed any franchise inspection report, or received any similar notice. Each Franchise Agreement was negotiated on an arms-length basis. All amounts due any franchisor under any franchise agreement that affected the Properties prior to the Closing Date have been paid in full.

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3.1.51         Personal Property. Upon closing of the Loan, Borrower will own all material personal property necessary to operate the Property in the manner it is currently operated or will obtain such personal property to do so within ninety (90) days of the Closing Date.

3.1.52         Equipment Leases. To Borrower’s knowledge, Borrower has identified all Material Equipment Leases and Borrowers have delivered to Lender correct and complete copies of any existing Material Equipment Leases affecting the Property. Borrowers own all of the furniture, fixtures and equipment necessary to operate the Properties in the manner they are currently operated, other than such furniture, fixtures and equipment which are subject to Equipment Leases.

3.1.53         Collective Bargaining. To Borrower’s knowledge, except for the Collective Bargaining Agreement, there are no collective bargaining agreements to which any Borrower is a party or by which any Borrower is or may be bound.  No Borrower has violated in any material respects any applicable laws, rules and regulations relating to the employment of labor, including those relating to wages, hours, collective bargaining and the payment and withholding of taxes and other sums as required by appropriate Governmental Authorities. To Borrower’s knowledge, the outstanding obligations with respect to pending pension obligations is $60,000.00.

Section 3.2           Survival of Representations; Reliance.

The representations and warranties set forth in Section 3.1 shall survive until the Obligations have been paid and performed in full. All representations, warranties, covenants and agreements made in this Agreement or the other Loan Documents by Borrower or any other Restricted Party shall be deemed to have been relied upon by Lender regardless of any investigation made by or on behalf of Lender either prior to or following the date hereof.

Article 4: BORROWER COVENANTS

Section 4.1           Borrower Affirmative Covenants. Borrowers hereby covenant and agrees with Lender that throughout the Term:

4.1.1           Payment and Performance of Obligations. Borrower shall pay and otherwise perform the Obligations in accordance with the terms of this Agreement and the other Loan Documents.

4.1.2           Existence; Compliance with Legal Requirements. Each Borrower and each SPC Party shall do or cause to be done all things necessary to preserve, renew and keep in full force and effect its existence, rights, licenses, permits and franchises and comply with all Legal Requirements applicable to it and the Properties including, without limitation, completing all applications necessary to cause final issuance of all such licenses, permits and similar certificates in the name of Borrower or Property Manager. There shall never be committed by any Borrower, and no Borrower shall permit any other Person in occupancy of or involved with the operation or use of any Property to commit any act or omission affording any Governmental Authority the right of forfeiture against any Property or any part thereof or any monies paid in performance of Borrowers’ obligations under the Loan Documents. Borrower covenants and

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agrees not to commit, permit or suffer to exist any act or omission affording such right of forfeiture. Borrower shall at all times maintain, preserve and protect all franchises and trade names and preserve all the remainder of its property used or useful in the conduct of its business and shall keep the Properties in good working order and repair, and from time to time make, or cause to be made, all reasonably necessary repairs, renewals, replacements, betterments and improvements thereto, all as more fully provided in the Loan Documents.

4.1.3           Taxes and Other Charges. Borrower shall pay all Taxes and Other Charges now or hereafter levied, assessed or imposed as the same become due and payable, and shall furnish to Lender receipts for the payment of the Taxes and the Other Charges prior to the date the same shall become delinquent (provided, however, that Borrower need not pay directly Taxes nor furnish such receipts for payment of Taxes to the extent that funds to pay for such Taxes have been deposited into the Tax Account pursuant to Section 6.3 hereof). No Borrower shall permit or suffer, and shall promptly discharge, any Lien or charge against the Property, and shall promptly pay for all utility services provided to the Property. After prior notice to Lender, Borrower, at its own expense, may contest by appropriate legal proceeding, conducted in good faith and with due diligence, the amount or validity of any Taxes or Other Charges, provided that (a) no Default or Event of Default shall have occurred and be continuing; (b) such proceeding shall be permitted under and be conducted in accordance with the provisions of any other instrument to which any Borrower or Property is subject and shall not constitute a default thereunder and such proceeding shall be conducted in accordance with all applicable Legal Requirements; (c) neither the Properties nor any part thereof or interest therein will be in danger of being sold, forfeited, terminated, canceled or lost; (d) Borrower shall promptly upon final determination thereof pay the amount of any such Taxes or Other Charges, together with all costs, interest and penalties which may be payable in connection therewith; (e) such proceeding shall suspend the collection of Taxes or Other Charges from the Properties; and (f) except to the extent funds allocable to such Taxes and Other Charges are already deposited with Lender pursuant to Section 6.3 of this Agreement and provided such deposits are not designated for future payment of Taxes and Other Charges, Borrower shall deposit with Lender cash or other security as may be required in the proceeding, or as may otherwise be reasonably requested by Lender, to ensure the payment of any such Taxes or Other Charges, together with all interest and penalties thereon. Lender may pay over any such cash or other security held by Lender to the claimant entitled thereto at any time when, in the reasonable judgment of Lender, the entitlement of such claimant is established.

4.1.4           Litigation. Borrower shall give prompt notice to Lender of any litigation or governmental proceedings pending or threatened against any Borrower, any SPC Party, Guarantor, Property Manager or Intermediate Manager which, if adversely determined, would reasonably be expected to have a Material Adverse Effect.

4.1.5           Access to Property. Borrower shall permit agents, representatives, consultants and employees of Lender to inspect any Property or any part thereof at reasonable hours upon reasonable advance notice (which may be given orally). Lender or its agents, representatives, consultants and employees as part of any inspection may take soil, air, water, building material and other samples from any Property, subject to the rights of Tenants under Leases.

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4.1.6           Further Assurances; Supplemental Mortgage Affidavits. Borrower shall, at Borrower’s sole cost and expense:

(a)          execute and deliver to Lender such documents, instruments, certificates, assignments and other writings, and do such other acts necessary or desirable, to evidence, preserve and/or protect the collateral at any time securing or intended to secure the Obligations, as Lender may reasonably require (including, without limitation, the execution and delivery of all such writings necessary to transfer any liquor licenses with respect to the Property into the name of Lender or its designee after the occurrence of an Event of Default); and

(b)          do and execute all and such further lawful and reasonable acts, conveyances and assurances for the better and more effective carrying out of the intents and purposes of the Loan Documents, as Lender shall reasonably require from time to time.

4.1.7           Financial Reporting.

(a)          Borrower shall keep and maintain or shall cause to be kept and maintained proper and accurate books and records, in accordance with GAAP, reflecting the financial affairs of Borrower. Lender shall have the right from time to time during normal business hours upon reasonable notice (which may be given orally) to Borrower to examine such books and records at the office of Borrower or other Person maintaining such books and records and to make such copies or extracts thereof as Lender shall desire. After the occurrence and during the continuance of an Event of Default, Borrower shall pay any actual, out-of-pocket costs incurred by Lender to examine such books, records and accounts, as Lender shall determine to be necessary or appropriate in the protection of Lender’s interest.

(b)          Borrower shall furnish Lender annually, within ninety (90) days following the end of each Fiscal Year, (x) a complete copy of Borrower’s annual financial statements prepared in accordance with GAAP covering the Property, including statements of income and expense and balance sheets for Borrower and the Property. Such statements shall set forth Gross Revenue, Operating Expenses, Capital Expenditures, Net Operating Income and Net Cash Flow for the Property on a line-item basis, where applicable, and occupancy statistics for the Property. Borrower’s annual financial statements shall be accompanied by (i) a current rent roll for the Property (if applicable) and (ii) an Officer’s Certificate of the Chief Financial Officer of Borrower certifying (A) that such annual financial statement is true, correct, accurate and complete and fairly presents the financial condition and the results of operations of Borrower and the Property and (B) whether to the best of Borrower’s knowledge there exists an event or circumstance which constitutes a Default or Event of Default by Borrower under the Loan Documents and if such Default or Event of Default exists, the nature thereof, the period of time it has existed and the action then being taken to remedy the same, and (x) consolidated financial statements of Guarantor for such Fiscal Year audited by an independent certified public accountant acceptable to Lender (Lender hereby approves KPMG as an acceptable auditor); provided, however, Guarantor’s delivery of financial reports pursuant to the Guaranty shall satisfy Guarantor’s requirements hereunder.

(c)          Borrower shall furnish Lender on or before the forty-fifth (45th) day after the end of each calendar quarter throughout the Term, the following items,

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accompanied by an Officer’s Certificate of the Chief Financial Officer of Borrower certifying (i) that such items attached to such certificate are true, correct, accurate and complete and fairly present the financial condition and results of the operations of Borrower and the Property, and (ii) whether to the best of Borrower’s knowledge there exists an event or circumstance which constitutes a Default or Event of Default by Borrower under the Loan Documents and if such Default or Event of Default exists, the nature thereof, the period of time it has existed and the action then being taken to remedy the same:

(i)          quarterly and year-to-date statements of income and expense for such quarter and a balance sheet for Borrower and the Property, prepared in accordance with GAAP;

(ii)         a comparison of the budgeted income and expenses as set forth in the Approved Annual Budget and the actual income and expenses for such quarter and year to date for the Property, together with a detailed explanation of any variances of (x) more than ten percent (10%) between budgeted and actual amounts in respect of any single line item in such Approved Annual Budget, and (y) more than five percent (5%) between budgeted and actual amounts in respect of aggregate income or expenses, as the case may be, covered in such Approved Annual Budget, in each case, for such quarter and year to date;

(iii)        a calculation reflecting the Debt Service Coverage Ratio as of the last day of such quarter, for such quarter and the last four (4) quarters;

(iv)        a current rent roll for the Property (if applicable); and

(v)         an occupancy report for the subject quarter, including an average daily rate.

(d)          Borrower shall furnish Lender on or before the thirtieth (30^th) day, but in no event later than the forty fifth (45th) day, after the end of April 2015 and each calendar month thereafter, the following items, accompanied by an Officer’s Certificate of the Chief Financial Officer of Borrower certifying (i) that such items attached to such certificate are true, correct, accurate and complete and fairly present the financial condition and results of the operations of Borrower and the Property whether to the best of Borrower’s knowledge there exists an event or circumstance which constitutes a Default or Event of Default by Borrower under the Loan Documents and if such Default or Event of Default exists, the nature thereof, the period of time it has existed and the action then being taken to remedy the same, and (ii) whether to the best of Borrower’s knowledge there exists an event or circumstance which constitutes a Default or Event of Default by Borrower under the Loan Documents and if such Default or Event of Default exists, the nature thereof, the period of time it has existed and the action then being taken to remedy the same:

(i)          monthly and year-to-date statements of income and expense for such month and a balance sheet, each with respect to the Property, prepared in accordance with GAAP;

(ii)         upon Lender’s request, a comparison of the budgeted income and expenses as set forth in the Approved Annual Budget and the actual income and

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expenses for such month and year to date for the Property, together with a detailed explanation of any variances of (x) more than ten percent (10%) between budgeted and actual amounts in respect of any single line item in such Approved Annual Budget, and (y) more than five percent (5%) between budgeted and actual amounts in respect of the Approved Annual Budget taken as a whole, in each case, for such month and year to date;

(iii)        a current rent roll for the Property (if applicable); and

(iv)        (A) the most current Smith Travel Research Reports in the form of Exhibit A hereto then available to Borrower reflecting market penetration and relevant hotel properties competing with the Property, (B) any franchise inspection reports received by Borrower, Guarantor, Property Manager, Intermediate Manager or any of their respective Affiliates during such month in respect of each Property, (C) any notice from Franchisor that a hotel constituting a portion of the Property (1) has received low quality or customer satisfaction ratings, surveys or reports, (2) is not in compliance with Franchisor’s brand standards or (3) has failed any franchise inspection report, or any similar notice in each case received by Borrower, Guarantor, Property Manager, Intermediate Manager or any of their respective Affiliates during such month, and (D) an occupancy report for the Property for the subject month, including an average daily rate.

(v)         any notice received from a Tenant threatening non-payment of Rent or other default, alleging or acknowledging a default by landlord, requesting a termination of a Lease or a material modification of any Lease or notifying Borrower of the exercise or non-exercise of any option provided for in such Tenant’s Lease, or any other similar material correspondence received by Borrower from Tenants during the subject month.

(e)          Borrower shall submit to Lender by December 1 of each year the Annual Budget for the succeeding Fiscal Year. Lender shall have the right to approve each Annual Budget (which approval shall not be unreasonably withheld or delayed, and shall be subject to Section 4.1.7(g) below) and Annual Budgets approved by Lender shall hereinafter be referred to as an “Approved Annual Budget”. In the event that Borrower seeks reimbursement from the Operating Expense Funds held by Lender pursuant to Section 6.8 for an extraordinary operating expense or extraordinary capital expenditure that was not set forth in the Approved Annual Budget then in effect (each an “Extraordinary Expense”), then Borrower shall promptly deliver to Lender a reasonably detailed explanation of such proposed Extraordinary Expense for Lender’s approval. Until such time that any Annual Budget has been approved by Lender, the prior Approved Annual Budget shall apply for all purposes hereunder, except in connection with Lender’s determination of Adjusted Operating Expenses for purposes of calculating Underwritten Net Cash Flow; provided that, such Approved Annual Budget shall be adjusted to reflect actual increases in Taxes, Other Charges, Insurance Premiums and utility charges, and all other expenses shall be adjusted by the CPI. It is hereby acknowledged and agreed that the 2015 Annual Budget approved by Lender in connection with the closing of the Loan shall, for purposes hereof, be deemed to constitute an Approved Annual Budget).

(f)          Borrower shall furnish to Lender, within five (5) Business Days after request (or as soon thereafter as may be reasonably possible), such further detailed

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information with respect to the operation of the Property and the financial affairs of Borrower as may be reasonably requested by Lender.

(g)          Whenever Lender’s approval is required pursuant to the provisions of Section 4.1.7(e), Lender shall use good faith efforts to respond within ten (10) Business Days after Lender’s receipt of Borrowers’ written request for such approval. Such request shall contain a legend clearly marked in not less than fourteen (14) point bold face type, underlined, in all capital letters stating “FIRST NOTICE: THIS IS A REQUEST FOR APPROVAL UNDER THE LOAN BY LADDER CAPITAL FINANCE LLC AND DEUTSCHE BANK AG, NEW YORK BRANCH, SECURED BY THE EQUITY INNS PORTFOLIO. FAILURE TO RESPOND TO THIS REQUEST WITHIN TEN (10) BUSINESS DAYS MAY RESULT IN THE REQUEST BEING DEEMED APPROVED”. If Lender fails to respond to such request within ten (10) Business Days, and Borrowers send a second request containing a legend clearly marked in not less than fourteen (14) point bold face type, underlined, in all capital letters stating “SECOND AND FINAL NOTICE: THIS IS A REQUEST FOR APPROVAL UNDER THE LOAN BY LADDER CAPITAL FINANCE LLC AND DEUTSCHE BANK AG, NEW YORK BRANCH, SECURED BY THE EQUITY INNS PORTFOLIO. IF YOU FAIL TO PROVIDE A SUBSTANTIVE RESPONSE (E.G., APPROVAL, DENIAL OR REQUEST FOR CLARIFICATION OR MORE INFORMATION) TO THIS REQUEST FOR APPROVAL IN WRITING WITHIN TEN (10) BUSINESS DAYS, YOUR APPROVAL SHALL BE DEEMED GRANTED”, Lender shall be deemed to have approved such matter if Lender fails to respond to such second written request before the expiration of such second ten (10) Business Day period.

4.1.8           Title to the Property. Borrower shall warrant and defend the validity and priority of the Liens of the Security Instrument(s) and the Assignment of Leases on the Property against the claims of all Persons whomsoever, subject only to the Permitted Encumbrances.

4.1.9           Estoppel Statement.

(a)          Each party hereunder shall, within ten (10) Business Days following a request of the other party hereto, furnish a statement, duly acknowledged and certified, stating (i) the Outstanding Principal Balance of the Note, (ii) the then-current LIBOR Interest Rate (or the Base Rate, if then applicable), (iii) the date installments of interest and/or principal were last paid, and (iv) in the case of a statement furnished by Borrower, any offsets or defenses to the payment and performance of the Obligations.

(b)          Borrower shall deliver to Lender, upon request, an estoppel certificate from each Tenant under any Lease in form and substance reasonably satisfactory to Lender (provided that Borrower shall only be required to use commercially reasonable efforts to obtain an estoppel certificate from any Tenant not required to provide an estoppel certificate under its Lease); provided that such certificate may be in the form required under such Lease; and provided, further, that Borrower shall not be required to deliver such certificates more frequently than two (2) times in any calendar year.

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(c)          Borrower shall deliver to Lender, within thirty (30) days after Lender’s request, estoppel certificates or so-called “good standing letters” from each party under each Franchise Agreement, each Property Management Agreement and each Intermediate Management Agreement (to the extent that the applicable Franchise Agreement, Property Management Agreement or Intermediate Management Agreement entitles Borrower to request an estoppel certificate or “good standing letter”) in form and substance reasonably satisfactory to Lender; provided, that such certificates and/or letters may be in the form required under the applicable Franchise Agreement, Property Management Agreement or Intermediate Management Agreement; and provided, further, that Borrower shall not be required to deliver such certificates and/or letters more than one (1) time in any calendar year unless (i) an Event of Default shall have occurred and be continuing, or (ii) such certificates and/or letters are required in connection with a Secondary Market Transaction.

(d)          Borrower shall use commercially reasonable efforts to deliver to Lender, within thirty (30) days after Lender’s request, estoppel certificates from each party under each REA in form and substance reasonably satisfactory to Lender; provided, that such certificates may be in the form required under the REA; and provided, further, that Borrower shall not be required to deliver such certificates more than one (1) time in any calendar year.

4.1.10         Leases. All Leases and all renewals of Leases executed after the date hereof shall require Lender’s prior written consent which consent shall not be unreasonably withheld, conditioned or delayed for up to one (1) Lease at each Property constituting less than five percent (5%) of the Gross Revenue of such Property.

4.1.11         Alterations. Lender’s prior written approval shall be required in connection with (a) any alterations to any Improvements (i) that may have a Material Adverse Effect, (ii) that could materially adversely affect any structural component or the exterior of any Improvements or any utility or HVAC system at the Property, or (iii) the cost of which (including any related alteration, improvement or replacement) is reasonably anticipated to exceed the Alteration Threshold or (b) any alteration to any Improvements during the continuance of an Event of Default (any of the foregoing, a “Material Alteration”). If the total unpaid amounts incurred and to be incurred with respect to such alterations to the Improvements shall at any time exceed the Alteration Threshold, Borrower shall promptly deliver to Lender as security for the payment of such amounts and as additional security for Borrower’s Obligations under the Loan Documents any of the following: (1) cash, (2) a Letter of Credit, (3) U.S. Obligations, or (4) other securities acceptable to Lender, provided that, to the extent applicable, Lender shall have received a Rating Agency Confirmation as to the form and issuer of same. Such security shall be in an amount equal to the excess of the total unpaid amounts incurred and to be incurred with respect to such alterations to the Improvements (other than such amounts to be paid or reimbursed by Tenants under the Leases) over the Alteration Threshold. Upon substantial completion of any Material Alteration, Borrower shall provide evidence satisfactory to Lender that (i) the Material Alteration was constructed in accordance with applicable Legal Requirements, (ii) all contractors, subcontractors, materialmen and professionals who provided work, materials or services in connection with the Material Alteration have been paid in full and have delivered unconditional releases of liens, and (iii) all material licenses and permits necessary for the use, operation and occupancy of the Material Alteration (other than those which depend on the performance of tenant improvement work) have been issued.

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4.1.12         Approval of Major Contracts. Borrower shall be required to obtain Lender’s prior written approval of any and all Major Contracts affecting the Property, which approval may be granted or withheld in Lender’s reasonable discretion.

4.1.13         After Acquired Property. Borrower shall grant to Lender a first lien security interest in and to all equipment and other personal property owned by Borrower, whether or not used in the construction, maintenance and/or operation of the Improvements, immediately upon acquisition of same or any part of same.

4.1.14         Patriot Act. Borrower shall comply with the Patriot Act and all applicable requirements of Governmental Authorities having jurisdiction over Borrower and/or the Property, including those relating to money laundering and terrorism. Lender shall have the right to audit Borrower’s compliance with the Patriot Act and all applicable requirements of Governmental Authorities having jurisdiction over Borrower and/or the Property, including those relating to money laundering and terrorism. In the event that Borrower fails to comply with the Patriot Act or any such requirements of Governmental Authorities, then Lender may, at its option, cause Borrower to comply therewith and any and all costs and expenses incurred by Lender in connection therewith shall be secured by the Security Instruments and the other Loan Documents and shall be immediately due and payable.

4.1.15         Special Purpose. Borrower, each Liquor License Subsidiary and each SPC Party shall at all times comply with the requirements set forth on Schedule III attached hereto and shall not take or permit any action that would result in Borrower, any Liquor License Subsidiary or any SPC Party not being in compliance with the representations, warranties and covenants set forth in Section 3.1.24 and Schedule III attached hereto.

4.1.16         Operating Leases. Each Borrower shall diligently perform and observe in all material respects all of the terms, covenants and conditions of the applicable Operating Lease on the part of such Borrower, as landlord or tenant thereunder. Borrower shall not, without the prior written consent of Lender, terminate or cancel any Operating Lease or modify, change, supplement, alter or amend, or waive any of the terms or provisions of, any Operating Lease, in any material respect, either orally or in writing.

4.1.17         Major Contracts; REA.

(a)          Borrower shall promptly (i) diligently perform and observe in all material respects all of the terms, covenants and conditions to be performed and observed by it under each Major Contract to which it is a party, and do all things necessary to preserve and keep unimpaired its rights thereunder, (ii) notify Lender of any material notice of default given by any party under any Major Contract and deliver to Lender a true copy of each such notice, and (iii) enforce the performance and observance of all of the terms, covenants and conditions required to be performed and/or observed by the other party to each Major Contract and to which Borrower is a party in a commercially reasonable manner.

(b)          Borrower shall promptly (i) diligently perform and observe in all material respects all of the terms, covenants and conditions to be performed and observed by it under each REA to which it is a party, and do all things necessary to preserve and keep

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unimpaired its rights thereunder, (ii) notify Lender of any notice of material default given by any party under any REA and deliver to Lender a true copy of each such notice, and (iii) enforce the performance and observance of all of the terms, covenants and conditions required to be performed and/or observed by the other party to each REA and to which Borrower is a party in a commercially reasonable manner.

4.1.18         O&M Program. Borrower hereby represents and warrants that attached hereto as Schedule XVI is a true and complete copy of each of the Operations and Maintenance Plans in respect of the properties described therein (collectively, the “O&M Program”), and Borrower has, as of the date hereof, complied in all material respects with the O&M Program. Borrower hereby covenants and agrees that, during the Term, including any extension or renewal thereof, Borrower shall comply in all material respects with the terms and conditions of the O&M Program.

4.1.19         PIPs.

(a)          Lender’s consent shall be required in connection with any modification or amendment to any PIP Plan, PIP Budget, or PIP Completion Date, as set forth on Exhibits P-1, P-2, and P-3, respectively, attached hereto and made a part hereof, provided, however, that any modification or amendment accepted by the applicable Franchisor shall be deemed approved by Lender so long as (i) no Event of Default shall have occurred and be continuing, (ii) such modification or amendment shall not serve to increase any PIP Budget, increase the obligations of any Borrower or accelerate the time limits prescribed therein without Lender approval and (iii) in all cases, Borrower shall provide prior written notice of all such modifications or amendments. Each Borrower shall (x) take all necessary action to diligently complete in a manner acceptable to the applicable Franchisor the PIP Alterations applicable to such Borrower’s Property as contemplated under the applicable PIP Plan and in accordance with the applicable PIP Budget on or before the PIP Completion Date, as any of the same may have been modified or amended in accordance with the foregoing sentence, provided, however, in the case of any PIP Plan having a budget in excess of $15,000.00 per room, Lender shall be entitled to inspect such PIP Alterations for the purpose of determining such completion. Such Borrower shall deliver to Lender within forty–five (45) days following the completion of the applicable PIP Plan evidence reasonably satisfactory to Lender that the applicable Franchisor has accepted the PIP Alterations applicable to such Borrower’s Property as complete.

(b)          Subject to Lender’s required approval of any modification to the PIP Budget attached to this Agreement in accordance with clause (a), above, ninety (90) days prior to Borrower’s commencement of any work related to a PIP Plan at any Property, but in no event later than ninety (90) days prior to the “PIP Commencement Date” identified in the applicable PIP Plan, Borrower shall deliver to Lender a detailed PIP Budget showing line-item detail reasonably acceptable to Lender in respect of such PIP Plan.

(c)          In the event that Lender receives notice from a Franchisor under a Franchise Agreement that a Borrower has failed to complete the required PIP Alteration Work applicable to such Borrower’s Property by the applicable PIP Completion Date, Lender may (after notice and a reasonable cure period not to exceed sixty (60) days unless Lender reasonably determines that a shorter period is necessary to avoid any default or termination of the Franchise

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Agreement) elect to complete such PIP Alteration Work, and Borrower shall reimburse Lender upon demand for all sums expended by Lender in connection with such completion of the PIP Alteration Work. Any amount expended by Lender to complete any PIP Alteration Work shall be a protective advance and shall be secured by the Security Instrument.

(d)          Borrowers shall give Lender prompt written notice of any demand from a Franchisor for an amendment to a PIP Plan, and any demand from a Franchisor for any repairs, maintenance, alterations, or improvements required to comply with a Franchise Agreement.

4.1.20         Required Repairs. Borrower shall perform the repairs and other work at the Property as set forth on Schedule V attached hereto (such repairs and other work hereinafter referred to as “Required Repairs”) and shall complete each of the Required Repairs on or before the respective deadline for each repair as set forth on Schedule V.

4.1.21         Cure of Violations. Borrower shall promptly cure and use its commercially reasonable efforts to remove of record all building violations affecting the Property.

Section 4.2           Borrower Negative Covenants. Borrower covenants and agrees with Lender that throughout the Term:

4.2.1           Due on Sale and Encumbrance; Change of Control; Transfers of Interests. Except for Permitted Encumbrances or to the extent permitted pursuant to Article 8 hereof, neither Borrower nor any other Restricted Party shall, without the prior written consent of Lender (a) sell, transfer, convey, mortgage, grant, bargain, encumber, pledge, assign, alienate, lease (except to Tenants under Leases that are not in violation of Section 4.1.10 hereof), grant any option with respect to or grant any other interest in the Property or any part thereof or interest therein, including any legal, beneficial, economic or voting interest in Borrower or any other Restricted Party, whether directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise or (b) permit or suffer any change in Control of such Restricted Party to occur (each of (a) and (b), a “Transfer”). A Transfer within the meaning of this Section 4.2.1 shall be deemed to include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof or interest therein for a price to be paid in installments; (ii) an agreement by Borrower for the leasing of all or a substantial part of the Property for any purpose other than the actual occupancy by a space tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if Borrower or any other Restricted Party is a corporation, the voluntary or involuntary sale, conveyance or transfer of such corporation’s stock (or the stock of any corporation directly or indirectly Controlling such corporation by operation of law or otherwise) or the creation or issuance of new stock such that such corporation’s stock shall be vested in a party or parties who are not now stockholders; (iv) if Borrower or any other Restricted Party is a limited or general partnership, joint venture or limited liability company, the change, removal, resignation or addition of a general partner, managing partner, limited partner, joint venturer, member or non-member manager, the voluntary or involuntary sale,

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conveyance or transfer of the partnership interest of any general partner, managing partner or limited partner, the creation or issuance of new partnership interests, the voluntary or involuntary sale, conveyance or transfer of the interest of any joint venturer, member or non-member manager or the creation or issuance of new membership interests or interests in any non-member manager; (v) if Borrower or any other Restricted Party is a trust or nominee trust, the voluntary or involuntary sale, conveyance or transfer of the legal or beneficial interest in such trust or nominee trust or the creation or issuance of new legal or beneficial interests; and (vi) the change, removal, resignation or addition of any external corporate advisor (other than Property Manager and Intermediate Manager) of Borrower or any other Controlling Person (provided that this clause (vi) shall not apply following a Permitted Common Equity Buyout Event).

4.2.2           Liens. Borrower shall not create, incur, assume or permit to exist any Lien on any direct or indirect interest in Borrower or any SPC Party or any portion of the Property except for (a) Permitted Encumbrances, or (b) Transfers, in the case of this clause (b), to the extent permitted pursuant to Article 8.

4.2.3           Dissolution. No Borrower shall (a) engage in any dissolution, liquidation or consolidation or merger with or into any other business entity, (b) engage in any business activity not related to the ownership and operation of the applicable Property, (c) transfer, lease or sell, in one transaction or any combination of transactions, all or substantially all of the property or assets of any Borrower except to the extent expressly permitted by the Loan Documents, or (d) cause, permit or suffer any SPC Party to (i) dissolve, wind up or liquidate or take any action, or omit to take any action, as a result of which such SPC Party would be dissolved, wound up or liquidated in whole or in part or (ii) amend, modify, waive or terminate the certificate of incorporation or bylaws of such SPC Party, in any manner prohibited by the covenants contained on Schedule III without obtaining the prior written consent of Lender.

4.2.4           Change in Use. No Borrower shall change the current use of any Property in any material respect.

4.2.5           Debt Cancellation. No Borrower shall cancel or otherwise forgive or release any claim or debt (other than the termination of Leases in accordance herewith) owed to any Borrower by any Person, except for adequate consideration and in the ordinary course of such Borrower’s business.

4.2.6           Intentionally Omitted.

4.2.7           Zoning. No Borrower shall initiate or consent to any zoning reclassification of any portion of the Property or seek any variance under any existing zoning ordinance or use or permit the use of any portion of the Property in any manner that could result in such use becoming a non-conforming use under any zoning ordinance or any other applicable land use law, rule or regulation, without the prior written consent of Lender (such consent not to be unreasonably withheld, conditioned or delayed).

4.2.8           Intentionally Omitted.

4.2.9           No Joint Assessment. No Borrower shall suffer, permit or initiate the joint assessment of any Property (a) with any other real property constituting a tax lot separate from such Property and (b) with any portion of such Property which may be deemed to constitute

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personal property, or any other procedure whereby the Lien of any taxes which may be levied against such personal property shall be assessed or levied or charged to such Property.

4.2.10         Principal Place of Business. Borrower shall not change its principal place of business from the address set forth on the first page of this Agreement without first giving Lender thirty (30) days prior written notice, provided, however, in connection with the delivery of any Preferred Equity Change in Control Notice, such change in address may be effected after giving Lender ten (10) Business Days prior written notice.

4.2.11         Change of Name, Identity or Structure. No Borrower shall change such Borrower’s name, identity (including its trade name or names) or, if not an individual, Borrower’s corporate, partnership or other structure without notifying Lender of such change in writing at least thirty (30) days prior to the effective date of such change and, in the case of a change in such Borrower’s structure, without first obtaining the prior written consent of Lender. Prior to or contemporaneously with the effective date of any such change such Borrower shall take all action required by Lender, including, without limitation, executing (if necessary) and delivering to Lender any financing statement or financing statement change in order to establish or maintain the validity, perfection and priority of the lien and security interest granted herein and in the other Loan Documents. Borrower shall promptly notify Lender in writing of any change in its organizational identification number. If any Borrower does not now have an organizational identification number and later obtains one, such Borrower shall promptly notify Lender in writing of such organizational identification number. At the request of Lender, such Borrower shall execute a certificate in form satisfactory to Lender listing the trade names under which such Borrower intends to operate the applicable Property, and representing and warranting that such Borrower does business under no other trade name with respect to the applicable Property.

4.2.12         Intentionally Omitted.

4.2.13         ERISA.

(a)          For purposes of this Section 4.2.13, Borrowers shall be entitled to assume that no source of funds used to make the Loan constitutes “plan assets” within the meaning of Section 3(42) of ERISA.

(b)          No Borrower shall engage in any transaction which would cause any obligation, or action taken or to be taken, hereunder (or the exercise by Lender of any of its rights under the Loan Documents) to be a non-exempt (under a statutory or administrative class exemption) prohibited transaction under ERISA or Section 4975 of the Code.

(c)          Borrower shall deliver to Lender such certifications or other evidence from time to time throughout the Term, as requested by Lender in its sole discretion, that (i) each Borrower is not and does not maintain an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, or a “governmental plan” within the meaning of Section 3(3) of ERISA; (ii) each Borrower is not subject to state statutes regulating investments and fiduciary obligations with respect to governmental plans; and (iii) one or more of the following circumstances is true:

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(i)          Equity interests in Borrower are publicly offered securities, within the meaning of 29 C.F.R §2510.3-101(b)(2);

(ii)         Less than twenty-five percent (25%) of each outstanding class of equity interests in Borrower are held by “benefit plan investors” within the meaning of 29 C.F.R §2510.3-101(f)(2); or

(iii)        Borrower qualifies as an “operating company” or a “real estate operating company” within the meaning of 29 C.F.R §2510.3-101(c) or (e).

4.2.14         Compliance with Restrictive Covenants, Etc. No Borrower shall modify, waive or release in any material respect any easements, restrictive covenants or other Permitted Encumbrances, or suffer, consent to or permit the foregoing, without Lender’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.

4.2.15         REAs. Without the prior written consent of Lender (such consent not to be unreasonably withheld, conditioned or delayed), no Borrower shall (i) modify, amend or supplement, or consent to or suffer any modification, amendment, or supplementation of, or waive or release any of its material rights and remedies under any REA, (ii) take (and each Borrower hereby assigns to Lender any right it may have to take) any action to terminate the REA, or (iii) assign (other than to Lender) or encumber (other than in favor of Lender as security for the Obligations) any of its rights under the REA.

4.2.16         Embargoed Person.

(a)          At all times, throughout the Term, including after giving effect to any Transfers, (i) none of the funds or other assets of Borrower or Guarantor shall constitute property of, or shall be beneficially owned, directly or indirectly, by any Person subject to trade restrictions under United States law, including, but not limited to, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (PATRIOT Act) of 2001 and any Executive Orders or regulations promulgated thereunder, each as may be amended from time to time, with the result that the investment in Borrower or Guarantor, as applicable (whether directly or indirectly), would be prohibited by law (each, an “Embargoed Person”), or the Loan made by Lender would be in violation of law, (ii) no Embargoed Person shall have any interest of any nature whatsoever in Borrower or Guarantor, as applicable, with the result that the investment in Borrower or Guarantor, as applicable (whether directly or indirectly), would be prohibited by law or the Loan would be in violation of law, and (iii) none of the funds of Borrower or Guarantor, as applicable, shall be derived from any unlawful activity with the result that the investment in Borrower or Guarantor, as applicable (whether directly or indirectly), would be prohibited by law or the Loan would be in violation of law. Compliance with this provision in respect of Persons owning less than twenty percent (20%) of all beneficial interests in Borrower or Guarantor may be completed by virtue of actions taken on behalf of Borrower or Guarantor in the ordinary course of business through licensed broker dealers in accordance with all applicable legal requirements concerning third party investors and in a manner consistent with previous offerings conducted by Guarantor or its Affiliates to date.

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(b)          None of any Borrower nor, to Borrower’s knowledge, any owner of a direct or indirect interest in any Borrower (i) is listed on any Government Lists, (ii) is a person who has been determined by competent authority to be subject to the prohibitions contained in Presidential Executive Order No. 13224 (Sept. 23, 2001) or any other similar prohibitions contained in the rules and regulations of the Office of Foreign Assets Control (“OFAC”) or in any enabling legislation or other Presidential Executive Orders in respect thereof, (iii) has been previously indicted for or convicted of any felony involving a crime or crimes of moral turpitude or for any Patriot Act Offense, or (iv) is currently under investigation by any Governmental Authority for alleged criminal activity. For purposes hereof, the term “Patriot Act Offense” means any violation of the criminal laws of the United States of America or of any of the several states, or that would be a criminal violation if committed within the jurisdiction of the United States of America or any of the several states, relating to terrorism or the laundering of monetary instruments, including any offense under (A) the criminal laws against terrorism; (B) the criminal laws against money laundering, (C) the Bank Secrecy Act, as amended, (D) the Money Laundering Control Act of 1986, as amended, or (E) the Patriot Act. “Patriot Act Offense” also includes the crimes of conspiracy to commit, or aiding and abetting another to commit, a Patriot Act Offense. For purposes hereof, the term “Government Lists” means (1) the Specially Designated Nationals and Blocked Persons Lists maintained by OFAC, (2) any other list of terrorists, terrorist organizations or narcotics traffickers maintained pursuant to any of the Rules and Regulations of OFAC that Lender notified Borrower in writing is now included in “Government Lists”, or (3) any similar lists maintained by the United States Department of State, the United States Department of Commerce or any other Government Authority or pursuant to any Executive Order of the President of the United States of America that Lender notified Borrower in writing is now included in “Government Lists”.

4.2.17         Matters Concerning Leases. Borrower shall not enter any new Lease that would violate any exclusive use or other restrictions contained in any existing Leases, or amend or modify any existing Lease to permit any use or occupancy that would violate any exclusive use or other restrictions contained in any existing Lease.

Article 5: INSURANCE, CASUALTY AND CONDEMNATION

Section 5.1           Insurance.

5.1.1           Insurance Policies.

(a)          Unless otherwise agreed to by Lender in its sole and absolute discretion, Borrower, at its sole cost and expense, shall obtain and maintain during the entire Term, or cause to be maintained, insurance policies for Borrower and the Property in satisfaction of all requirements of the Franchise Agreements and providing at least the following coverages:

(i)          property insurance against loss or damage by fire, wind (including named storms), lightning and such other perils as are included in a standard “all risk” or “special form” policy, including riot and civil commotion, vandalism, terrorist acts (as defined by then current TRIPRA provided TRIPRA continues to cover foreign and domestic acts), malicious mischief, burglary and theft, in each case (A) in an amount equal to one hundred percent (100%) of the “Full Replacement Cost” of the Property, which for purposes of this

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Agreement shall mean actual replacement value (exclusive of costs of excavations, foundations, underground utilities and footings) waiving depreciation. The Full Replacement Cost must be adjusted annually to reflect increased value due to inflation. If this is not provided, Inflation Guard Coverage shall be required; (B) written on a no co-insurance form or containing an agreed amount endorsement with respect to the Improvements and, if applicable, personal property at the Property waiving all co-insurance provisions; (C) providing for no deductible in excess of $50,000.00 (except for deductibles for windstorm and earthquake coverage, which deductibles may be up to five percent (5%) of the total insurable value of the Property set forth in the Policy); and (D) containing “Ordinance or Law Coverage” if any of the Improvements or the use of the Property shall at any time constitute legal non-conforming structures or uses, including coverage for Loss to the Undamaged Portion, Demolition Costs and Increased Cost of Construction, all in amounts acceptable to Lender. In addition, Borrower shall obtain: (y) 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 maximum amount of such insurance available under the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as each may be amended or such greater amount as Lender shall require; and (z) earthquake insurance in amounts and in form and substance satisfactory to Lender (provided that Lender shall not require earthquake insurance unless the Property is located in an area with a high degree of seismic activity and a Probable Maximum Loss of greater than 20%), provided that the insurance pursuant to clauses (y) and (z) hereof shall be on terms consistent with the comprehensive all risk insurance policy required under this subsection (i);

(ii)         commercial general liability insurance, including a broad form comprehensive general liability endorsement and coverages against claims for personal injury, bodily injury, death or property damage occurring upon, in or about the Property, such insurance (A) to be on the so-called “occurrence” form and containing minimum limits per occurrence of One Million and No/100 Dollars ($1,000,000.00), with a combined limit per policy year, excluding umbrella coverage, of not less than Two Million and No/100 Dollars ($2,000,000.00) applying “per location” if the policy covers more than one location; (B) to continue at not less than the aforesaid limit until required to be changed by Lender by reason of changed economic conditions making such protection inadequate; and (C) to cover at least the following hazards: (1) premises and operations; (2) products and completed operations on an “if any” basis; (3) independent contractors; (4) contractual liability for all insured contracts; and (5) contractual liability covering the indemnities contained in Article 8 of each Security Instrument to the extent the same is available;

(iii)        rental loss and/or business income interruption insurance (A) with loss payable to Lender; (B) covering all risks required to be covered by the insurance provided for in subsection (i) above, subsections (iv) (if applicable), subsection (vi), subsection (x) and Section 5.1.1(h) below; (C) containing an extended period of indemnity endorsement which provides the continued loss of income shall 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 Property is repaired or replaced and operations are resumed, whichever first occurs, and notwithstanding that the policy may expire prior to the end of such period; and (D) in an amount equal to one hundred percent (100%) of the projected Gross Revenue from the Property, as reduced to reflect non-continuing expenses, for a period of eighteen (18) months

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from the date of the Casualty. The amount of such business income insurance shall be determined prior to the date hereof and at least once each year thereafter based on Borrower’s reasonable estimate of the Gross Revenue from the Property, as reduced to reflect non-continuing expenses, for the succeeding eighteen (18) month period. Subject to Section 5.2.3(b), all proceeds payable to Lender pursuant to this subsection shall be held by Lender and shall be applied to the Obligations secured by the Loan Documents from time to time due and payable hereunder and under the Note; provided, however, that nothing herein contained shall be deemed to relieve Borrower of its Obligations to pay the Debt on the respective dates of payment provided for in the Loan Documents except to the extent such amounts are actually paid out of the proceeds of such business income insurance;

(iv)        at all times during which structural construction, repairs or alterations are being made with respect to the Improvements, and only if the property and liability insurance coverage forms do not otherwise apply, coverage all in form and substance and with limits, terms and conditions acceptable to Lender including (A) commercial general liability and umbrella insurance covering claims related to the construction, repairs or alterations being made which are not covered by or under the terms or provisions of the commercial general liability and umbrella liability insurance policies required in this Section 5.1.1(a); and (B) the insurance provided for in subsection (i) above written in a so-called builder’s risk completed value form, including coverage for one hundred percent (100%) of the total insurable costs of construction (1) on a non-reporting basis, (2) against all risks insured against pursuant to subsections (i), (iii), (vi), (x) and Section 5.1.1(h), (3) including permission to occupy the Property, and (4) with an agreed amount endorsement waiving co-insurance provisions;

(v)         workers’ compensation, subject to the statutory limits of the State in which the Property is located, and employer’s liability insurance with limits which are required from time to time by Lender in respect of any work or operations on or about the Property, or in connection with the Property or its operation (if applicable);

(vi)        boiler and machinery/equipment breakdown insurance in amounts as shall be reasonably required by Lender on terms consistent with the commercial property insurance Policy required under subsection (i) above (if applicable);

(vii)       umbrella liability insurance in addition to primary coverage in an amount not less than One Hundred Million and No/100 Dollars ($100,000,000.00) per occurrence on terms consistent with the commercial general liability insurance policy required under subsection (ii) and, if applicable, the Policies required in subsection (v) above and (viii) below;

(viii)      commercial auto liability coverage for all owned and non-owned vehicles, including rented and leased vehicles containing minimum limits per occurrence, including umbrella coverage, with limits which are reasonably required from time to time by Lender (if applicable);

(ix)         insurance against employee dishonesty in an amount not less than one month of Gross Revenue from the Property and with a deductible not greater than Fifty Thousand and No/100 Dollars ($50,000.00) (if applicable); and

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(x)          upon sixty (60) days’ notice, such other insurance and in such amounts as Lender from time to time may reasonably request against such other insurable hazards which at the time are commonly insured against for properties similar to the Property located in or around the region in which the Property is located.

(b)          All insurance provided for in Section 5.1.1(a) shall be obtained under valid and enforceable policies (collectively, the “Policies” or in the singular, the “Policy”) and shall be subject to the reasonable approval of Lender as to form and substance including deductibles, loss payees and insureds. Not less than ten (10) days prior to the expiration dates of the Policies theretofore furnished to Lender, certificates of insurance evidencing the Policies (and, upon the written request of Lender, certification letters from Borrower and Borrower’s insurance broker attesting to the accuracy of the certificates of insurance regarding the amounts of insurance, perils insured and applicable deductibles) accompanied by evidence satisfactory to Lender of payment of the premiums then due thereunder (the “Insurance Premiums”), shall be delivered by Borrower to Lender.

(c)          Any blanket insurance Policy shall be subject to Lender’s approval, which shall not be unreasonably withheld, and shall provide the same protection as would a separate Policy insuring only the Property in compliance with the provisions of Section 5.1.1(a). Lender shall have determined based on a review of the schedule of locations and values that the amount of such coverage is sufficient in light of the other risks and properties insured under the blanket policy. Notwithstanding anything herein to the contrary, following a change in Control of Pool II Holdco in accordance with the terms of Section 8.2(c) hereof, Borrower shall be permitted to satisfy compliance with the provisions of Section 5.1.1(a) through the provision of insurance certificates for its blanket insurance Policy (and upon the written request of Lender, certification letters from Borrower and Borrower’s insurance broker attesting to the accuracy of the certificates of insurance regarding the amounts of insurance, perils insured and applicable deductibles).

(d)          All Policies of insurance provided for or contemplated by Section 5.1.1(a) shall name Borrower as a named insured and, in the case of liability coverages (except for the Policies referenced in Sections 5.1.1(a)(v) and (viii)) shall name Lender and its successors and/or assigns as the additional insured, as its interests may appear, and in the case of property insurance coverages, including but not limited to boiler and machinery, terrorism, flood and earthquake insurance, shall contain a standard non-contributing mortgagee/lender’s loss payable clause in favor of Lender providing that the loss thereunder shall be payable to Lender. Additionally, if Borrower obtains property insurance coverage in addition to or in excess of that required by Section 5.1.1(a)(i), then such insurance policies shall also contain a standard non-contributing mortgagee/lender’s loss payable clause in favor of Lender providing that the loss thereunder shall be payable to Lender.

(e)          All property insurance Policies provided for in Section 5.1.1(a) shall:

(i)          provide that no act or negligence of Borrower or any other insured under the Policy, or failure to comply with the provisions of any Policy, which might otherwise result in a forfeiture of the insurance or any part thereof, or foreclosure or similar

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action, shall in any way affect the validity or enforceability of the insurance insofar as Lender is concerned;

(ii)         provide that the Policy shall not be canceled without at least thirty (30) days’ written notice to Lender, except ten (10) days’ notice for non-payment of Insurance Premiums and, if obtainable by Borrower using commercially reasonable efforts, shall not be materially changed (other than to increase the coverage provided thereby) without such a thirty (30) day notice; and

(iii)        not contain any provision that would make Lender liable for any Insurance Premiums thereon or subject to any assessments thereunder, except that Lender is permitted to make payments to effect the contribution of such Policy upon notice of cancellation due to non-payment of Insurance Premiums pursuant to the mortgagee clause required herein.

(f)          If at any time Lender is not in receipt of written evidence that all insurance required hereunder is in full force and effect, or Borrower shall fail to deliver certificates of insurance and, if requested by Lender, other documentation evidencing the Policies, evidence of payment and any other information required by Section 5.1.1(b), no less than ten (10) days prior to the expiration date of any Policies, Lender shall have the right, without notice to Borrower, to take such action as Lender deems necessary to protect its interest in the Property, including the obtaining of such insurance coverage as Lender in its sole discretion deems appropriate and all Insurance Premiums incurred by Lender in connection with such action or in obtaining such insurance and keeping it in effect shall be paid by Borrower to Lender upon demand and until paid shall be secured by the Security Instruments and shall bear interest at the Default Rate. Borrower shall promptly forward to Lender a copy of each written notice received by Borrower of any modification, reduction or cancellation of any of the Policies or of any of the coverages afforded under any of the Policies.

(g)          In the event of foreclosure of any of the Security Instruments or other transfer of title to the Property in extinguishment in whole or in part of the Obligations, all right, title and interest of Borrower in and to the Policies that are not blanket Policies then in force concerning the Property and all proceeds payable thereunder shall thereupon vest in the purchaser at such foreclosure or Lender or other transferee in the event of such other transfer of title.

(h)          If any of the all-risk/special form property, rental loss and/or business interruption, commercial general liability or umbrella Policies include any exclusions for loss, cost, damage or liability caused by “terrorism” or “terrorist acts” (as defined by then current TRIPRA provided TRIPRA continues to cover foreign and domestic acts), Borrower shall obtain and maintain terrorism coverage to cover such exclusion(s) from a carrier which otherwise satisfies the rating criteria specified in Section 5.1.2 (a “Qualified Carrier”) or, in the event that such terrorism coverage is not available from a Qualified Carrier, Borrower shall obtain such terrorism coverage from the highest rated insurance company commercially available providing such terrorism coverage.

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5.1.2           Insurance Company. All Policies required pursuant to Section 5.1.1(a) (a) shall be issued by companies authorized to do business in the State with a financial strength and claims paying ability rating of “A” or better by S&P; provided, however, if the insurance is provided with multiple insurers, no less than 75% will maintain the rating of A or better by S&P (or its equivalent) with the remaining insurers maintaining no less than BBB+ by S&P (or its equivalent); (b) shall, with respect to the property, rental loss and/or business interruption, commercial general liability and umbrella Policies, contain a waiver of subrogation against Lender; (c) shall contain such provisions as Lender deems reasonably necessary or desirable to protect its interest including endorsements providing that neither Borrower, Lender nor any other party shall be a co-insurer under said Policies; and (d) shall be satisfactory in form and substance to Lender and shall be approved by Lender as to amounts, form, risk coverage, deductibles, loss payees and insureds, such approval not to be unreasonably withheld or delayed. If requested by Lender, certified copies of the Policies shall be delivered to Lender, at 345 Park Avenue, 8^th Floor, New York, New York 10154, Attention: Pamela McCormack, with respect to all renewal Policies, within thirty (30) days after the effective date thereof; provided, however, that if certified copies of the current Policies are not available on the date of request, Borrower shall deliver to Lender documentation acceptable to Lender evidencing such Policies within five (5) days and shall deliver to Lender certified copies of such Policies within ten (10) days after such Policies are available. Borrower shall pay the Insurance Premiums as the same become due and payable and shall furnish to Lender evidence of the renewal of each of the Policies with receipts for the payment of the Insurance Premiums or other evidence of such payment reasonably satisfactory to Lender (provided, however, that Borrower shall not be required to pay such Insurance Premiums nor furnish such evidence of payment to Lender in the event that the amounts required to pay such Insurance Premiums have been deposited into the Insurance Account pursuant to Section 6.4 hereof). In addition to the insurance coverages described in Section 5.1.1(a) above, Borrower shall obtain such other insurance as may from time to time be reasonably required by Lender in order to protect its interests. Within thirty (30) days after request by Lender, Borrower shall obtain such increases in the amounts of coverage required hereunder as may be reasonably requested by Lender, taking into consideration changes in the value of money over time, changes in liability laws, changes in prudent customs and practices, and the like.

Section 5.2           Casualty and Condemnation.

5.2.1           Casualty. If the Property shall sustain a Casualty, Borrower shall give prompt notice of such Casualty to Lender and shall promptly commence and diligently prosecute to completion the repair and restoration of the Property as nearly as possible to the condition the Property was in immediately prior to such Casualty (a “Restoration”) and otherwise in accordance with Section 5.3, regardless of whether Insurance Proceeds are available or made available, it being understood, however, that Borrower shall not be obligated to restore the Property to the precise condition of the Property prior to such Casualty provided the Property is restored, to the extent practicable, to be of at least equal value and of substantially the same character as prior to the Casualty. Borrower shall pay all costs of such Restoration whether or not such costs are covered by insurance. Lender may, but shall not be obligated to, submit proof of loss if not submitted promptly by Borrower. In the event of a Casualty where the loss does not exceed the Restoration Threshold, Borrower may settle and adjust such claim; provided that (a) no Event of Default has occurred and is continuing, and (b) such adjustment is carried out in

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a commercially reasonable and timely manner. In the event of a Casualty where the loss exceeds the Restoration Threshold or if an Event of Default then exists, Borrower may settle and adjust such claim only with the prior written consent of Lender (which consent shall not be unreasonably withheld or delayed) and Lender shall have the opportunity to participate, at Borrower’s cost, in any such adjustments; provided, however, if Borrower fails to settle and adjust such claim within sixty (60) days after the Casualty, Lender shall have the right to settle and adjust such claim at Borrower’s cost and without Borrower’s consent (provided that if Borrower has commenced the settlement and adjustment of such claim within the sixty (60) day period after the Casualty and thereafter diligently pursued the same, Lender shall not exercise such right to settle and adjust the claim until one hundred eighty (180) days after the Casualty so long as during the entirety of such period no Event of Default shall have occurred and be continuing and Borrower shall continue to diligently pursue the settlement and adjustment of such claim). Notwithstanding any Casualty, Borrower shall continue to pay the Debt at the time and in the manner provided for its payment in the Note and in this Agreement.

5.2.2           Condemnation. Borrower shall give Lender prompt notice of any actual or threatened Condemnation by any Governmental Authority of all or any part of the Property and shall deliver to Lender a copy of any and all papers served in connection with such proceedings. Provided no Event of Default has occurred and is continuing, in the event of a Condemnation where the amount of the taking does not exceed the Restoration Threshold, Borrower may settle and compromise such Condemnation; provided that the same is effected in a commercially reasonable and timely manner. In the event a Condemnation where the amount of the taking exceeds the Restoration Threshold or if an Event of Default then exists, Borrower may settle and compromise the Condemnation only with the prior written consent of Lender (which consent shall not be unreasonably withheld or delayed) and Lender shall have the opportunity to participate, at Borrower’s cost, in any litigation and settlement discussions in respect thereof and Borrower shall from time to time deliver to Lender all instruments requested by Lender to permit such participation. Borrower shall, at its expense, diligently prosecute any such proceedings, and shall consult with Lender, its attorneys and experts, and cooperate with them in the carrying on or defense of any such proceedings. Notwithstanding any Condemnation, Borrower shall continue to pay the Debt at the time and in the manner provided for its payment in the Note and in this Agreement. Lender shall not be limited to the interest paid on the Award by any Governmental Authority but shall be entitled to receive out of the Award interest at the rate or rates provided herein or in the Note. If the Property or any portion thereof is taken by any Governmental Authority, Borrower shall promptly commence and diligently prosecute the Restoration of the Property, regardless of whether an Award is available or made available, and otherwise comply with the provisions of Section 5.3. If the Property is sold, through foreclosure or otherwise, prior to the receipt by Lender of the Award, Lender shall have the right, whether or not a deficiency judgment on the Note shall have been sought, recovered or denied, to receive the Award, or a portion thereof sufficient to pay the Debt.

5.2.3           Casualty Proceeds.

(a)          Subject to Section 5.2.3(b), payments received on account of the business interruption insurance specified in Subsection 5.1.1(a)(iii) above shall be deposited directly into the Casualty and Condemnation Account. Notwithstanding the last sentence of Section 5.1.1(a)(iii) above, and provided that no Event of Default shall have occurred and be

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continuing, proceeds received by Lender on account of business or rental interruption or other loss of income insurance specified in Section 5.1.1(a)(iii) above shall be deposited by Lender into the Cash Management Account (in installments relating to the relevant period) to the extent such proceeds (or a portion thereof) reflect a replacement for lost Rents for the relevant period, as determined by Lender in good faith, and such proceeds shall be applied by Lender in accordance with Section 6.11 hereof. All other such proceeds not reflecting a replacement for lost Rents shall be held by Lender and disbursed in accordance with Section 5.3 hereof.

(b)          Notwithstanding anything to the contrary contained herein, if in connection with a Casualty any insurance carrier makes a payment under a property insurance Policy that Borrower proposes be treated as business or rental interruption insurance, then, notwithstanding any designation (or lack of designation) by the insurance carrier as to the purpose of such payment, as between Lender and Borrower, such payment shall not be treated as business or rental interruption Insurance Proceeds unless Borrower has demonstrated to Lender’s satisfaction that the remaining Net Proceeds that will be received from the property insurance carriers are sufficient to pay one hundred percent (100%) of the cost of fully restoring the Improvements or, if such Net Proceeds are to be applied repay the Loan in accordance with the terms hereof, that such remaining Net Proceeds will be sufficient to pay off the Debt in full.

Section 5.3           Delivery of Net Proceeds.

5.3.1           Minor Casualty or Condemnation. If a Casualty or Condemnation has occurred to the Property and the Net Proceeds shall be less than the Restoration Threshold and the costs of completing the Restoration shall be less than the Restoration Threshold, and provided no Event of Default shall have occurred and be continuing, and that the condition in Section 2.7 hereof has been satisfied, the Net Proceeds will be disbursed by Lender to Borrower. Promptly after receipt of the Net Proceeds, Borrower shall commence and satisfactorily complete with due diligence the Restoration in accordance with the terms of this Agreement. If any Net Proceeds are received by Borrower and may be retained by Borrower pursuant to the terms hereof, such Net Proceeds shall, until completion of the Restoration, be held for the benefit of Lender and shall be segregated from other funds of Borrower to be used to pay for the cost of Restoration in accordance with the terms hereof.

5.3.2           Major Casualty or Condemnation.

(a)          If a Casualty or Condemnation has occurred to the Property and the Net Proceeds are equal to or greater than the Restoration Threshold or the costs of completing the Restoration is equal to or greater than the Restoration Threshold, Lender shall make the Net Proceeds available for the Restoration, provided that each of the following conditions precedent are satisfied:

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

(ii)         (A) in the event the Net Proceeds consists of Insurance Proceeds received in connection with a Casualty, then (1) less than twenty-five percent (25%) of the total floor area of the Improvements at the Property has been damaged, destroyed or rendered unusable as a result of such Casualty and (2) Legal Requirements permit the restoration of the

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damaged, destroyed or unusable Improvements at the Property to the same configuration and occupancy that existed immediately preceding such Casualty or (B) in the event the Net Proceeds are an Award received in connection with a Condemnation, then less than ten percent (10%) of the land constituting the Property is taken, and such land is located along the perimeter or periphery of the Property, and no portion of the Improvements (other than any parking lot area, provided that without such area the Property will still comply with all applicable zoning requirements) is the subject of such Condemnation;

(iii)        intentionally omitted;

(iv)        the Franchise Agreement, the Intermediate Management Agreement, the Property Management, the Beverage Concession Agreement (if applicable), the Beverage Management Agreement (if applicable) and the REA shall remain in full force and effect during and after completion of the Restoration, notwithstanding the occurrence of such Casualty or Condemnation;

(v)         intentionally omitted;

(vi)        Borrower shall commence the Restoration as soon as reasonably practicable (but in no event later than ninety (90) days after such Casualty or Condemnation, whichever the case may be, occurs) and shall diligently pursue the same to satisfactory completion;

(vii)       Lender shall be reasonably satisfied that any operating deficits and all payments of principal and interest under the Note will be paid during the period required for Restoration from (A) the Net Proceeds, or (B) other funds of Borrower;

(viii)      Lender shall be reasonably satisfied that the Restoration will be completed on or before the earliest to occur of (A) the date six (6) months prior to the Stated Maturity Date, (B) the earliest date required for such completion under the terms of any Lease, (C) such time as may be required under applicable Legal Requirements in order to repair and restore the Property to the condition it was in immediately prior to such Casualty or Condemnation, as applicable, or (D) the expiration of the insurance coverage referred to in Section 5.1.1(a)(iii), without giving effect to any extended period of indemnity endorsement in respect of such coverage;

(ix)         the Property and the use thereof after the Restoration will be in compliance with and permitted under all applicable Legal Requirements;

(x)          the Restoration shall be done and completed by Borrower in an expeditious and diligent fashion and in compliance with all applicable Legal Requirements;

(xi)         such Casualty or Condemnation, as applicable, does not result in the loss of access to the Property or the related Improvements;

(xii)        Borrower shall deliver to Lender a signed, detailed budget approved in writing by Borrower’s architect or engineer stating the entire cost of completing the Restoration, which budget shall be acceptable to Lender;

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(xiii)       the Net Proceeds, together with any cash or cash equivalent deposited by Borrower with Lender are sufficient in Lender’s reasonable discretion to cover the cost of the Restoration;

(xiv)      the Debt Service Coverage Ratio, after giving effect to the Restoration, shall not be less than 1.35:1.00;

(xv)       the Loan to Value Ratio, after giving effect to the Restoration, shall not be greater than sixty-five percent (65%); and

(xvi)      the condition set forth in Section 2.10 hereof shall have been satisfied.

(b)          The Net Proceeds shall be paid directly to Lender for deposit into the Casualty and Condemnation Account and, until disbursed in accordance with the provisions of this Section 5.3.2, shall constitute additional security for the Obligations. The Net Proceeds shall be disbursed by Lender to, or as directed by, Borrower from time to time during the course of the Restoration, upon receipt of evidence satisfactory to Lender that (i) all requirements set forth in Section 5.3.2(a) have been satisfied, (ii) all materials installed and work and labor performed (except to the extent that they are to be paid for out of the requested disbursement) in connection with the Restoration have been paid for in full, and (iii) there exist no notices of pendency, stop orders, mechanics’ or materialman’s liens or notices of intention to file same, or any other liens or encumbrances of any nature whatsoever on the Property arising out of the Restoration which have not either been fully bonded to the satisfaction of Lender and discharged of record or in the alternative fully insured to the satisfaction of Lender by the title company issuing the Title Insurance Policy.

(c)          All plans and specifications required in connection with the Restoration shall be subject to the prior written approval of Lender (not to be unreasonably withheld, conditioned or delayed) and an independent architect selected by Lender (the “Casualty Consultant”). The plans and specifications shall require that the Restoration be completed in a first-class workmanlike manner at least equivalent to the quality and character of the original work in the Improvements (provided, however, that in the case of a partial Condemnation, the Restoration shall be done to the extent reasonably practicable after taking into account the consequences of such partial Condemnation), so that upon completion thereof, the Property shall be at least equal in value and general utility to the Property prior to the Casualty or Condemnation, as applicable; it being understood, however, that Borrower shall not be obligated to restore the Property to the precise condition of the Property prior to such Casualty or Condemnation, as applicable, provided the Property is restored, to the extent practicable, to be of at least equal value and of substantially the same character as prior to the Casualty or Condemnation, as applicable. Borrower shall restore all Improvements such that when they are fully restored and/or repaired, such Improvements and their contemplated use fully comply with all applicable material Legal Requirements. 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 the approval of Lender (not to be unreasonably withheld, conditioned or delayed) and the Casualty Consultant. All reasonable, out-of-pocket costs and expenses incurred by Lender in connection with recovering, holding and advancing the Net

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Proceeds for the Restoration, including reasonable attorneys’ fees and disbursements and the Casualty Consultant’s fees and disbursements, shall be paid by Borrower.

(d)          In no event shall Lender be obligated to make disbursements of the Net Proceeds in excess of an amount equal to the costs actually incurred from time to time for work in place as part of the Restoration, as certified by the Casualty Consultant, less the Casualty Retainage. The term “Casualty Retainage” shall mean, as to each contractor, subcontractor or materialman engaged in the Restoration, an amount equal to ten percent (10%) of the costs actually incurred for work in place as part of the Restoration, as certified by the Casualty Consultant, until the Restoration has been completed. The Casualty Retainage shall in no event, and notwithstanding anything to the contrary set forth above in this Section 5.3.2(d), be less than the amount actually held back by Borrower from contractors, subcontractors and materialmen engaged in the Restoration. The Casualty Retainage shall not be released until the Casualty Consultant certifies to Lender that the Restoration has been completed in accordance with the provisions of this Article 5 and that all approvals necessary for the re-occupancy and use of the Property have been obtained from all appropriate Governmental Authorities, and Lender receives evidence satisfactory to Lender that the costs of the Restoration have been paid in full or will be paid in full out of the Casualty Retainage; provided, however, that Lender shall release the portion of the Casualty Retainage being held with respect to any contractor, subcontractor or materialman engaged in the Restoration as of the date upon which (i) the Casualty Consultant certifies to Lender that such contractor, subcontractor or materialman has satisfactorily completed all work and has supplied all materials in accordance with the provisions of such contractor’s, subcontractor’s or materialman’s contract, (ii) the contractor, subcontractor or materialman delivers the lien waivers and evidence of payment in full of all sums due to the contractor, subcontractor or materialman as may be reasonably requested by Lender or by the title company issuing the Title Insurance Policy, and (iii) Lender receives an endorsement to the Title Insurance Policy insuring the continued priority of the Lien of the Security Instruments and evidence of payment of any premium payable for such endorsement. If required by Lender, the release of any such portion of the Casualty Retainage shall be approved by the surety company, if any, which has issued a payment or performance bond with respect to the contractor, subcontractor or materialman.

(e)          Lender shall not be obligated to make disbursements of the Net Proceeds more frequently than once every calendar month.

(f)          If at any time the Net Proceeds or the undisbursed balance thereof shall not, in the reasonable opinion of Lender in consultation with the Casualty Consultant, be sufficient to pay in full the balance of the costs which are estimated by the Casualty Consultant to be incurred in connection with the completion of the Restoration, Borrower shall deposit the deficiency (the “Net Proceeds Deficiency”) with Lender (for deposit into the Casualty and Condemnation Account) before any further disbursement of the Net Proceeds shall be made. The Net Proceeds Deficiency deposited with Lender shall be deposited by Lender into the Casualty and Condemnation Account 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 5.3.2 shall constitute additional security for the Obligations.

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(g)          Provided no Event of Default shall have occurred and be continuing, the excess, if any, of the Net Proceeds and the remaining balance, if any, of the Net Proceeds Deficiency deposited with Lender after the Casualty Consultant certifies to Lender that the Restoration has been completed in accordance with the provisions of this Section 5.3.2, and the receipt by Lender of evidence satisfactory to Lender that all costs incurred in connection with the Restoration have been paid in full, shall be deposited into the Cash Management Account to be applied in accordance with Section 6.11.1; provided, however, the amount of such excess so deposited in the case of a Condemnation shall not exceed the amount of Net Proceeds Deficiency deposited by Borrower with the balance being applied to the Debt in the manner provided for in subsection 5.3.2(h).

(h)          All Net Proceeds not required (i) to be made available for the Restoration or (ii) to be returned to Borrower as excess Net Proceeds pursuant to Section 5.3.2(g) may be retained and applied by Lender toward the payment of the Debt, whether or not then due and payable, in such order, priority and proportions as Lender in its sole discretion shall deem proper.

Article 6: CASH MANAGEMENT AND RESERVE FUNDS

Section 6.1           Cash Management Arrangements. Each Borrower shall cause all Rents and other Gross Revenue (other than payments received on account of the business interruption insurance specified in Subsection 5.1.1(a)(iii), which shall be governed by Section 5.2.3) to be transmitted by (a) credit card clearing banks with which Borrower, Property Manager or Intermediate Manager has entered into agreements for the clearance of credit card receipts (collectively, “Credit Card Banks”) and credit card companies with which Borrower, Property Manager or Intermediate Manager has entered into merchants agreements (collectively, “Credit Card Companies”) and (b) any Tenants of the Property, in each case, directly into the applicable Clearing Account established and maintained by or on behalf of Borrower at a local bank selected by Borrower and reasonably approved by Lender (the “Clearing Bank”) as more fully described in the Clearing Account Agreement. Without in any way limiting the foregoing, from and after the date hereof, Borrower shall notify and advise each Tenant under each Lease (whether such Lease is presently effective or executed after the date hereof) to send directly to the Clearing Account all payments of Rent pursuant to an instruction letter in the form of Exhibit B attached hereto (a “Tenant Direction Letter”). Without in any way limiting the foregoing, Borrower shall instruct and shall continuously hereafter instruct each of the Credit Card Banks and the Credit Card Companies that all credit card receipts with respect to the Property (net of any expenses charged for such processing) cleared by such Credit Card Banks or Credit Card Companies, as applicable, shall be transferred by such Credit Card Banks or Credit Card Companies, as applicable, by wire transfer or the ACH System to the Clearing Bank for deposit in the Clearing Account pursuant to an instruction letter in the form of Exhibit C hereto (a “Credit Card Bank Payment Direction Letter”) or Exhibit D hereto (a “Credit Card Company Payment Direction Letter”), as applicable. Borrower hereby represents and warrants that Borrower has delivered or caused to be delivered Credit Card Bank Payment Direction Letters and Credit Card Payment Direction Letters to each of the Credit Card Banks and Credit Card Companies, as applicable. If, notwithstanding the provisions of this Section 6.1, Borrower, Property Manager or Intermediate Manager receive any Gross Revenue from the Property, then (i) such amounts shall be deemed to be collateral for the Obligations and shall be

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held in trust for the benefit, and as the property, of Lender, (ii) such amounts shall not be commingled with any other funds or property of Borrower, Property Manager or Intermediate Manager (except in accordance with the Clearing Account Agreement and the Cash Management Agreement), and (iii) Borrower, Property Manager or Intermediate Manager shall deposit such amounts in the Clearing Account within one Business Day of receipt; provided, however, so long as the Property Management Agreement relating to the Properties located in Indianapolis, Indiana, Knoxville, Tennessee and Naperville, Illinois, as applicable, shall have not been terminated, cash receipts received for Properties located in Indianapolis, Indiana, Knoxville, Tennessee and Naperville, Illinois may be deposited in a Borrower account established by the applicable Property Manager (as agent for Borrower), so long as such receipts in excess of $1,000.00 for each account are transferred by wire transfer to the Clearing Account no less frequently than each calendar week.

Funds deposited into the Clearing Account shall be swept by the Clearing Bank on a daily basis into an Eligible Account at the Cash Management Bank controlled by Lender (the “Cash Management Account”) and applied and disbursed in accordance with this Agreement and the Cash Management Agreement. Funds in the Cash Management Account may be invested in Permitted Investments, as more particularly set forth in the Cash Management Agreement. As an alternative to establishing each Account required pursuant to the terms of this Agreement as a separate Eligible Account, Lender may also establish or cause to be established subaccounts of the Cash Management Account or the other Accounts described herein which shall at all times be Eligible Accounts (and may be ledger or book entry accounts and not actual accounts) whereupon all provisions of this Agreement referring to (i) any Account shall be deemed to apply instead to the corresponding subaccount and (ii) to the Accounts generally shall be deemed to apply instead to the Cash Management Account or any other Account described herein. The Clearing Account, the Cash Management Account and all other Accounts shall be under the sole control and dominion of Lender, and Borrower shall have no right of withdrawal therefrom. Borrower shall pay for all expenses of opening and maintaining all of the above accounts. In the event of a resignation by Clearing Bank, Borrower shall, promptly after receipt of notice of such resignation, designate a successor to Clearing Bank, which successor shall be subject to the reasonable approval of Lender, cause the execution of a replacement Clearing Account Agreement in form and substance satisfactory to Lender and deliver Credit Card Bank Payment Direction Letters and Credit Card Company Payment Direction Letters to the Credit Card Banks and/or Credit Card Companies, as applicable, and Tenant Direction Letters to any Tenants in accordance with the terms and provisions of this Section 6.1.

Section 6.2           Required Repairs Funds.

6.2.1           Deposit of Required Repairs Funds. Borrower shall perform the repairs and other work at the Property as set forth on Schedule V attached hereto (such repairs and other work hereinafter referred to as “Required Repairs”) and shall complete each of the Required Repairs on or before the respective deadline for each repair as set forth on Schedule V. On the Closing Date, Borrower shall deposit or cause to be deposited with or on behalf of Lender the amount set forth on such Schedule V to perform the Required Repairs (the “Required Repairs Funds”), which Required Repairs Funds shall be transferred by or at the direction of Lender into an Account established to hold such funds (the “Required Repairs Account”).

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6.2.2           Release of Required Repairs Funds.

(a)          Lender shall, or shall direct Servicer to, disburse the Required Repairs Funds to Borrower out of the Required Repairs Account upon satisfaction by Borrower of each of the Reserve Disbursement Conditions with respect to each such disbursement. Lender shall not be required to disburse Required Repairs Funds more frequently than once each calendar month, and each disbursement of Required Repairs Funds must be in an amount not less than the Minimum Disbursement Amount (or a lesser amount if the total amount of Required Repairs Funds is less than the Minimum Disbursement Amount, in which case only one disbursement of the amount remaining in the account shall be made). Upon Borrower’s completion of all Required Repairs in accordance with this Section 6.2, Lender shall, or shall direct Servicer to, deposit any remaining Required Repairs Funds held in the Required Repairs Account into the Cash Management Account to be applied in accordance with Section 6.11.1.

(b)          Nothing in this Section 6.2.2 shall (i) make Lender responsible for performing or completing any Required Repairs; (ii) require Lender to expend funds in addition to the Required Repairs Funds to complete any Required Repairs; (iii) obligate Lender to proceed with any Required Repairs; or (iv) obligate Lender to demand from Borrower additional sums to complete any Required Repairs.

(c)          Borrower shall permit Lender and Lender’s agents and representatives (including Lender’s engineer, architect or inspector) or third parties to enter onto the Property during normal business hours (subject to the rights of Tenants under their Leases) to inspect the progress of any Required Repairs and all materials being used in connection therewith and to examine all plans and shop drawings relating to such Required Repairs. Borrower shall cause all contractors and subcontractors to cooperate with Lender or Lender’s representatives or such other Persons described above in connection with inspections described in this Section 6.2.2(c)).

(d)          If a disbursement of Required Repair Funds will exceed $25,000.00, Lender may require an inspection of the Property at Borrower’s expense prior to making a disbursement of Required Repairs Funds in order to verify completion of the Required Repairs for which reimbursement is sought. Lender may require that such inspection be conducted by an appropriate independent qualified professional selected by Lender and may require a certificate of completion by an independent qualified professional acceptable to Lender prior to the disbursement of Required Repairs Funds. Borrower shall pay the expense of the inspection as required hereunder, whether such inspection is conducted by Lender or by an independent qualified professional.

(e)          In addition to any insurance required under the Loan Documents, Borrower shall provide or cause to be provided workmen’s compensation insurance, builder’s risk insurance, public liability insurance and other insurance to the extent required under applicable law in connection with the Required Repairs. All such policies shall be in form and amount satisfactory to Lender.

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Section 6.3           Tax Funds.

6.3.1           Deposits of Tax Funds. Borrower shall deposit or cause to be deposited with or on behalf of Lender (a) on the Closing Date, the amount of Two Hundred Forty Nine Thousand Forty Five and 78/100 Dollars ($249,045.78) and (b) on each Monthly Payment Date, an amount equal to one-twelfth of the Taxes that Lender estimates will be payable during the next ensuing twelve (12) months in order to accumulate sufficient funds to pay all such Taxes at least ten (10) days prior to their respective due dates, which amounts shall be transferred by or at the direction of Lender into an Account established to hold such funds (the “Tax Account”). Amounts deposited from time to time into the Tax Account pursuant to this Section 6.3.1 are referred to herein as the “Tax Funds”. If at any time, Lender reasonably determines that the Tax Funds will not be sufficient to pay the Taxes, Lender shall notify Borrower in writing of such determination and the monthly deposits for Taxes shall be increased by the amount that Lender estimates is sufficient to make up the deficiency at least ten (10) days prior to the respective due dates for the Taxes; provided that if Borrower receives written notice of any deficiency after the date that is ten (10) days prior to the date that Taxes are due, Borrower will deposit with or on behalf of Lender, such amount within two Business Days after its receipt of such notice.

6.3.2           Release of Tax Funds. Provided no Event of Default shall have occurred and be continuing, Lender shall, or shall direct Servicer to, apply the Tax Funds, if any, in the Tax Account to payments of Taxes. In making any payment relating to Taxes, Lender may do so according to any bill, statement or estimate procured from the appropriate public office (with respect to Taxes) without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax, assessment, sale, forfeiture, tax lien or title or claim thereof. If at any time the amount of the Tax Funds shall exceed the amounts due for Taxes, Lender shall, or shall direct Servicer to, deposit such excess (as determined by Lender in its reasonable discretion) into the Cash Management Account to be applied in accordance with Section 6.11.1 or credit such excess against future payments to be made to the Tax Funds, such election to be made by Lender in its sole discretion. Any Tax Funds remaining in the Tax Account after the Obligations have been paid in full shall be returned to Borrower.

Section 6.4           Insurance Funds.

6.4.1           Deposits of Insurance Funds. Subject to Section 6.4.3, Borrower shall deposit or cause to be deposited with or on behalf of Lender on each Monthly Payment Date, an amount equal to one-twelfth of the Insurance Premiums that Lender estimates will be payable for the renewal of the coverage afforded by the Policies upon the expiration thereof in order to accumulate sufficient funds to pay all such Insurance Premiums at least thirty (30) days prior to the expiration of the Policies, which amounts shall be transferred by or at the direction of Lender into an Account established to hold such funds (the “Insurance Account”). Amounts deposited from time to time into the Insurance Account pursuant to this Section 6.4.1 are referred to herein as the “Insurance Funds”. If at any time, Lender reasonably determines that the Insurance Funds will not be sufficient to pay the Insurance Premiums, Lender shall notify Borrower in writing of such determination and the monthly deposits for Insurance Premiums shall be increased by the amount that Lender estimates is sufficient to make up the deficiency at least thirty (30) days prior to expiration of the Policies; provided that if Borrower receives written notice of any deficiency after the date that is thirty (30) days prior to expiration of the Policies,

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Borrower will deposit with or on behalf of Lender, such amount within two Business Days after its receipt of such notice.

6.4.2           Release of Insurance Funds. Provided no Event of Default shall have occurred and be continuing, Lender shall, or shall direct Servicer to, apply the Insurance Funds, if any, in the Insurance Account to payment of Insurance Premiums. In making any payment relating to Insurance Premiums, Lender may do so according to any bill, statement or estimate procured from the insurer or its agent, without inquiry into the accuracy of such bill, statement or estimate. If at any time the amount of the Insurance Funds shall exceed the amounts due for Insurance Premiums, Lender shall, or shall direct Servicer to, deposit such excess (as determined by Lender in its reasonable discretion) into the Cash Management Account to be applied in accordance with Section 6.11.1 or credit such excess against future payments to be made to the Insurance Funds, such election to be made by Lender in its sole discretion. Any Insurance Funds remaining in the Insurance Account after the Obligations have been paid in full shall be returned to Borrower.

6.4.3           Blanket Insurance. Lender shall suspend Borrower’s obligations under this Section 6.4 to the extent that Lender is reasonably satisfied, based on evidence provided by Borrower from time to time, that all of the Property is covered by a blanket insurance program that provides insurance meeting the requirements of this Agreement and Lender’s other customary requirements for blanket insurance programs, and that the premiums under such blanket insurance program are being paid when due. Borrower shall, no less than ten (10) days prior to the annual expiration date of any such blanket insurance program, provide evidence of the renewal of such program together with such additional evidence as Lender may demand from time to time.

Section 6.5           FF&E Funds.

6.5.1           Deposits of FF&E Funds. Borrower shall deposit or cause to be deposited with or on behalf of Lender on each Monthly Payment Date, an amount equal to the greater of (i) one-twelfth of four percent (4%) of the greater of (A) the Gross Revenue generated during the twelve (12) month period ending on the last day of the most recent calendar quarter for which Borrower has furnished financial statements pursuant to Section 4.1.7(c) hereof and (B) the Gross Revenue projected in the then-effective Approved Annual Budget for the twelve (12) month period to which such Approved Annual Budget relates; provided, however, in the event that the Annual Budget has not been approved by Lender under Section 4.1.7(e) for the applicable period in which Monthly Payment Date occurs and/or Borrower has failed to timely deliver the financial statements required pursuant to this Agreement, Lender shall determine the amount of Gross Revenue in its sole and absolute discretion, and (ii) the amount, if any, required to be reserved under the Franchise Agreement, the Intermediate Management Agreement, the Property Management Agreement, the Beverage Concession Agreement and the Beverage Management Agreement for FF&E Work, which amounts shall be transferred by or at the direction of Lender into an Account established to hold such funds (the “FF&E Account”). Amounts deposited from time to time into the FF&E Account pursuant to this Section 6.5.1 are referred to herein as the “FF&E Funds”. Lender may reassess its estimate of the amount necessary for FF&E Work from time to time, and may require Borrower to increase the monthly deposits required pursuant to this Section 6.5.1 upon thirty (30) days’ notice to Borrower if

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Lender determines in its reasonable discretion that an increase is necessary to maintain proper operation of the Property (provided, however, that so long as no Event of Default then exists, no such increase shall cause the annual payments under this Section 6.5.1 to exceed an amount equal to five percent (5%) of Gross Revenue in any twelve-month period unless required by any Franchise Agreement.

6.5.2           Release of FF&E Funds.

(a)          Lender shall, or shall direct Servicer to, disburse the FF&E Funds to Borrower out of the FF&E Account provided (i) such disbursement is for (A) FF&E Work incurred in connection with an Approved FF&E Expense or (B) PIP Alterations contemplated by the applicable PIP Plans and (ii) Borrower shall have satisfied each of the Reserve Disbursement Conditions with respect to each such disbursement. Lender shall not be required to disburse FF&E Funds more frequently than once each calendar month, and each disbursement of FF&E Funds must be in an amount not less than the Minimum Disbursement Amount (or a lesser amount if the total amount of FF&E Funds is less than the Minimum Disbursement Amount, in which case only one disbursement of the amount remaining in the account shall be made). Lender shall not be obligated to make disbursements of FF&E Funds to reimburse Borrower for the costs of routine maintenance to the Property, replacements of inventory or for costs which are to be reimbursed from the Required Repair Funds.

(b)          Nothing in this Section 6.5.2 shall (i) make Lender responsible for performing or completing any FF&E Work; (ii) require Lender to expend funds in addition to the FF&E Funds to complete any FF&E Work; (iii) obligate Lender to proceed with any FF&E Work; or (iv) obligate Lender to demand from Borrower additional sums to complete any FF&E Work.

(c)          Borrower shall permit Lender and Lender’s agents and representatives (including Lender’s engineer, architect or inspector) or third parties to enter onto the Property during normal business hours (subject to the rights of Tenants under their Leases) to inspect the progress of any FF&E Work and all materials being used in connection therewith and to examine all plans and shop drawings relating to such FF&E Work. Borrower shall cause all contractors and subcontractors to cooperate with Lender or Lender’s representatives or such other Persons described above in connection with inspections described in Section 6.5.2(d).

(d)          If a disbursement of FF&E Funds will exceed $25,000.00, Lender may require an inspection of the Property at Borrower’s expense prior to making a disbursement of FF&E Funds in order to verify completion of the FF&E Work for which reimbursement is sought. Lender may require that such inspection be conducted by an appropriate independent qualified professional selected by Lender and may require a certificate of completion by an independent qualified professional acceptable to Lender prior to the disbursement of FF&E Funds. Borrower shall pay the actual and reasonable out-of-pocket expense of the inspection as required hereunder, whether such inspection is conducted by Lender or by an independent qualified professional.

(e)          In addition to any insurance required under the Loan Documents, Borrower shall provide or cause to be provided workmen’s compensation insurance, builder’s

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risk, public liability insurance and other insurance to the extent required under applicable law in connection with FF&E Work. All such policies shall be in form and amount satisfactory to Lender.

Section 6.6           PIP Reserve.

6.6.1           Deposit of PIP Reserve Funds. (a) Borrowers shall deposit or cause to be deposited with or on behalf of Lender funds at the times and in the amounts specified in the PIP Reserve Funding Schedule attached hereto as Schedule XIV; (b) Borrower shall deposit or cause to be deposited with or on behalf of Lender such additional amounts as Lender from time to time reasonably determines is necessary to cover any increases in a PIP Budget, any additional PIP Alterations required by a Franchisor under a PIP Plan or any modification to a PIP Plan or to cover PIP Alterations contemplated by any new PIP plan imposed by a Franchisor, and the cost of any repairs, maintenance, alterations, or improvements demanded by a Franchisor pursuant to a Franchise Agreement; and (c) all amounts to be deposited in the PIP Reserve Account during a Cash Sweep Event Period pursuant to Section 6.11.1(a)(viii) shall be deposited directly by or at the direction of Lender, into an Account established to hold such funds (the “PIP Reserve Account”). Amounts deposited from time to time in the PIP Reserve Account pursuant to this Section 6.6.1 are referred to herein as the “PIP Reserve Funds” and shall be disbursed to fund PIP Alterations at the Properties from time to time in accordance with the PIP Plans and the terms and provisions of Section 6.6.2 hereof.

6.6.2           Release of PIP Reserve Funds.

(a)          Lender shall, or shall direct Servicer to, disburse the PIP Reserve Funds to Borrowers out of the PIP Reserve Account provided that (i) such disbursement is for PIP Alterations contemplated by the applicable PIP Plans; (ii) the applicable Borrower for whom such disbursement is made shall have satisfied each of the Reserve Disbursement Conditions with respect to such disbursement; (iii) Lender shall not be required to disburse PIP Reserve Funds more frequently than once each calendar month; (iv) each disbursement of PIP Reserve Funds must be in an amount not less than the Minimum Disbursement Amount (or a lesser amount if the total amount of PIP Reserve Funds is less than the Minimum Disbursement Amount, in which case only one disbursement of the amount remaining in the PIP Reserve Account shall be made); (v) each request for PIP Reserve Funds to be disbursed to Borrowers shall include a statement as to which PIP Budget line items are to be funded and what portion of the applicable PIP Budget remains unfunded, and (vi) in no event shall such PIP Reserve Funds be requisitioned or disbursed in connection with the PIP Plan and/or PIP Alterations related to the Property located in Stratford, Connecticut.

(b)          Nothing in this Section 6.6.2 shall (i) make Lender responsible for performing or completing any PIP Alterations; (ii) require Lender to expend funds in addition to the PIP Reserve Funds to complete any PIP Alterations; (iii) obligate Lender to proceed with any PIP Alterations; or (iv) obligate Lender to demand from Borrowers additional sums to complete any PIP Alterations.

(c)          Each Borrower shall permit Lender and Lender’s agents and representatives (including Lender’s engineer, architect or inspector) to enter onto Borrower’s

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Property during normal business hours upon reasonable notice (subject to the rights of guests or invitees of such Property) to inspect the progress of any PIP Alterations and all materials being used in connection therewith and to examine all plans and shop drawings relating to such PIP Alterations. Each Borrower shall cause all applicable contractors and subcontractors to cooperate with Lender or Lender’s agents or representatives described above in connection with inspections described in this Section 6.6.2(c)).

(d)          In addition to any insurance required under the Loan Documents, each Borrower shall provide or cause to be provided workmen’s compensation insurance, builder’s risk insurance, public liability insurance and other insurance to the extent required under applicable law in connection with the PIP Alterations to such Borrower’s Property. All such policies shall be in form and amount satisfactory to Lender.

Section 6.7           Intentionally Omitted.

Section 6.8           Operating Expenses.

6.8.1           Hilton Brand Managed Properties. On each Monthly Payment Date, an amount sufficient to pay the Monthly Operating Expense Budgeted Amount in respect of all Hilton Brand Managed Properties (together with additional funds, if any, for monthly Approved Operating Expenses not set forth in the Approved Annual Budget as requested by Borrower pursuant to the definition of Approved Operating Expenses, as well as monthly Extraordinary Expenses requested by Borrower and approved by Lender in accordance with the terms hereof) (but without duplication for any expenses to be funded with amounts deposited to the other Reserve Funds) shall be transferred by or at the direction of Lender into an Account established to hold such funds (the “Hilton Brand Operating Expense Account”). Amounts deposited from time to time into the Hilton Brand Operating Expense Account pursuant to this Section 6.8.1 are referred to herein as the “Hilton Brand Operating Expense Funds”. At all times, without regard of whether an Event of Default shall have occurred and be continuing, Lender shall, or shall direct Servicer to, disburse Hilton Brand Operating Expense Funds to the Property Manager in respect of such Hilton Brand Managed Properties out of the Hilton Brand Operating Expense Account promptly following each Monthly Payment Date for the payment of Approved Operating Expenses at such Hilton Brand Managed Properties and any Extraordinary Expenses requested by Borrower and approved by Lender in accordance with the terms hereof, in each case for the applicable monthly period.

6.8.2           Other Properties. On each Monthly Payment Date, an amount sufficient to pay the Monthly Operating Expense Budgeted Amount in respect of all Properties, exclusive of any Hilton Brand Managed Properties (together with additional funds, if any, for monthly Approved Operating Expenses not set forth in the Approved Annual Budget as requested by Borrower pursuant to the definition of Approved Operating Expenses, as well as monthly Extraordinary Expenses requested by Borrower and approved by Lender in accordance with the terms hereof) (but without duplication for any expenses to be funded with amounts deposited to the other Reserve Funds) shall be transferred by or at the direction of Lender into an Account established to hold such funds (the “Non Hilton Operating Expense Account”; and the Hilton Brand Operating Expense Account together with the Non Hilton Operating Expense Account, collectively, the “Operating Expense Account”) to the extent there are amounts

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remaining in the Cash Management Account after deposits for items (a)(i) through (a)(v) of Section 6.11.1. Amounts deposited from time to time into the Non Hilton Operating Expense Account pursuant to this Section 6.8.2 are referred to herein as the “Non Hilton Operating Expense Funds”; and the Hilton Brand Operating Expense Funds, together with the Non Hilton Operating Expense Funds, collectively, the “Operating Expense Funds”). Provided no Event of Default shall have occurred and be continuing, Lender shall, or shall direct Servicer to, disburse Non Hilton Operating Expense Funds to Borrower out of the Operating Expense Account promptly following each Monthly Payment Date for the payment of Approved Operating Expenses at such Properties, exclusive of the Hilton Brand Managed Properties, and any Extraordinary Expenses requested by Borrower and approved by Lender in accordance with the terms hereof, in each case for the applicable monthly period.

Section 6.9           Excess Cash Flow Funds. Subject to any deposits required to be made to the PIP Reserve Account pursuant to Section 6.11.1(a)(viii), during the continuance of a Cash Sweep Event Period, Borrower shall deposit or cause to be deposited with or on behalf of Lender all Excess Cash Flow, which amounts shall be transferred by the Cash Management Bank into an Account established to hold such funds (the “Excess Cash Flow Account”) and held as additional security for the Loan; provided, however, that to the extent that a Cash Sweep Event is caused solely by occurrences of events described in clause (iv) in the definition of “Cash Sweep Event” with respect to less than all the Properties (i.e., a particular Property or particular Properties) (a “Franchise Agreement Cash Sweep Event”), Borrower’s obligation to deposit Excess Cash Flow into the Excess Cash Flow Account shall not exceed the sum of the Franchise Cash Sweep Event Caps for each such Property or Properties. Amounts deposited from time to time into the Excess Cash Flow Account pursuant to this Section 6.9 are referred to herein as the “Excess Cash Flow Funds”. Provided no Event of Default shall have occurred and be continuing, any Excess Cash Flow Funds remaining in the Excess Cash Flow Account upon the occurrence of a Cash Sweep Event Cure shall be deposited into the Cash Management Account to be applied in accordance with Section 6.11.1.

Section 6.10         Security Interest in Reserve Funds; Reserve Funds Generally.

6.10.1         Grant of Security Interest. Borrower hereby pledges, assigns and grants a security interest to Lender, as security for the payment and performance of the Obligations, in all of Borrower’s right, title and interest in and to any and all monies, checks, notes, bonds, money orders, letters of credit, other instruments and other investment property now or hereafter deposited or held in the Reserve Funds. The Reserve Funds shall be under the sole dominion and control of Lender. The Reserve Funds shall not constitute a trust fund and may be commingled with other monies held by Lender.

6.10.2         Interest on Certain Reserve Funds; Income Taxes. All Reserve Funds may be invested in Permitted Investments as directed by Lender in accordance with the terms of the Cash Management Agreement. Borrower acknowledges and agrees that the availability of and return on certain Permitted Investments depends, in part, upon the availability of Permitted Investments to the Cash Management Bank, the size of the balance of the applicable Reserve Funds and/or the frequency of deposits into and withdrawals from the Reserve Funds and that certain Permitted Investments may be or become unavailable from time to time with respect to the Reserve Funds for a variety of reasons, including, without limitation, any of the foregoing

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factors. Borrower acknowledges and agrees that the interest or income received on the Reserve Funds may not be the highest return available on cash-based investments and further acknowledges and agrees that none of Lender, any Servicer of the Loan, the Cash Management Bank or any of their respective agents or representatives shall be obligated to seek the highest return available on cash-based investments and none of Lender, any Servicer of the Loan, the Cash Management Bank or any of their respective agents or representatives shall be liable for any loss sustained on the investment of any funds constituting the Reserve Funds. Borrower shall deposit with Lender an amount equal to any actual losses sustained on the investment of any funds constituting the Reserve Funds within two Business Days of Lender’s notice. All earnings or interest on each of the Reserve Funds (other than the Tax Funds and the Insurance Funds) shall be and become part of the respective Reserve Fund and shall be disbursed as provided in the paragraph(s) of this Agreement applicable to each such Reserve Fund. All earnings and interest on the Tax Funds and the Insurance Funds shall be the sole property of and paid to Lender. Borrower shall report on its federal, state, commonwealth, district and local income tax returns all interest or income accrued on the Reserve Funds (other than the Tax Funds and the Insurance Funds).

6.10.3         Prohibition Against Further Encumbrance. No Borrower shall, without the prior written consent of Lender, further pledge, assign or grant any security interest in the Reserve Funds or permit any Lien or encumbrance to attach thereto, or any levy to be made thereon, or any UCC-1 Financing Statements, except those naming Lender as the secured party, to be filed with respect thereto.

Section 6.11         Property Cash Flow Allocation.

6.11.1         Order of Priority of Funds in Cash Management Account.

(a)          Subject to the other provisions of the Loan Documents, on each Monthly Payment Date during the Term, except during the continuance of an Event of Default, all funds deposited into the Cash Management Account during the immediately preceding Interest Period shall be applied on such Monthly Payment Date in the following order of priority:

(i)          First, to make the required payments of Hilton Brand Operating Expense Funds into the Hilton Brand Operating Expense Account, as required under Section 6.8.1 (taking into account any funds that were previously deposited into the Hilton Brand Operating Expense Account for application on such Monthly Payment Date pursuant to Section 6.11.1(b)(i) below);

(ii)         then, to make the required payments of Tax Funds into the Tax Account as required under Section 6.3 (taking into account any funds that were previously deposited into the Tax Account for application on such Monthly Payment Date pursuant to Section 6.11.1(b)(ii) below);

(iii)        then, to make the required payments of Insurance Funds into the Insurance Account as required under Section 6.4 (taking into account any funds that were previously deposited into the Insurance Account for application on such Monthly Payment Date pursuant to Section 6.11.1(b)(iii) below);

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(iv)        then, funds sufficient to pay the Monthly Debt Service Payment into an Account established for such purpose (taking into account any funds that were previously deposited into an Account established for such purpose for application on such Monthly Payment Date pursuant to Section 6.11.1(b)(iv) below);

(v)         then, funds sufficient to pay any interest accruing at the Default Rate, late payment charges and all other amounts, other than those described under other clauses of this Section 6.11.1, then due to Lender and/or any Indemnified Party under the Loan Documents into an Account established for such purpose (taking into account any funds that were previously deposited into an Account established for such purpose for application on such Monthly Payment Date pursuant to Section 6.11.1(b)(v) below);

(vi)        then, to make the required payments of Non Hilton Operating Expense Funds into the Non Hilton Operating Expense Account as required under Section 6.8.2 (taking into account any funds that were previously deposited into the Non Hilton Brand Operating Expense Account for application on such Monthly Payment Date pursuant to Section 6.11.1(b)(vi) below);

(vii)       then, to make the required payments of FF&E Funds into the FF&E Account as required under Section 6.5 (taking into account any funds that were previously deposited into the FF&E Account for application on such Monthly Payment Date pursuant to Section 6.11.1(b)(vii) below);

(viii)      then, during the continuance of a Cash Sweep Event Period triggered by the occurrence of clause (v) in the definition of “Cash Sweep Event”, to the PIP Reserve Account as required under Section 6.6.1 until such time as the Cash Sweep Event Cure related to such Cash Sweep Event shall have been satisfied;

(ix)         then, during the continuance of a Cash Sweep Event Period, all amounts remaining in the Cash Management Account after deposits for items (a)(i) through (a)(viii) above (the “Excess Cash Flow”) into the Excess Cash Flow Account as required under Section 6.9 (provided that for so long as the Cash Sweep Event Period is caused solely by a Franchise Agreement Cash Sweep Event, Excess Cash Flow shall be deposited into the Excess Cash Flow Account only to the extent required by Section 6.9); and

(x)          Lastly, provided no Cash Sweep Event Period shall then be in effect, payments to, or as directed by, Borrowers of all Excess Cash Flow.

(b)          In addition to the foregoing, subject to the other provisions of the Loan Documents (permitting disbursements from Accounts other than during a Sweep Event Period), on March 20, 2015 and thereafter on the fifteenth (15th) day following each Monthly Payment Date during the Term (or on the succeeding Business Day if such fifteenth (15th) day is not a Business Day) (the “Interim Disbursement Date”), and only if no Event of Default has occurred and is then continuing and no Cash Sweep Period is then continuing, all funds deposited into the Deposit Account since the last Monthly Payment Date shall be applied on such Interim Disbursement Date in the following order of priority:

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(i)          First, to make a deposit into the Hilton Brand Operating Expense Account in an amount equal to the payment of Hilton Brand Operating Expenses that will be required to be made under Section 6.8.1 on the next Monthly Payment Date;

(ii)         then, to make a deposit into the Tax Account in an amount equal to the payment of Tax Funds that will be required to made under Section 6.3 on the next Monthly Payment Date (provided, that the foregoing deposit shall not be made on March 20, 2015 because the payment of Tax Funds that will be required to be made on the next Monthly Payment Date (which is the First Monthly Payment Date) was delivered to Lender on the Closing Date);

(iii)        then, to make a deposit into the Insurance Account in an amount equal to the payment of Insurance Funds that will be required to made under Section 6.4 on the next Monthly Payment Date;

(iv)        then, to make a deposit into an Account established for such purpose in an amount equal to the Monthly Debt Service Payment that Lender reasonably determines will be due and payable on the next Monthly Payment Date;

(v)         then, funds sufficient to pay any interest accruing at the Default Rate, late payment charges and all other amounts, other than those described under other clauses of this Section 6.11.1(b), then due to Lender and/or any Indemnified Party under the Loan Documents into an Account established for such purpose;

(vi)        then, to make a deposit into the Non Hilton Brand Operating Expense Account in an amount equal to the payment of Non Hilton Brand Operating Expenses that will be required to be made under Section 6.8.2 on the next Monthly Payment Date;

(vii)       then, to make a deposit into the FF&E Account in an amount equal to the payment of FF&E Funds that will be required to made under Section 6.5 on the next Monthly Payment Date; and

(viii)      lastly, payment of all amounts remaining in the Deposit Account after the applications contemplated by items (b)(i) through (b)(vii) above to Borrower as Excess Cash Flow.

6.11.2         Failure to Make Payments. The failure of Borrower to make all of the payments required under clauses (a)(ii) through clause (a)(v) and clause (a)(vii) of Section 6.11.1 in full on each Monthly Payment Date shall constitute an Event of Default under this Agreement; provided, however, if adequate funds are available in the Cash Management Account for such payments, and an Event of Default is not otherwise in existence, the failure by the Cash Management Bank to allocate such funds into the appropriate Accounts shall not constitute an Event of Default. The insufficiency of funds on deposit in the Cash Management Account shall not relieve Borrower from the obligation to make any payments, as and when due pursuant to the Loan Documents.

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6.11.3         Application After Event of Default. Notwithstanding anything to the contrary contained in this Agreement or any other Loan Document, upon the occurrence and during the continuance of an Event of Default, Lender, at its option, may apply any Gross Revenue then in the possession of Lender, Servicer or Cash Management Bank (including any Reserve Funds on deposit in any Cash Management Account) to the payment of the Debt in such order, proportion and priority as Lender may determine in its sole and absolute discretion; provided, however, that Lender shall fund Approved Operating Expenses (including, upon Borrower’s request pursuant to the definition of Approved Operating Expenses, funds for excess Operating Expenses in an amount up to, but not exceeding 10% of the Monthly Operating Expense Budgeted Amount) relating to the Hilton Brand Managed Properties, together with any Taxes and Insurance Premiums relating to Hilton Brand Managed Properties, if any are held on reserve (and are therefore not otherwise released as part of the Approved Operating Expenses relating to the Hilton Brand Managed Properties), unless and until Lender has terminated the Property Manager of the Hilton Brand Managed Properties pursuant to the terms of the applicable Assignment of Management Agreement. Lender’s right to withdraw and apply any of the foregoing funds shall be in addition to all other rights and remedies provided to Lender under the Loan Documents.

Article 7: property MANAGEMENT

Section 7.1  The Franchise Agreement, Property Management Agreement, Intermediate Management Agreement and Beverage Concession Agreement.

7.1.1           Franchise Agreement. Borrower shall (a)  diligently perform and observe all of the terms, covenants and conditions of the Franchise Agreement on the part of Borrower to be performed and observed, (b) promptly notify Lender of any default under the Franchise Agreement beyond all applicable notice and cure periods of which it is aware, (c) promptly deliver to Lender a copy of each financial statement, business plan, property improvement plan, capital expenditures plan and each material notice, report and survey received by it or any Affiliate of Borrower under the Franchise Agreement, and (d) promptly enforce in accordance with commercially reasonable practices the performance and observance of all of the covenants required to be performed and observed by Franchisor under the Franchise Agreement.

7.1.2           Property Management Agreement; Intermediate Management Agreement.

(a)          Borrower shall at all times cause each Property to be managed by a Property Manager pursuant to a Property Management Agreement; provided that to the extent such Property Manager shall have been retained by an Intermediate Manager, the applicable Property Manager shall have entered into an agreement reasonably acceptable to Lender whereby such Property Manager agrees to attorn to Lender notwithstanding the termination of the applicable Intermediate Management Agreement (which agreement if contained in an Assignment of Property Management Agreement is hereby accepted by Lender) or any foreclosure of the Security Instruments. Borrower hereby agrees that the fee paid to Property Manager and Intermediate Manager, if applicable, collectively, in compensation for Property Manager’s and Intermediate Manager’s services conducted in connection with the management of the Property shall not exceed, in the aggregate, four percent (4.0%) of Gross Revenue

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(excluding the receipt of commercially reasonable incentive fees so long as such fees are fully subordinated to payment of the Loan).

(b)          Borrower shall (i) to the extent that Borrower shall have entered into an Intermediate Management Agreement, cause Intermediate Manager to cause Property Manager to, or (ii) directly cause Property Manager to, (A) manage the Property in accordance with the Property Management Agreement and the Franchise Agreement, (B) diligently perform and observe all of the material terms, covenants and conditions of the Property Management Agreement and the Franchise Agreement on the part of the Borrower or Property Manager, as appropriate, to be performed and observed, (C) promptly notify Lender of any default under the Property Management Agreement or the Franchise Agreement beyond all applicable notice and cure periods of which it is aware, (D) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, property improvement plan, material report, material survey and each material notice received by it or any Affiliate of Borrower under the Property Management Agreement or the Franchise Agreement, and (E) promptly enforce in accordance with commercially reasonable practices the performance and observance of all of the covenants required to be performed and observed by Property Manager under the Property Management Agreement and Franchisor under the Franchise Agreement.

(c)          To the extent that Borrower shall have entered into an Intermediate Management Agreement, Borrower shall (i) diligently perform and observe in all material respects all of the terms, covenants and conditions of the Intermediate Management Agreement on the part of Borrower to be performed and observed, (ii) promptly notify Lender of any default under the Intermediate Management Agreement beyond all applicable notice and cure periods of which it is aware, (iii) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, property improvement plan, material report, material survey and each material notice received by it or any Affiliate of Borrower under the Intermediate Management Agreement, and (iv) promptly enforce in accordance with commercially reasonable practices the performance and observance of all of the covenants required to be performed and observed by Intermediate Manager under the Intermediate Management Agreement, including, without limitation, payment of all fees and expenses due any Property Manager.

(d)          To the extent that Borrower shall have entered into a Property Management Agreement, Borrower shall (i) diligently perform and observe in all material respects all of the terms, covenants and conditions of the Property Management Agreement on the part of Borrower to be performed and observed, (ii) promptly notify Lender of any default under the Property Management Agreement beyond all applicable notice and cure periods of which it is aware, (iii) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, property improvement plan, material report, material survey and each material notice received by it or any Affiliate of Borrower under the Property Management Agreement, and (iv) promptly enforce in accordance with commercially reasonable practices the performance and observance of all of the covenants required to be performed and observed by Property Manager under the Property Management Agreement, including, without limitation, payment of all fees and expenses due any Property Manager.

(e)          To the extent that Borrower shall have entered into an Intermediate Management Agreement and caused Intermediate Manager to enter into a Property Management

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Agreement with Property Manager, Borrower shall cause Intermediate Manager to (i) diligently perform and observe in all material respects all of the terms, covenants and conditions of the Property Management Agreement on the part of such Intermediate Manager to be performed and observed, (ii) promptly notify Lender of any default under the Property Management Agreement beyond all applicable notice and cure periods of which it is aware, (iii) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, property improvement plan, material report, material survey and each material notice received by it or any Affiliate of such Intermediate Manager under the Property Management Agreement, and (iv) promptly enforce in accordance with commercially reasonable practices the performance and observance of all of the covenants required to be performed and observed by Property Manager under the Property Management Agreement, including, without limitation, payment of all fees and expenses due any Property Manager.

7.1.3           Beverage Concession Agreement. Borrower shall (a) cause Beverage Concessionaire to manage in a commercially reasonable manner the serving and selling of alcoholic beverages and related items to customers at the Courtyard Houston Property in accordance with the Beverage Concession Agreement, (b) diligently perform and observe in all material respects all of the terms, covenants and conditions of the Beverage Concession Agreement on the part of Borrower to be performed and observed, (c) promptly notify Lender of any material default under the Beverage Concession Agreement beyond all applicable notice and cure periods of which it is aware, (d) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, property improvement plan, material report, material survey and each material notice received by it or any Affiliate of Borrower under the Beverage Concession Agreement to the extent any of the same is of a material nature, and (e) promptly enforce in accordance with commercially reasonable practices the performance and observance of all of the covenants required to be performed and observed by Beverage Concessionaire under the Beverage Concession Agreement.

7.1.4           Defaults.

(a)          If Borrower or any Intermediate Manager shall default in the performance or observance of any material term, covenant or condition of any Intermediate Management Agreement or any Property Management Agreement on the part of Borrower or any Intermediate Manager to be performed or observed, then, without limiting Lender’s other rights or remedies under the Loan Documents, and without waiving or releasing Borrower or Intermediate Manager from any of its Obligations hereunder or under any Intermediate Management Agreement or any Property Management Agreement, Lender shall have the right in the manner provided pursuant to an Assignment of Property Management Agreement, but shall be under no obligation, to pay any sums or to perform any act as may be appropriate to cause all of the material terms, covenants and conditions of such Property Management Agreement on the part of the Borrower or Intermediate Manager, as applicable, to be performed or observed.

(b)          If Borrower shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement or the Beverage Concession Agreement on the part of Borrower to be performed or observed, then, without limiting Lender’s other rights or remedies under the Loan Documents, and without waiving or releasing Borrower from any of its Obligations hereunder or under any Franchise Agreement or the Beverage Concession Agreement, as applicable, Lender shall have the right in the manner provided pursuant to an Assignment of Franchise Agreement and the Assignment of Beverage

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Concession Agreement, as applicable, but shall be under no obligation, to pay any sums or to perform any act as may be appropriate to cause all of the material terms, covenants and conditions of such Franchise Agreement or the Beverage Concession Agreement on the part of the Borrower to be performed or observed.

Section 7.2           Prohibition Against Termination or Modification of Franchise Agreement, Property Management Agreement, Intermediate Management Agreement and Concession Agreement.

7.2.1           Franchise Agreement. Borrower shall not, without Lender’s prior written consent, (a) surrender, terminate, cancel, modify, renew, amend or extend any Franchise Agreement (other than a renewal or extension provided for in such Franchise Agreement), (b) except as permitted under item (a) above, enter into any new or other agreement relating to the flagging of the Property with Franchisor or any other Person, (c) consent to the assignment by Franchisor of its obligations under any Franchise Agreement, (d) permit or suffer any Transfer of the ownership, management or Control of an Affiliated Franchisor to occur, or (e) waive or release any of its rights and remedies under any Franchise Agreement in any material respect. Notwithstanding the foregoing, Lender shall not unreasonably withhold its consent to any modification, amendment, renewal or extension of the Franchise Agreement that Lender reasonably determines enhances the value of one or more Properties or does not decrease the value of or otherwise have a Material Adverse Effect on one or more Properties.

7.2.2           Intermediate Management Agreement; Property Management Agreement

(a)          Borrower shall not, without the prior written consent of Lender, (i) surrender, terminate, cancel, modify in any material respect, renew or extend any Intermediate Management Agreement (other than a renewal or extension provided for in such Intermediate Management Agreement); provided, that so long as no Event of Default shall have occurred and be continuing or would occur as a result of such replacement, Borrower may replace Intermediate Manager with a Qualified Manager pursuant to a Replacement Management Agreement, (ii) except as permitted under item (i) above, enter into any new or other agreement relating to the management or operation of the Property with Intermediate Manager or any other Person, (iii) consent to the further assignment by Intermediate Manager or Property Manager, as the case may be, of its interest under any Intermediate Management Agreement or any Property Management Agreement, as applicable, (iv) subject to the terms and provisions of Section 8.2(k) and Section 8.2(l), permit or suffer any transfer of the ownership, management or control of Intermediate Manager or any other Affiliated Manager, as the case may be, to occur, or (v) waive or release any of its rights and remedies under any Intermediate Management Agreement in any material respect. Notwithstanding anything herein to the contrary, during the thirty (30) days following any change in Control of Pool II Holdco to the Preferred Equity Investors, Lender consent shall not be required in connection with the termination of any Intermediate Manager and any Intermediate Management Agreement so long as a Qualified Manager (including any Scheduled Manager) shall be engaged pursuant to a direct Property Management Agreement in

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respect of each Property affected and Borrower shall have satisfied the conditions set forth in Section 7.3.8 hereof.

(b)          In connection with any Property Management Agreement, Borrower shall not, nor shall Borrower permit any Intermediate Manager, without the prior written consent of Lender, to (i) surrender, terminate, cancel, modify in any material respect, renew or extend any Property Management Agreement (other than a renewal or extension provided for in such Property Management Agreement); provided, that so long as no Event of Default shall have occurred and be continuing or would occur as a result of such replacement, Borrower may and shall permit Intermediate Manager to replace a Property Manager with a Qualified Manager pursuant to a Replacement Management Agreement, (ii) except as permitted under item (i) above, enter into any new or other agreement relating to the management or operation of the Property with Property Manager or any other Person, (iii) consent to the assignment by Property Manager of its interest under any Property Management Agreement, (iv) permit or suffer any transfer of the ownership, management or control of any Affiliated Manager to occur, or (v) waive or release any of its rights and remedies under any Property Management Agreement in any material respect. Notwithstanding anything herein to the contrary, during the thirty (30) days following any change in Control of Pool II Holdco to the Preferred Equity Investors, Lender consent shall not be required in connection with the termination of any Property Manager and the associated Property Management Agreement and the engagement of a Scheduled Manager as a Property Manager pursuant to a new Property Management Agreement in respect of each Property affected and Borrower’s satisfaction of the conditions set forth in Section 7.3.8 hereof.

7.2.3           Beverage Agreements. Borrower shall not, without the prior written consent of Lender, (i) surrender, terminate, cancel, modify in any material respect, renew or extend the Beverage Management Agreement or Beverage Concession Agreement (other than a renewal or extension provided for in such agreement), (ii) (except as permitted under item (i) above) enter into any new or other agreement relating to the serving and selling of alcoholic beverages and related items to customers at the Courtyard Houston Property with Beverage Manager, Beverage Concessionaire or any other Person, (iii) consent to the assignment by Beverage Manager or Beverage Concessionaire of its interest under the Beverage Management Agreement or Beverage Concession Agreement, as appropriate, (d) permit or suffer any Transfer of the ownership, management or Control of Beverage Manager or Beverage Concessionaire to occur, or (e) waive or release any of its rights and remedies under the Beverage Management Agreement or Beverage Concession Agreement in any material respect. Notwithstanding anything to the contrary, during the thirty (30) days following any change in Control of Pool II Holdco to the Preferred Equity Investors, Lender consent shall not be required on connection with the termination of Beverage Concessionaire and/or Beverage Manager and the associated Beverage Management Agreement or Beverage Concession Agreement, as appropriate, and the engagement of a Scheduled Manager (or its Affiliate) as Beverage Manager or Beverage Concessionaire pursuant to a new Beverage Management Agreement or Beverage Concession Agreement, respectively.

Section 7.3           Expiration or Termination of Franchise Agreement, Intermediate Management Agreement and Property Management Agreement.

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7.3.1           Expiration or Franchisor Termination. In the event that any Franchise Agreement expires or is surrendered, terminated or canceled (without limiting any obligation of Borrower to obtain Lender’s consent under Section 7.2.1 hereof), Borrower shall enter into a Replacement Franchise Agreement with a Qualified Franchisor contemporaneously with such expiration, surrender, termination or cancellation.

7.3.2           Expiration, or Property Manager or Intermediate Manager Termination.

(a)          In the event that any Intermediate Management Agreement expires or is surrendered, terminated or canceled (without limiting any obligation of Borrower to obtain Lender’s consent under Section 7.2.2(a) hereof), Borrower shall either assume such Intermediate Manager’s Property Management Agreement with Property Manager or enter into a Replacement Management Agreement with a Qualified Manager contemporaneously with such expiration, surrender, termination or cancellation.

(b)          In the event any Property Management Agreement expires or is surrendered, terminated or canceled (without limiting any obligation of Borrower and Intermediate Manager to obtain Lender’s consent under Section 7.2.2(b) hereof), Borrower shall or shall cause Intermediate Manager to enter into a Replacement Management Agreement with a Qualified Manager contemporaneously with such expiration, surrender, termination or cancellation.

(c)          In the event any Beverage Concession Agreement expires or is surrendered, terminated or canceled (without limiting any obligation of Borrower to obtain Lender’s consent under Section 7.2.3 hereof), Borrower shall or shall cause Beverage Concessionaire to enter into a replacement beverage concession arrangement with a Person reasonably approved by Lender contemporaneously with such expiration, surrender, termination or cancellation.

7.3.3           Lender’s Right to Require Replacement of Franchise Agreement. Lender shall have the right to require Borrower to replace any Franchisor with a Qualified Franchisor chosen by Borrower which is not an Affiliate of Borrower, any SPC Party or Guarantor to flag the Property pursuant to a Replacement Franchise Agreement upon the occurrence of any one or more of the following events: (a) at any time following the occurrence of an Event of Default, (b) if any Franchisor shall be in default under any Franchise Agreement beyond any applicable notice and cure period, (c) if any Franchisor shall become insolvent or a debtor in any Bankruptcy Action, or (d) if at any time any Franchisor has engaged in gross negligence, fraud or willful misconduct, in each case to the extent that Borrower has the right to so terminate the applicable Franchise Agreement upon the occurrence of any such event. Lender’s rights under this Section 7.3.3 shall be in addition to, and shall not be deemed to waive, qualify or otherwise limit any rights available to Lender under any Assignment of Franchise Agreement or any other comfort letter/tri-party agreement/non-disturbance agreement/assignment of franchise agreement and subordination of franchise fees or similar agreement delivered pursuant to the terms of this Agreement.

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7.3.4           Lender’s Right to Require Replacement of Property Management Agreement. Lender shall have the right to require Borrower to terminate any Intermediate Management Agreement, any Property Management Agreement and/or replace the Intermediate Manager or Property Manager with a Qualified Manager chosen by Borrower which is not an Affiliate of Borrower, any SPC Party or Guarantor to manage the Property pursuant to a Replacement Management Agreement upon the occurrence of any one or more the following events: (a) at any time following the occurrence of an Event of Default, (b) with respect to any Property managed by an Affiliated Manager, if at any time the Debt Service Coverage Ratio falls below 1.05:1.00, (c) if such Intermediate Manager or such Property Manger shall be in default under the applicable Intermediate Management Agreement and/or Property Management Agreement, respectively, beyond any applicable notice and cure period, (d) if such Intermediate Manager or such Property Manager shall become insolvent or a debtor in any Bankruptcy Action, or (e) if at any time such Intermediate Manager or such Property Manager has engaged in gross negligence, fraud or willful misconduct. Lender’s rights under this Section 7.3.4 shall be in addition to, and shall not be deemed to waive, qualify or otherwise limit any rights available to Lender under any Assignment of Property Management Agreement or similar agreement/assignment delivered pursuant to the terms of this Agreement.

7.3.5           Lender’s Right to Require Replacement of Beverage Concession Agreement. Lender shall have the right to require Borrower to terminate the Beverage Concession Agreement and/or replace the Beverage Concessionaire with a beverage concessionaire chosen by Borrower and approved by Lender which is not an Affiliate of Borrower, any SPC Party or Guarantor to manage the serving and selling of alcoholic beverages and related items to customers at the Courtyard Houston Property pursuant to a replacement beverage concession agreement substantially in the same form and substance as the Beverage Concession Agreement upon the occurrence of any one or more the following events: (a) at any time following the occurrence of an Event of Default, (b) if Beverage Concessionaire shall be in default under the Beverage Concessionaire Agreement  beyond any applicable notice and cure period, (c) if Beverage Concessionaire shall become insolvent or a debtor in any Bankruptcy Action, or (d) if at any time Beverage Concessionaire has engaged in gross negligence, fraud or willful misconduct.  Lender’s rights under this Section 7.3.5 shall be in addition to, and shall not be deemed to waive, qualify or otherwise limit any rights available to Lender under the Assignment of Beverage Concession Agreement or similar agreement/assignment delivered pursuant to the terms of this Agreement.

7.3.6           Actions Following Event of Default. Upon the occurrence and during the continuance of an Event of Default, (i) Borrower shall not exercise any rights, make any decisions, grant any approvals or otherwise take any action under any Intermediate Management Agreement, any Property Management Agreement, any Franchise Agreement or the Beverage Concession Agreement without the prior written consent of Lender, and (ii) Borrower shall cause Intermediate Manager to not exercise any rights, make any decisions, grant any approvals or otherwise take any action under any Property Management Agreement without the prior written consent of Lender.

7.3.7           Assignment of Franchise Agreement. If at any time Lender consents to the appointment of a new franchisor and/or the execution of a franchise agreement under this Agreement, such franchisor and, if necessary, Borrower shall, as a condition of Lender’s consent,

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execute a comfort letter/tri-party agreement/non-disturbance agreement/assignment of franchise agreement and subordination of franchise fees or similar agreement in form and substance reasonably satisfactory to Lender.

7.3.8           Assignment of Management Agreement. Upon any appointment of a new manager and/or the execution of any new management agreement (whether intermediate, prime or sub in nature) and regardless of whether or not Lender’s consent shall be a condition to such appointment pursuant to the provisions of this Agreement, Borrower shall execute and cause such new manager to execute an assignment of management agreement and subordination of management fees containing customary attornment provisions in favor of Lender and otherwise substantially in the form of the Assignment of Property Management Agreement (or such other form reasonably satisfactory to Lender).

7.3.9           Assignment of Beverage Concession Agreement. Upon any appointment of a new beverage concessionaire and/or the execution of any new beverage concession agreement and regardless of whether or not Lender’s consent shall be a condition to such appointment pursuant to the provisions of this Agreement, Borrower shall execute and cause such new beverage concessionaire to execute an assignment of beverage concession agreement and subordination of fees containing customary attornment provisions in favor of Lender and otherwise substantially in the form of the Assignment of Beverage Concession Agreement (or such other form reasonably satisfactory to Lender).

Article 8: TRANSFERS

Section 8.1           [Reserved]

Section 8.2           Permitted Transfers of Interest in Restricted Parties. Subject to the terms and provisions of Section 7 and this Section 8, the following Transfers shall be permitted hereunder:

(a)          One Transfer or a series of Transfers of the direct or indirect ownership interests in any Restricted Party provided that (i) no Default or Event of Default shall have occurred and be continuing or would occur as a result of such Transfer, (ii) such Transfer shall not cause a change in Control of any of the Borrowers, any SPC Party or Guarantor, (iii) the Property shall continue to be managed by a Property Manager pursuant to the Property Management Agreement or another Qualified Manager pursuant to a Replacement Management Agreement, (iv) after giving effect to such Transfer, (A) ARCHOP shall continue to own, directly or indirectly, at least  fifty-one percent (51%) of all legal, beneficial and economic interests in all Borrowers, and shall continue to Control Borrowers and (B) Guarantor shall continue to own, directly or indirectly, at least fifty-one percent (51%) of all legal, beneficial and economic interests in ARCHOP and shall continue to Control ARCHOP and Borrowers, (v) in connection with any Transfer subject to the requirements of Section 8.2(m), hereof, Borrowers shall give Lender notice of such Transfer together with copies of all instruments effecting such Transfer and the organizational documents of the transferee and its constituent parties reasonably required by Lender not less than ten (10) days prior to the date of such Transfer, (vi) the legal and financial structure of Borrowers and their members or partners, as applicable, and the single purpose nature and bankruptcy remoteness of Borrowers and their members or partners, as

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applicable, after such Transfer, shall satisfy the requirements set forth herein, (vii) Borrower shall have obtained the consent of the Preferred Equity Investors to such Transfer if required pursuant to the Pool II Holdco Operating Agreement, and (viii) such Transfer shall be permitted under each Franchise Agreement, each Property Management Agreement, each Operating Lease, each REA and/or the applicable Borrowers shall obtain any consents required from Franchisor, each Property Manager, each Borrower that serves as the lessor under the applicable Operating Lease and the REA counterparty in connection with such Transfer and deliver the same to Lender.

(b)          One Transfer or a series of Transfers of direct or indirect ownership interests in ARCHOP provided that (i) no Default or Event of Default shall have occurred and be continuing or would occur as a result of such Transfer, (ii) the Property shall continue to be managed by a Property Manager pursuant to the Property Management Agreement or another Qualified Manager pursuant to a Replacement Management Agreement, (iii) after giving effect to such Transfer, (A) ARCHOP (or its permitted successor) shall continue to own, directly or indirectly, at least fifty-one percent (51%) of all legal, beneficial and economic interests in all Borrowers, and shall continue to Control Borrowers and (B) one or more Qualified Equity Holders shall own, directly or indirectly, at least fifty-one percent (51%) of all legal, beneficial and economic interests in and shall Control ARCHOP (or its permitted successor) and Borrowers, (iv) Borrowers shall give Lender notice of such Transfer together with copies of all instruments effecting such Transfer and the organizational documents of the transferee and its constituent parties reasonably required by Lender not less than ten (10) days prior to the date of such Transfer, (v) the legal and financial structure of Borrowers and their members or partners, as applicable, and the single purpose nature and bankruptcy remoteness of Borrowers and their members or partners, as applicable, after such Transfer, shall satisfy Lender’s requirements as set forth herein, (vi) such Transfer shall be permitted under each Franchise Agreement, each Property Management Agreement, each Operating Lease and each REA and/or Borrowers shall obtain any consents required from each Franchisor, each Property Manager, each Borrower that serves as the lessor under the applicable Operating Lease and the REA counterparty in connection with such Transfer and deliver the same to Lender, (vii) if required by Lender, Borrowers provide a Satisfactory Replacement Guarantor that satisfies the Satisfactory Guarantor Substitution Conditions, (viii) Borrower shall have obtained the consent of the Preferred Equity Investors to such Transfer if required pursuant to the Pool II Holdco Operating Agreement, and (ix) Borrowers shall pay Lender a fee of $10,000. An Event of Default arising from a Transfer of direct or indirect ownership interests in ARCHOP without complying with the conditions of this Section 8.2(b) shall be deemed cured (and shall not give rise to liability under the Guaranty) if and when (A) such Transfer occurs after a Permitted Preferred Equity Changeover Event, and (B) a Permitted Common Equity Buyout Event is thereafter completed.

(c)          A change in Control of Pool II Holdco pursuant to a “Changeover Event” as described in Section 3.3 of the Pool II Holdco Operating Agreement, provided that all of the following conditions are satisfied:

(i)          After giving effect to such change in Control, Pool II Holdco shall be Controlled by the Preferred Equity Investors pursuant to rights granted to Preferred Equity Investors in the organizational documents of Pool II Holdco;

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(ii)         Whitehall shall own, directly or indirectly, not less than ninety-seven percent (97%) of each Preferred Equity Investor and not less than ninety seven percent (97%) of all Preferred Equity Interests (or, in each case, such lesser amount as may be permitted under Section 8.2(f));

(iii)        Whitehall shall, directly or indirectly, retain sole and exclusive Control over the exercise of all rights granted to the Preferred Equity Investors pursuant to the organizational documents of Pool II Holdco (without the need to obtain anyone else’s consent). Without limiting the foregoing, Whitehall shall indirectly Control each of Pool II Holdco’s direct and indirect subsidiaries, including each Borrower;

(iv)        Preferred Equity Investors shall acquire Control of Pool II Holdco in accordance with the terms of the organizational documents of Pool II Holdco;

(v)         Preferred Equity Investors shall provide Lender written notice (a “Preferred Equity Change in Control Notice”) of such change in Control no less than ten (10) Business Days prior to the consummation of such change in Control;

(vi)        Preferred Equity Investors shall affirm, in a written instrument reasonably acceptable to Lender, effective concurrently with the change in Control, that the Recognition Agreement continues to be binding on Preferred Equity Investors, is unmodified, and remains in full force and effect. Such written instrument shall include a reaffirmation, as of the date thereof, of all of the representations and warranties in the Recognition Agreement;

(vii)       The change in Control is not prohibited by or constitute a default (or an event that with notice, passage of time, or both would ripen into a default) under any Franchise Agreement or Operating Lease, and would not permit any Franchisor or party to an Operating Lease to terminate same, and any consents or approvals required under any Franchise Agreement or Operating Lease shall have been obtained;

(viii)      As of the date of delivery of the Preferred Equity Change in Control Notice and as of the date of consummation of the change in Control neither Whitehall nor any Preferred Equity Investor shall be the subject of any proceeding under the Bankruptcy Code or any insolvency proceeding under the laws of any state, federal, or foreign jurisdiction;

(ix)         Whitehall shall have executed and delivered a Replacement Guaranty and Replacement Environmental Indemnity, pursuant to which Whitehall shall undertake the obligations as set forth in the Replacement Guaranty and Replacement Environmental Indemnity, but only to the extent arising from events, facts, or circumstances occurring from and after the effective date of the change in Control;

(x)          If required by Lender or the Rating Agencies, Borrower or the Preferred Equity Investor shall deliver to Lender an opinion from counsel, and in form and substance reasonably acceptable to Lender and acceptable to the Rating Agencies in their sole discretion stating, among other things, that (A) Whitehall is duly formed and validly existing, (B) delivery of the replacement guaranty and environmental indemnity has been duly authorized, (C) that the replacement guaranty and environmental indemnity are enforceable against Whitehall in

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accordance with their terms, and (D) any REMIC trust formed pursuant to a Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code or be subject to tax as a result of such change in Control and such delivery;

(xi)         If required by Lender or the Rating Agencies and if an Insolvency Opinion has previously been delivered in connection with the Loan, Borrower or the Preferred Equity Investors shall deliver to Lender a new Insolvency Opinion;

(xii)        Lender shall receive evidence, reasonably satisfactory to Lender, that as of the effective date of the change in Control, Whitehall satisfies the Replacement Guaranty Financial Covenants (such evidence may be in the form of an officer’s certificate signed by a duly authorized representative of Whitehall);

(xiii)       Each of the Properties will continue to be managed by Property Manager or will be managed by a Scheduled Manager after the change in Control;

(xiv)      Borrower or Preferred Equity Investor shall pay Lender a fee of $10,000; and

(xv)       Preferred Equity Investors shall have satisfied the Lender Transfer Requirements no more than ten (10) Business Days prior to the consummation of such change in Control.

Upon the execution and delivery of a Replacement Guaranty and Replacement Environmental Indemnity by Whitehall and satisfaction of all of the foregoing conditions of this Section 8.2(c), the Guarantor that has been replaced by Whitehall shall (subject to Section 8.2(e)) be forever released from any further liability under the Guaranty and the Environmental Indemnity arising from any circumstance, condition, action or event first occurring after the effective date of such replacement to the extent the same is not caused by such replaced Guarantor; provided, however, that such replaced Guarantor shall remain liable under the Guaranty and Environmental Indemnity for any obligations thereunder arising from any action or event occurring prior to the effective date of such replacement.

(d)          A Permitted Common Equity Buyout Event; provided that Lender receives prior or concurrent written notice of the occurrence of such event, and such notice is accompanied by an Officer’s Certificate with an updated organizational chart confirming that, after giving effect to such event, neither ARCHOP nor any of its Affiliates shall have any right, title, or interest, direct or indirect, in Borrower (other than interests any of such Persons may directly or indirectly hold in Whitehall).

(e)          Following or concurrently with a Permitted Preferred Equity Changeover Event, the Transfer to the Common Equity Member of the Interests in Pool II Holdco held by the Preferred Equity Investors provided that such Transfer is made in accordance with the terms of Section 3.4 of the Pool II Holdco Operating Agreement, and provided further that all of the following conditions are satisfied:

(i)          No Event of Default shall have occurred and be continuing.

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(ii)         After giving effect to such Transfer, Pool II Holdco shall be Controlled by Common Equity Member pursuant to rights granted to Common Equity Member in the organizational documents of Pool II Holdco;

(iii)        (A) ARCHOP shall continue to own, directly or indirectly, at least  fifty-one percent (51%) of all legal, beneficial and economic interests in all Borrowers, and shall continue to Control Borrowers and (B) Guarantor shall continue to own, directly or indirectly, at least fifty-one percent (51%) of all legal, beneficial and economic interests in ARCHOP and shall continue to Control ARCHOP and Borrowers;

(iv)        Guarantor shall, directly or indirectly, retain sole and exclusive Control over the exercise of all rights granted to the Common Equity Investor pursuant to the organizational documents of Pool II Holdco (without the need to obtain anyone else’s consent). Without limiting the foregoing, Guarantor shall indirectly Control each of Pool II Holdco’s direct and indirect subsidiaries, including each Borrower;

(v)         Common Equity Investor shall acquire Control of Pool II Holdco in accordance with the terms of the organizational documents of Pool II Holdco;

(vi)        Preferred Equity Investors shall provide Lender written notice (a “Common Equity Change in Control Notice”) of such Transfer to the Common Equity Member of the Interests in Pool II Holdco held by the Preferred Equity Investors no less than ten (10) Business Days prior to the consummation of such Transfer;

(vii)       The Transfer is not prohibited by or constitute a default (or an event that with notice, passage of time, or both would ripen into a default) under any Franchise Agreement or Operating Lease and would not permit any Franchisor or party to an Operating Lease to terminate same, and any consents or approvals required under any Franchise Agreement or Operating Lease shall have been obtained;

(viii)      Each of the Properties will continue to be managed by Property Manager or will be managed by a Qualified Manager after the change in Control;

(ix)         As of the date of delivery of the Common Equity Change in Control Notice and as of the date of consummation of the Transfer neither Guarantor nor any Pool II Common Equity Investor shall be the subject of any proceeding under the Bankruptcy Code or any insolvency proceeding under the laws of any state, federal, or foreign jurisdiction;

(x)          Pursuant to documentation acceptable to Lender, Guarantor shall reaffirm (and rescind any prior cancellation or release of), the Guaranty and Environmental Indemnity;

(xi)         If required by Lender or the Rating Agencies, Borrower shall deliver to Lender an opinion from counsel, and in form and substance reasonably acceptable to Lender and acceptable to the Rating Agencies in their sole discretion stating, among other things, that (A) Guarantor is duly formed and validly existing, (B) delivery of the reaffirmation of the Guaranty and Environmental Indemnity has been duly authorized, (C) that such Guaranty and Environmental Indemnity are enforceable against Guarantor in accordance

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with their terms, and (D) any REMIC trust formed pursuant to a Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code or be subject to tax as a result of such Transfer and such delivery;

(xii)        If required by Lender or the Rating Agencies and if an Insolvency Opinion has previously been delivered in connection with the Loan, Borrower shall deliver to Lender a new Insolvency Opinion;

(xiii)       Lender shall receive evidence, reasonably satisfactory to Lender, that as of the effective date of the Transfer, Guarantor satisfies the Financial Covenants;

(xiv)      Lender shall receive evidence reasonably satisfactory to Lender that each of the Properties will continue to be managed by Manager or will be managed by a Scheduled Manager after the Transfer;

(xv)       Borrower shall pay Lender a fee of $10,000; and

(xvi)      Common Equity Investor shall have satisfied the Lender Transfer Requirements no more than ten (10) Business Days prior to the consummation of such Transfer.

Upon the execution and delivery of a satisfactory reaffirmation of the Guaranty and Environmental Indemnity by Guarantor under clause (x), any replacement guarantor provided by Whitehall pursuant to Section 8.2(c) shall be forever released from any further liability under the Replacement Guaranty and the Replacement Environmental Indemnity arising from any circumstance, condition, action or event first occurring after the effective date of such reaffirmation to the extent the same is not caused by such replacement guarantor; provided, however, that such replacement guarantor shall remain liable under its Replacement Guaranty and Replacement Environmental Indemnity for any obligations thereunder arising from any action or event occurring prior to the effective date of such reaffirmation.

For clarification, each reference to “Guarantor” under this Section 8.2(e) is intended to refer to American Realty Capital Hospitality Trust, Inc., and not to a guarantor under a Replacement Guaranty.

(f)          One Transfer or a series of Transfers of the Preferred Equity Interests or of direct or indirect ownership interests in a Preferred Equity Investor, provided that all of the following conditions are satisfied:

(i)          After giving effect to such Transfer or series of Transfers, Whitehall shall own, directly or indirectly, not less than fifty one percent (51%) of each Preferred Equity Investor and not less than fifty one percent (51%) of all Preferred Equity Interests.

(ii)         Whitehall shall, directly or indirectly, retain sole and exclusive Control over each Preferred Equity Investor and the exercise of all rights granted to the Preferred Equity Investor pursuant to the organizational documents of Pool II Holdco (without the need to obtain anyone else’s consent).

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(iii)        If a change in Control permitted by Section 8.2(c) has occurred, Whitehall shall continue to directly or indirectly Control Pool II Holdco and each of its then direct and indirect subsidiaries and, without limiting the foregoing, shall indirectly Control each Borrower.

(iv)        With respect to a direct Transfer of Preferred Equity Interests or a transaction subject to Section 8.2(m), Lender shall receive not less than thirty (30) days advance written notice of such Transfer.

(v)         With respect to a direct Transfer of Preferred Equity Interests, the transferee shall join or assume, as applicable, the Recognition Agreement by an instrument in form and substance reasonably satisfactory to Lender, dated as of the date of the Transfer. Such written instrument shall include an affirmation, as of the date thereof, of all of the representations and warranties in the Recognition Agreement (as may be reasonably modified to take into account differences in the identity of the transferee from the transferor, assuming the balance of the conditions of this Section 8.2(f) are otherwise met).

(vi)        The Transfer(s) are not prohibited by or constitute a default (or an event that with notice, passage of time, or both would ripen into a default) under each Franchise Agreement, and each Operating Lease and would not permit any Franchisor or party to an Operating Lease to terminate same, and that any consents or approvals required under any Franchise Agreement or Operating Lease have been obtained.

(g)          The sale, transfer or issuance of shares of stock in Guarantor or, following any change in Control of Pool II Holdco to the Preferred Equity Investors, American Realty Capital Hospitality Trust, Inc., provided either (i) such shares of stock are listed on the New York Stock Exchange, NASDAQ Global Select Market or another nationally recognized stock exchange or (ii) such shares of stock are sold, transferred or issued in the ordinary course of business through licensed broker dealers in accordance with all applicable legal requirements to third party investors in a manner consistent with previous offerings conducted by Guarantor or, following any change in Control of Pool II Holdco to the Preferred Equity Investors, American Realty Capital Hospitality Trust, Inc. or any of their Affiliates to date. For the avoidance of doubt, any listing of the shares of stock in Guarantor on the New York Stock Exchange, NASDAQ Global Select Market or another nationally recognized stock exchange shall not be a prohibited Transfer hereunder.

(h)          One Transfer or a series of Transfers of the direct or indirect interests in Whitehall.

(i)          One Transfer or a series of Transfers of preferred stock issued by W2007 Grace Acquisition I, Inc., a Tennessee corporation (“Grace Acquisition I”); provided that, after giving effect to such Transfer or Transfers, with respect to each class of securities issued by Grace Acquisition I, The Goldman Sachs Group, Inc. (together with its Affiliates) continues to own at least fifty one percent (51%) of the securities that are owned by the Goldman Sachs Group, Inc. and its Affiliates on the date hereof.

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(j)          A merger or other combination of Grace Acquisition I with or into another Person provided that, after giving effect to such merger or combination, the successor company is Controlled by Whitehall, and at least fifty one percent (51%) of the direct or indirect interests in the successor company is owned by Whitehall.

(k)          One Transfer or a series of Transfers of direct or indirect ownership interests in Crestline Hotels & Resorts, LLC or any other any Affiliated Manager provided that (i) no Default or Event of Default shall have occurred and be continuing or would occur as a result of such Transfer, (ii)  after giving effect to such Transfer, one or more Qualified Affiliated Manager Equity Holders shall own, directly or indirectly, at least fifty-one percent (51%) of all legal, beneficial and economic interests in and shall Control such Affiliated Manager, and (iii) Borrowers shall give Lender notice of such Transfer together with copies of all instruments effecting such Transfer and the organizational documents of the transferee and its constituent parties reasonably required by Lender not less than ten (10) days prior to the date of such Transfer.

(l)          a Qualified IPO of Crestline Hotels & Resorts, LLC or any other Affiliated Manager and subsequent to the closing of such Qualified IPO, the sale, transfer or issuance of the equity of the Affiliated Manager on the New York Stock Exchange, NASDAQ Global Select Market or another nationally recognized stock exchange. 

(m)          Notwithstanding anything in this Section 8.2 to the contrary, and without limiting any of the foregoing requirements of this Section 8.2, if after giving effect to any Transfer permitted by this Section 8.2 (other than a Transfer permitted by Section 8.2(g), (h), (i), or (j) or other Transfers of securities listed on the New York Stock Exchange, NASDAQ Global Select Market or another nationally recognized stock exchange), (i) twenty percent (20%) or more in the aggregate of the direct or indirect ownership interests (or any class of ownership interests) in any Borrower, any SPC Party, Guarantor, or Pool II Holdco would be owned by a Person (together with its Affiliates) which did not own twenty percent (20%) or more of the direct or indirect ownership interests (or any class of ownership interests) in such Borrower, SPC Party, Guarantor, Preferred Equity Investor or Pool II Holdco, as applicable, on the Closing Date or as a result of other Transfers previously made in accordance with the terms and provisions of this Agreement, or if any change in Control of any Borrower, any SPC Party, Guarantor, Preferred Equity Investor or Pool I Holdco occurs, then, as a condition to any such Transfer or change in Control being permitted hereunder, the transferee or Person acquiring Control (together with its Affiliates) shall satisfy the Lender Transfer Requirements prior to the date of such Transfer or change in Control or, in the case of a Transfer or change in Control triggered by the death or incapacity of an individual, within thirty (30) days after the date of such Transfer or change in Control, and/or (ii) forty-nine percent (49%) or more in the aggregate of the direct or indirect ownership interests in any Borrower or any SPC Party would be owned by a Person (together with its Affiliates) which did not own forty-nine percent (49%) or more of the direct or indirect ownership interests in such Borrower or any SPC Party on the Closing Date or as a result of other Transfers previously made in accordance with the terms and provisions of this Agreement, then, as a condition to any such Transfer being permitted hereunder, Borrower (or, at the election of the Preferred Equity Holder, the Preferred Equity Holder) shall deliver to Lender a new Insolvency Opinion, in each case prior to the date of such Transfer or, in the case of a

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Transfer triggered by the death or incapacity of an individual, within thirty (30) days after the date of such Transfer.

Section 8.3           Costs and Expenses. Borrower shall pay all costs and expenses of Lender in connection with any Transfer, assumption, and/or replacement of any Guarantor, including, without limitation, the cost of any Rating Agency Confirmation and all reasonable fees and expenses of Lender’s counsel, and the cost of any required counsel opinions, including, without limitation, Insolvency Opinions and opinions related to REMIC Trusts or other securitization or tax issues.

Section 8.4           Compliance with other Covenants. The foregoing provisions of this Article 8 shall not be deemed to waive, qualify or otherwise limit Borrower’s obligation to comply (or cause the compliance with) the other covenants set forth in this Agreement and the other Loan Documents (including, without limitation, those covenants relating to OFAC and ERISA matters).

Article 9: SALE AND SECURITIZATION OF LOAN

Section 9.1           Sale of Loan and Securitization.

(a)          Lender shall have the right (i) to sell, assign, pledge or otherwise transfer the Loan or any portion thereof or interest therein to any Person, (ii) to sell participation interests in the Loan to any Person, or (iii) to securitize the Loan or any portion thereof or interest therein in one or more private or public single asset or pooled loan securitizations. (The transactions referred to in clauses (i), (ii) and (iii) are each hereinafter referred to as a “Secondary Market Transaction” and the transactions referred to in clause (iii) shall hereinafter be referred to as a “Securitization”. Any certificates, notes or other securities issued in connection with a Securitization are hereinafter referred to as “Securities”).

(b)          If requested by Lender, Borrower shall assist Lender in satisfying the market standards to which Lender customarily adheres or which may be reasonably required in the marketplace or by the Rating Agencies or applicable Legal Requirements in connection with any Secondary Market Transactions, including to:

(i)          (A) provide updated financial and other information with respect to the Property, the business operated at the Property, Borrower, Guarantor, any Affiliate of Borrower or Guarantor, Property Manager and Intermediate Manager, including, without limitation, the information set forth on Schedule VI attached hereto, (B) provide updated budgets and rent rolls (including itemized percentage of floor area occupied and percentage of aggregate base rent for each Tenant) relating to the Property, and (C) provide updated appraisals, market studies, environmental reviews (Phase I’s and, if appropriate, Phase II’s), property condition reports and other due diligence investigations of the Property (the information referred to in clauses (A), (B) and (C) shall hereinafter be referred to collectively as “Updated Information”), together, if customary, with appropriate verification of the Updated Information through letters of auditors, certificates of third party service providers or opinions of counsel acceptable to Lender and the Rating Agencies;

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

(iii)        provide updated (as of the closing date of any Secondary Market Transaction) representations and warranties made in the Loan Documents and such additional representations and warranties as Lender may reasonably require as a result of industry standard and commercially reasonable requirements of investors in Secondary Market Transactions, or the Rating Agencies may require;

(iv)        subject to Section 9.3, execute modifications and amendments to the Loan Documents and Borrower’s organizational documents as Lender may reasonably require or the Rating Agencies may require, including, without limitation, the addition of one or more Independent Directors pursuant to the terms and provisions of Schedule III attached hereto;

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

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

(c)          Borrower agrees that (i) Lender may disclose any information relating to Property, the business operated at the Property, Borrower, Guarantor, any Affiliate of Borrower or Guarantor, Property Manager, Intermediate Manager, the Loan (including information provided by or on behalf of Borrower or any of its Affiliates to Lender) to any Person (including, but not limited to, investors or prospective investors in the Securities, the NRSROs, investment banking firms, accounting firms, law firms and other third-party advisory and service providers relating to a Securitization) actually or potentially involved in or related to any Secondary Market Transaction or any other Person reasonably requesting such information in connection with a Secondary Market Transaction and (ii) the findings and conclusions of any third-party due diligence report obtained by Lender or other Indemnified Persons may be made publicly available if required, and in the manner prescribed, by applicable Legal Requirements.

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

(i)          if Lender expects that the principal amount of the Loan together with any Related Loans, as of the cut-off date for such Securitization, may equal or

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exceed ten percent (10%) (but less than twenty percent (20%)) of the aggregate principal amount of all mortgage loans included or expected to be included in the Securitization, net operating income for the Property and the Related Properties for the most recent fiscal year and interim period as required under Item 1112(b)(1) of Regulation AB (or, if the Loan is not treated as a non-recourse loan under Instruction 3 for Item 1101(k) of Regulation AB, selected financial data meeting the requirements and covering the time periods specified in Item 301 of Regulation S-K and Item 1112(b)(1) of Regulation AB), or

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

(e)          Further, if requested by Lender, Borrower shall, promptly upon Lender’s request, furnish to Lender financial data or financial statements meeting the requirements of Item 1112(b)(1) or (2) of Regulation AB, as specified by Lender, for any Tenant of the Property if, in connection with a Securitization, Lender expects there to be, as of the cutoff date for such Securitization, a concentration with respect to such Tenant or group of Affiliated Tenants within all of the mortgage loans included or expected to be included in the Securitization such that such Tenant or group of Affiliated Tenants would constitute a Significant Obligor. Borrower shall furnish to Lender, in connection with the preparation of the Disclosure Documents and on an ongoing basis, financial data and/or financial statements with respect to such Tenants meeting the requirements of Item 1112(b)(1) or (2) of Regulation AB, as specified by Lender, but only for so long as such entity or entities are a Significant Obligor and either (i) Exchange Act Filings are required to be made under applicable Legal Requirements or (ii) comparable information is required to otherwise be “available” to holders of the Securities under Regulation AB or applicable Legal Requirements.

(f)          If Lender determines that Borrower alone or Borrower and one or more Affiliates of Borrower collectively, or the Property alone or the Property and Related Properties collectively, are a Significant Obligor, then Borrower shall furnish to Lender, on an ongoing basis, selected financial data or financial statements meeting the requirements of Item 1112(b)(1) or (2) of Regulation AB, as specified by Lender, but only for so long as such entity or entities are a Significant Obligor and either (i) Exchange Act Filings are required to be made under applicable Legal Requirements or (ii) comparable information is required to

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otherwise be “available” to holders of the Securities under Regulation AB or applicable Legal Requirements.

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

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

(ii)         with respect to ongoing information required under Section 9.1(e) and (f) above, (1) not later than thirty (30) days after the end of each fiscal quarter of Borrower and (2) not later than seventy-five (75) days after the end of each Fiscal Year of Borrower.

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

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

(j)          All financial statements provided by Borrower pursuant to Section 9.1(d), (e), (f) or (g) shall be prepared in accordance with GAAP, and shall meet the requirements of Regulation S-K or Regulation S-X, as applicable, Regulation AB, and other applicable Legal Requirements. All financial statements relating to a Fiscal Year shall, if necessary in order to satisfy the requirements of such regulations, be audited by independent accountants of Borrower acceptable to Lender in accordance with generally accepted auditing standards, Regulation S-X or Regulation S-K, as applicable, Regulation AB, and all other applicable Legal Requirements, shall be accompanied by the manually executed report of the independent accountants thereon, which report shall meet the requirements of Regulation S-K or Regulation S-X, as applicable, Regulation AB, and all other applicable Legal Requirements, and shall be further accompanied by a manually executed written consent of the independent accountants, in form and substance acceptable to Lender, to the inclusion of such financial statements in any Disclosure Document and any Exchange Act Filing and to the use of the name of such independent accountants and the reference to such independent accountants as “experts” in any Disclosure Document and Exchange Act Filing (or comparable information is required to

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otherwise be available to holders of the Securities under Regulation AB or applicable Legal Requirements), all of which shall be provided at the same time as the related financial statements are required to be provided. All other financial statements shall be certified by the chief financial officer of Borrower, which certification shall state that such financial statements meet the requirements set forth in the first sentence of this paragraph.

Section 9.2           Securitization Indemnification.

(a)          Borrower understands and agrees that information provided to Lender by Borrower or its agents, counsel and representatives may be included in Disclosure Documents in connection with a Securitization and may also be included in filings with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the “Securities Act”), or the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and may be made available to investors or prospective investors in the Securities, the NRSROs, investment banking firms, accounting firms, law firms and other third-party advisory and service providers relating to a Securitization.

(b)          Borrower hereby agrees (i) to indemnify Lender, any Affiliate of Lender that has filed any registration statement relating to a Securitization or has acted as the issuer, sponsor, depositor or seller in connection with a Securitization, any Affiliate of Lender that acts as an underwriter, placement agent or initial purchaser of Securities issued in connection with a Securitization, any other issuers, depositors, underwriters, placement agents or initial purchasers of Securities issued in connection with a Securitization, and each of their respective officers, directors, partners, employees, representatives, agents and Affiliates, and each Person that controls any such Person within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the “Indemnified Persons”) for any losses, liabilities, obligations, claims, damages, penalties, actions, judgments, suits, costs and expenses (collectively, the “Liabilities”) to which any Indemnified Person may become subject insofar as the Liabilities arise out of or are based upon (A) any untrue statement or alleged untrue statement of any material fact contained in the information provided to Lender by Borrower, any Affiliate of Borrower or any of their respective agents, counsel or representatives, (B) the omission or alleged omission to state therein a material fact required to be stated in such information or necessary in order to make the statements in such information, in light of the circumstances under which they were made, not misleading and/or (C) a breach of the representations and warranties made by Borrower in Section 3.1.40 of this Agreement and (ii) to reimburse each Indemnified Person for any out-of-pocket legal or other expenses actually incurred by such Indemnified Person in connection with investigating or defending the Liabilities; provided, however, that Borrower will be liable in any such case under clauses (i) or (ii) above only to the extent that any such Liability arises out of, or is based upon, an untrue statement, alleged untrue statement, omission or alleged omission made in reliance upon and in conformity with (x) information furnished by or on behalf of Borrower (1) in connection with the preparation of the Disclosure Documents or (2) in connection with the underwriting or closing of the Loan or (y) any of the reports, statements or other information furnished by or on behalf of Borrower pursuant to the terms of this Agreement, including, without limitation, financial statements of Borrower and operating statements and rent rolls with respect to the Property. This indemnity will be in addition to any liability which Borrower may otherwise have.

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(c)          In connection with any Exchange Act Filing or other reports containing comparable information that are required to be made available to holders of the Securities under Regulation AB or other applicable Legal Requirements, Borrower shall (i) indemnify the Indemnified Persons for Liabilities to which any Indemnified Person may become subject insofar as the Liabilities arise out of or are based upon an untrue statement, alleged untrue statement, omission or alleged omission made in reliance upon and in conformity with (x) information furnished by or on behalf of Borrower (1) in connection with the preparation of the Disclosure Documents or (2) in connection with the underwriting or closing of the Loan or (y) any of the reports, statements or other information furnished by or on behalf of Borrower pursuant to the terms of this Agreement, including, without limitation, financial statements of Borrower and operating statements and rent rolls with respect to the Property, and (ii) reimburse each Indemnified Person for any legal or other expenses reasonably incurred by such Indemnified Person in connection with investigating or defending the Liabilities.

(d)          Promptly after receipt by an Indemnified Person of notice of a claim or the commencement of any action, such Indemnified Person will, if a claim in respect thereof is to be made against Borrower, notify Borrower in writing of the commencement thereof, but the omission to so notify Borrower will not relieve Borrower from any liability which it may have to any Indemnified Person under this Section 9.2 except to the extent that failure to notify materially prejudices Borrower. In the event that any action is brought against any Indemnified Person, and it notifies Borrower of the commencement thereof, Borrower will be entitled to participate therein and, to the extent that it may elect by written notice delivered to the Indemnified Person promptly after receiving the aforesaid notice from such Indemnified Person, to assume the defense thereof with counsel satisfactory to such Indemnified Person. After notice from Borrower to such Indemnified Person of Borrower’s election to assume the defense of such action, such Indemnified Person shall pay for any legal or other expenses subsequently incurred by such Indemnified Person in connection with the defense thereof other than reasonable costs of investigation; provided, however, if the defendants in any such action include both Indemnified Person and Borrower and the Indemnified Person shall have reasonably concluded that there are legal defenses available to it and/or other Indemnified Persons that are different from or additional to those available to Borrower, the Indemnified Person or Persons shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf of such Indemnified Person or Persons at the cost of Borrower. Borrower shall not be liable for the expenses of more than one separate counsel (in addition to local counsel) unless an Indemnified Person shall have reasonably concluded that there may be legal defenses available to it that are different from or additional to those available to another Indemnified Person.

(e)          In order to provide for just and equitable contribution in circumstances in which any indemnification or reimbursement under this Section 9.2 is for any reason held to be unenforceable as to an Indemnified Person in respect of any Liabilities (or action in respect thereof) referred to herein which would otherwise be indemnifiable under this Section 9.2, Borrower shall contribute to the amount paid or payable by the Indemnified Person as a result of such Liabilities (or action in respect thereof); provided, however, that no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. In determining the amount of contribution to which the respective parties are

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

(f)          Without limiting the generality of this Section 9.2, Borrower hereby agrees (i) to indemnify the Indemnified Persons against any Liabilities to which any Indemnified Persons may become subject in connection with any indemnification to the NRSROs in connection with issuing, monitoring or maintaining the Securities insofar as the Liabilities arise out of or are based upon (A) any untrue statement or alleged untrue statement of any material fact contained in the information provided to Lender or one or more of the NRSROs by Borrower, any Affiliate of Borrower or any of their respective agents, counsel or representatives, (B) the omission or alleged omission to state therein a material fact required to be stated in such information or necessary in order to make the statements in such information, in light of the circumstances under which they were made, not misleading and/or (C) a breach of the representations and warranties made by Borrower in Section 3.1.40 of this Agreement and (ii) to reimburse each Indemnified Person for any out-of-pocket legal or other expenses actually incurred by such Indemnified Person in connection with investigating or defending such Liabilities; provided, however, that, other than in connection with information provided by Borrower, any Affiliate of Borrower or any of their respective agents, counsel or representatives directly to one or more of the NRSROs, Borrower will be liable in any such case under clauses (i) or (ii) above only to the extent that any such Liability arises out of, or is based upon, an untrue statement, alleged untrue statement, omission or alleged omission made in reliance upon and in conformity with (x) information furnished by or on behalf of Borrower (1) in connection with the issuance, monitoring or maintenance of the Securities or (2) in connection with the underwriting or closing of the Loan or (y) any of the reports, statements or other information furnished by or on behalf of Borrower pursuant to the terms of this Agreement, including, without limitation, financial statements of Borrower and operating statements and rent rolls with respect to the Property. This indemnity will be in addition to any liability which Borrower may otherwise have.

(g)          For the avoidance of doubt, and without limiting the generality of the foregoing, “Indemnified Persons” shall include the initial named Lender hereunder and each other Lender that has held an interest in the Loan at any time during the Term, including prior to the occurrence of the act or omission giving rise to the applicable Liabilities.

(h)          The liabilities and obligations of both Borrower and Lender under this Section 9.2 shall survive the termination of this Agreement and the satisfaction and discharge of the Obligations.

Section 9.3           Severance Documentation. Lender shall have the right, at any time (whether prior to or after any Secondary Market Transaction in respect of all or any portion of the Loan), to modify, split and/or sever the Loan one or more times in order to (a) create (i) one or more new loans (including first and second mortgage loans), (ii) one or more new notes (including senior and junior notes (i.e., A/B and A/B/C structure)), (iii) multiple components of

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the Note or Notes and/or (iv) one or more mezzanine loans (a “New Mezzanine Loan”) (including amending Borrower’s organizational structure and the organizational documents of Borrower and its direct and indirect shareholders, partners, members and non-member managers to provide for one or more mezzanine borrowers), (b) reduce the number of loans, notes and/or components, (c) revise the interest rates of the loans, notes and/or components, (d) allocate and reallocate the principal balances of the loans, notes and/or components, (e) increase or decrease the monthly debt service payments for the loans, notes and/or components, (f) eliminate the multiple loan, note and/or component structure (including the elimination of the related allocations of principal and interest payments) or (g) otherwise achieve the optimum execution for a Secondary Market Transaction; provided, however, that in modifying, splitting and/or severing the Loan as provided above (1) Borrower shall not be required to modify the Stated Maturity Date, (2) the aggregate principal amount of all such loans, notes and/or components shall, on the date created, equal the Outstanding Principal Balance immediately prior to the creation of such loans, notes and/or components, (3) the weighted average interest rate of all such loans, notes and/or components shall, on the date created, equal the interest rate applicable to the Loan immediately prior to the creation of such loans, notes and/or components (except that the weighted average interest rate may subsequently increase as a result of prepayments made in accordance with Section 2.10 hereof or following a Casualty, Condemnation or Event of Default), and (4) the scheduled debt service payments on all such loans, notes and/or components shall, on the date created, equal the scheduled debt service payments under the Loan immediately prior to the creation of such loans, notes and/or components. At Lender’s election, each note comprising the Loan may be subject to one or more Secondary Market Transactions. Lender shall have the right to modify, split and/or sever the Loan in accordance with this Section 9.3 and, provided that such modification, split and/or severance shall comply with the terms of this Section 9.3, it shall become immediately effective. If requested by Lender, Borrower shall promptly execute an amendment to the Loan Documents to evidence any such modification, split and/or severance including, without limitation, an amendment to the Cash Management Agreement to reflect the newly created loans, notes and/or components. Borrower hereby absolutely and irrevocably appoints Lender as its true and lawful attorney, coupled with an interest, in its name and stead to make and execute all documents necessary or desirable to effect and modification, split and/or severance as described in this Section 9.3, Borrower ratifying all that its said attorney shall do by virtue thereof; provided, however, Lender shall not make or execute any such documents under such power until three (3) days after notice has been given to Borrower by Lender of Lender’s intent to exercise its rights under such power.

Section 9.4           Cross Collateralization. Borrower agrees that at any time Lender shall have the unilateral right to elect to remove the cross-collateralization of the Liens of the Security Instruments encumbering any one (1) or more of the Properties (individually or collectively, as the context may require, the “Affected Property”). In furtherance thereof, Lender shall have the right to (a) sever or divide the Note and the other Loan Documents in order to allocate to such Affected Property the Allocated Loan Amount with respect to such Property evidenced by one (1) or more new notes and secured by such other loan documents (individually or collectively, as the context may require, the “New Note”) having a principal amount equal to the Allocated Loan Amount applicable to such Affected Property, (b) segregate the applicable portion of each of the Reserve Funds relating to the Affected Property, (c) release any cross-default and/or cross-collateralization provisions applicable to such Affected Property, and (d) take such additional action consistent therewith; provided, that such New Note secured by such Affected Property,

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together with the Loan Documents secured by the remaining Properties, shall not increase in the aggregate (i) any monetary obligation of Borrower under the Loan Documents or (ii) any other obligation of Borrower under the Loan Documents in any material respect. In connection with the transfer of any such Affected Property as provided for in this Section 9.4, the Loan shall be reduced by an amount equal to amount of the New Note applicable to such Affected Property and the new loan secured by such Affected Property and evidenced by the New Note shall be in an amount equal to such Allocated Loan Amount. Subsequent to the release of the Affected Property from the lien of the Loan pursuant to this Section 9.4, the balances of the components of the Loan shall be the same as they would have been had a prepayment occurred in an amount equal to the Allocated Loan Amount of the Affected Property. At the request of Lender, Borrower shall otherwise reasonably cooperate with Lender in its attempt to satisfy all requirements necessary in order for Lender to obtain a Rating Agency Confirmation from the Approved Rating Agencies with respect to such transfer of the Affected Property from the Securitization and splitting of the Loan, which requirements shall include, without limitation: (A) delivery of evidence that the single purpose nature and bankruptcy remoteness of Borrowers owning Properties other than the Affected Property following such release have not been adversely affected and are in accordance with the terms and provisions of this Agreement (which evidence may include a “bring-down” of the Insolvency Opinion); and (B) the execution of such documents and instruments and delivery by Lender of such opinions of counsel as are typical for similar transactions, including, an opinion of counsel that the release of the Affected Property will not be a “significant modification” of this Loan within the meaning of Section 1.1001-3 of the regulations of the United States Department of the Treasury and that all other requirements applicable, if any, to a REMIC Trust, have been satisfied or have not otherwise been violated.

Section 9.5           Secondary Market Transaction Costs.

All costs and expenses incurred by Borrower, Guarantor, Property Manager, Intermediate Manager, Lender and their respective Affiliates in connection with Sections 9.1, 9.3 and 9.4 (including, without limitation, the fees and expenses of the Rating Agencies) shall be paid by Borrower; provided that such costs and expenses shall not exceed $50,000 (and Lender shall reimburse Borrower for all reasonable third party costs and expenses incurred by Borrower, Guarantor, Property Manager, Intermediate Manager and their respective Affiliates in connection with Borrower’s compliance with Sections 9.1, 9.3 and 9.4 (including, without limitation, the fees and expenses of the Rating Agencies) in excess of $50,000).

Article 10: DEFAULTS

Section 10.1         Events of Default.

(a)          Each of the following events shall constitute an event of default hereunder (each, an “Event of Default”):

(i)          if any monthly installment of principal and/or interest due under the Note or any payment of Reserve Funds due under this Agreement (other than deposits required under Section 6.6.1(a) pursuant to the PIP Reserve Funding Schedule which shall not, for any purpose, constitute an Event of Default hereunder) or the payment of the Obligations due on the Maturity Date is not paid when due (provided, however, that if no other Event of Default

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shall have occurred and be continuing and adequate funds have been allocated pursuant to Section 6.11.1 for payment of any required monthly installment of principal, interest and required deposit of Reserve Funds, the failure by Cash Management Bank to disburse any payments due to Lender and/or allocate such funds to the appropriate Reserve Account in violation of the Loan Documents shall not constitute an Event of Default);

(ii)         if any other portion of the Obligations (other than as set forth in the foregoing clause (i)) is not paid when due and such non-payment continues for five (5) days following written notice to Borrower that the same is due and payable;

(iii)        if any of the Taxes or Other Charges are not paid when due (provided, however, that if no other Event of Default shall have occurred and be continuing and adequate funds are on deposit in the Tax Account for payment of any required Taxes or Other Charges then due and payable, the failure by Lender or its agent to cause such payments to be made shall not constitute an Event of Default);

(iv)        if the Policies are not (A) delivered to Lender in accordance with the terms of this Agreement, or (B) kept in full force and effect, each in accordance with the terms and conditions hereof;

(v)         subject to the provisions of Article 8 hereof, if Borrower breaches or permits or suffers a breach of the provisions of Section 4.2.1; provided, however, that any such breach shall not be an Event of Default if such breach (A) is not intentional, (B) shall not have had a Material Adverse Effect, and (C) relates solely to a failure to deliver any notice required to be delivered pursuant to the terms and provisions of Article 8;

(vi)        if any representation or warranty made by Borrower or Guarantor in any Loan Document, or in any report, certificate, financial statement or other instrument, agreement or document furnished to Lender shall have been false or misleading in any material respect as of the date such representation or warranty was made; provided, however, that any such breach shall not be an Event of Default if such breach (A) is not intentional, (B) shall not have had a Material Adverse Effect, and (C) can be made true and correct by action of Borrower, Borrower shall have a period of thirty (30) days following written notice thereof to Borrower to undertake and complete all action necessary to make such representation or warranty, true and correct in all material respects; provided, further, that if the same cannot be cured within such thirty (30) day period, if Borrower commences to take action to cure such breach within such thirty (30) day period and thereafter diligently and expeditiously proceeds to cure the same, Borrower shall have such time as is reasonably necessary to effect such cure, but in no event in excess of an additional ninety (90) days;

(vii)       (A) if Borrower or any SPC Party shall make an assignment for the benefit of creditors or (B) upon the declaration by Lender in its sole and absolute discretion that the same constitutes an Event of Default, if Guarantor shall make an assignment for the benefit of creditors;

(viii)      (A) if a receiver, liquidator or trustee shall be appointed for Borrower or any SPC Party or if Borrower or any SPC Party shall be adjudicated a bankrupt or

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insolvent, or if any petition for bankruptcy, reorganization or arrangement pursuant to federal, state, local or foreign bankruptcy law, or any similar federal, state, local or foreign law, shall be filed by or against, consented to, or acquiesced in by, Borrower or any SPC Party, or if any proceeding for the dissolution or liquidation of Borrower or any SPC Party shall be instituted; provided, however, if such appointment, adjudication, petition or proceeding was involuntary and not consented to by Borrower or such SPC Party, upon the same not being discharged, stayed or dismissed within sixty (60) days or (B) upon the declaration by Lender in its sole and absolute discretion that the same constitutes an Event of Default, if a receiver, liquidator or trustee shall be appointed for Guarantor or if Guarantor shall be adjudicated a bankrupt or insolvent, or if any petition for bankruptcy, reorganization or arrangement pursuant to federal, state, local or foreign bankruptcy law, or any similar federal, state, local or foreign law, shall be filed by or against, consented to, or acquiesced in by, Guarantor, or if any proceeding for the dissolution or liquidation of Guarantor shall be instituted; provided, however, if such appointment, adjudication, petition or proceeding was involuntary and not consented to by the applicable Guarantor, upon the same not being discharged, stayed or dismissed within sixty (60) days;

(ix)         if Borrower attempts to assign its rights or delegate its duties under any of the Loan Documents or any interest herein or therein in contravention of the Loan Documents;

(x)          if any of the assumptions contained in any Insolvency Opinion is or shall become untrue in any material respect;

(xi)         if Borrower, any Liquor License Subsidiary or any SPC Party breaches any representation, warranty or covenant contained in Sections 3.1.24 or 4.1.15 hereof or on Schedule III attached hereto; provided, however, such violation or breach shall not constitute an Event of Default in the event that (A) such violation or breach is not intentional, (B) such violation or breach is immaterial, (C) such violation or breach shall be remedied in a timely and expedient manner and in any event within not more than sixty (60) days, and (D) within fifteen (15) Business Days following the request of Lender, but not prior to the date on which such violation or breach shall have been remedied in accordance with the immediately foregoing clause (C), Borrower delivers to Lender a substantive non-consolidation opinion, or a modification of the Insolvency Opinion, to the effect that such breach or violation shall not in any way impair, negate or adversely change the opinions rendered in the Insolvency Opinion, which opinion or modification and any counsel delivering such opinion or modification shall be acceptable to Lender in its reasonable discretion;

(xii)        if Borrower shall be in default beyond any applicable notice and cure period under any mortgage or security agreement covering any part of the Property whether it be superior or junior in Lien to the Security Instruments;

(xiii)       subject to Borrower’s right to contest as provided in Section 3.6 of each Security Instruments, if the Property becomes subject to any mechanic’s, materialman’s or other Lien except a Lien for Taxes not then due and payable (excluding Liens associated with any so-called property-assessed clean energy or similar loans);

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(xiv)      except as permitted herein, the alteration, improvement, demolition or removal of any of the Improvements without the prior written consent of Lender;

(xv)       if, without Lender’s prior written consent (as provided in Section 7.2.1 of this Agreement), (A) any Franchise Agreement is surrendered, terminated, canceled, modified, renewed, extended or otherwise allowed to expire (other than, in the case of a renewal or extension, a renewal or extension provided for in such Franchise Agreement), (B) the ownership, management or Control of an Affiliated Franchisor is Transferred other than in accordance with the terms hereof, (C) any Borrower defaults under any Franchise Agreement beyond the expiration of any applicable notice and/or cure periods thereunder, which default permits a Franchisor to terminate or cancel such Franchise Agreement or (D) any Borrower waives or releases any of its right or remedies under any Franchise Agreement in any material respect, unless in the case of an expiration or a termination or cancellation by the applicable Franchisor (other than any such termination or cancellation by an Affiliate Franchisor or that Borrower, Guarantor, any Affiliate of Borrower or Guarantor or any of their respective agents or representatives has consented to, solicited, requested or otherwise colluded with any Franchisor with respect to), the applicable Borrower, contemporaneously with such expiration, termination or cancellation, enters into a Replacement Franchise Agreement with a Qualified Franchisor in accordance with the applicable terms and conditions of this Agreement;

(xvi)      except as otherwise expressly permitted under the terms of the Loan Documents, if, without Lender’s prior written consent (as provided in Section 7.2.2(a) of this Agreement), (A) any Intermediate Management Agreement is surrendered, terminated, canceled, modified in any material respect, renewed, extended or otherwise allowed to expire (other than, in the case of a renewal or extension, a renewal or extension provided for in such Intermediate Management Agreement), (B) the ownership, management or Control of an Affiliated Manager is Transferred other than in accordance with the terms hereof, (C) any Borrower defaults under any Intermediate Management Agreement beyond the expiration of any applicable notice and/or cure periods thereunder, which default permits an Intermediate Manager to terminate or cancel such Intermediate Management Agreement or (D) any Borrower waives or releases any of its right or remedies under any Intermediate Management Agreement in any material respect, unless in the case of an expiration or a termination or cancellation by the applicable Intermediate Manager (other than any such termination or cancellation by an Affiliate Manager or that Borrower, Guarantor, any Affiliate of Borrower or Guarantor or any of their respective agents or representatives has consented to, solicited, requested or otherwise colluded with Intermediate Manager with respect to), the applicable Borrower, contemporaneously with such expiration, termination or cancellation, enters into a Replacement Management Agreement with a Qualified Manager in accordance with the applicable terms and conditions of this Agreement;

(xvii)     except as otherwise expressly permitted under the terms of the Loan Documents, if, without Lender’s prior written consent (as provided in Section 7.2.2(b) of this Agreement), (A) any Property Management Agreement is surrendered, terminated, canceled, modified, renewed, extended or otherwise allowed to expire (other than, in the case of a renewal or extension, a renewal or extension provided for in such Property Management Agreement), (B) any Borrower or any Intermediate Manager, as the case may be, defaults under any Property Management Agreement beyond the expiration of any applicable notice and/or cure

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periods thereunder, which default permits Property Manager to terminate or cancel the Property Management Agreement or (C) any Borrower or any Intermediate Manager, as the case may be, waives or releases any of its right or remedies under any Property Management Agreement in any material respect, unless in the case of an expiration or a termination or cancellation by the applicable Property Manager (other than any such termination or cancellation by an Affiliate Manager or that Borrower, Manager, Guarantor, any Affiliate of Borrower or Guarantor or any of their respective agents or representatives has consented to, solicited, requested or otherwise colluded with Property Manager with respect to), the applicable Borrower, contemporaneously with such expiration, termination or cancellation, enters into a Replacement Management Agreement with a Qualified Manager in accordance with the applicable terms and conditions of this Agreement;

(xviii)    except as otherwise expressly permitted under the terms of the Loan Documents, if, without Lender’s prior written consent (as provided in Section 7.2.3 of this Agreement), (A) the Beverage Concession Agreement is surrendered, terminated, canceled, modified in any material respect, renewed, extended or otherwise allowed to expire (other than, in the case of a renewal or extension, a renewal or extension provided for in the Beverage Concession Agreement), (B) the ownership, management or Control of Beverage Concessionaire is Transferred other than in accordance with the terms hereof, (C) Borrower defaults under the Beverage Concession Agreement beyond the expiration of any applicable notice and/or cure periods thereunder, which default permits Beverage Concessionaire to terminate or cancel the Beverage Concession Agreement or (D) Borrower waives or releases any of its right or remedies under the Beverage Concession Agreement in any material respect;

(xix)       if Borrower ceases to continuously operate any Property or any material portion thereof as a hotel for any reason whatsoever (other than temporary cessation in connection with any alteration, repair, renovation or restoration thereof undertaken with the prior written consent of Lender, and cessations of operations on portions of the Property permanently taken by condemnation) and Borrower fails to re-commence such continuous operations or satisfy each of the Closed Property Release Conditions within twenty (20) days of such cessation of continuous operations;

(xx)        if Borrower fails to replace Guarantor with a Satisfactory Replacement Guarantor upon the death or incapacity of Guarantor in accordance with the terms and provisions of Section 8.3 hereof;

(xxi)       a breach of the covenants set forth in Article XII of this Agreement, as applicable;

(xxii)      intentionally omitted;

(xxiii)     intentionally omitted;

(xxiv)    if Borrower shall continue to be in Default under any of the other terms, covenants or conditions of this Agreement not specified in subsections (i) to (xxi) above, (A) for ten (10) days after notice to Borrower from Lender, in the case of any Default which can be cured by the payment of a sum of money, or (B) for thirty (30) days after the

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earlier of (1) Borrower’s knowledge thereof and (2) notice to Borrower from Lender, in the case of any other Default; provided, however, that if such non-monetary Default is susceptible of cure but cannot reasonably be cured within such 30-day period; and provided, further, that Borrower shall have commenced to cure such Default within such 30-day period and shall thereafter diligently and expeditiously proceed to cure the same, such 30-day period shall be extended for such additional time as is reasonably necessary for Borrower in the exercise of due diligence to cure such Default, such additional period not to exceed ninety (90) days; or

(xxv)     if there shall be a default under any of the other Loan Documents beyond any applicable notice and/or cure periods contained in such Loan Documents, whether as to Borrower, Guarantor, Property Manager, Intermediate Manager, the Property or any other Person (other than Lender), or if any other such event shall occur or condition shall exist, and the effect of such event or condition is to accelerate the maturity of any portion of the Obligations or to permit Lender to accelerate the maturity of all or any portion of the Obligations.

(b)          Upon the occurrence and during the continuance of an Event of Default (other than an Event of Default described in clauses (vii), (viii) or (ix) above) and at any time thereafter Lender may, in addition to any other rights or remedies available to it pursuant to the Loan Documents or at law or in equity, take such action, without notice or demand, that Lender deems advisable to protect and enforce its rights against Borrower and in and to the Property, including declaring the Obligations to be immediately due and payable, and Lender may enforce or avail itself of any or all rights or remedies provided in the Loan Documents against Borrower and the Property, including all rights or remedies available at law or in equity; and upon and during the continuance of any Event of Default described in clauses (vii), (viii) or (ix) above, the Debt and all other Obligations of Borrower under the Loan Documents, including, without limitation, the Additional Interest and the Minimum Interest Required Payment, if applicable, shall immediately and automatically become due and payable, without notice or demand, and Borrower hereby expressly waives any such notice or demand, anything contained in any Loan Document to the contrary notwithstanding.

Section 10.2         Remedies.

(a)          Upon the occurrence and during the continuance of an Event of Default, all or any one or more of the rights, powers, privileges and other remedies available to Lender against Borrower under the Loan Documents executed and delivered by, or applicable to, Borrower or at law or in equity may be exercised by Lender at any time and from time to time, whether or not all or any of the Obligations shall be declared due and payable, and whether or not Lender shall have commenced any foreclosure proceeding or other action for the enforcement of its rights and remedies under any of the Loan Documents with respect to the Property. Any such actions taken by Lender shall be cumulative and concurrent and may be pursued independently, singly, successively, together or otherwise, at such time and in such order as Lender may determine in its sole discretion, to the fullest extent permitted by law, without impairing or otherwise affecting the other rights and remedies of Lender permitted by law, equity or contract or as set forth in the Loan Documents. Without limiting the generality of the foregoing, if an Event of Default is continuing (i) Lender shall not be subject to any “one action” or “election of remedies” law or rule, and (ii) all Liens and other rights, remedies or

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privileges provided to Lender shall remain in full force and effect until Lender has exhausted all of its remedies against the Property and the Security Instrument(s) has been foreclosed, sold and/or otherwise realized upon in satisfaction of the Obligations or the Obligations have been paid in full.

(b)          Upon the occurrence and during the continuance of an Event of Default, Lender shall have the right from time to time to partially foreclose the Security Instrument(s) in any manner and for any amounts secured by the Security Instrument(s) then due and payable as determined by Lender in its sole discretion including the following circumstances: (i) in the event Borrower defaults beyond any applicable grace period in the payment of one or more scheduled payments of principal and interest, Lender may foreclose the Security Instrument(s) to recover such delinquent payments, or (ii) in the event Lender elects to accelerate less than the entire Outstanding Principal Balance, Lender may foreclose the Security Instrument(s) to recover so much of the principal balance of the Loan as Lender may accelerate and such other sums secured by the Security Instrument(s) as Lender may elect. Notwithstanding one or more partial foreclosures, the Property shall remain subject to the Security Instrument(s) to secure payment of the sums secured by the Security Instrument(s) and not previously recovered.

(c)          Upon the occurrence and during the continuance of an Event of Default, Lender shall have the right from time to time to sever the Note and the other Loan Documents into one or more separate notes, mortgages and other security documents (the “Severed Loan Documents”) in such denominations as Lender shall determine in its sole discretion for purposes of evidencing and enforcing its rights and remedies provided hereunder. In such event, Borrower shall execute and deliver to Lender from time to time, promptly after the request of Lender, a severance agreement and such other documents as Lender shall request in order to effect the severance described in the preceding sentence, all in form and substance reasonably satisfactory to Lender. Borrower hereby absolutely and irrevocably appoints Lender as its true and lawful attorney, coupled with an interest, in its name and stead to make and execute all documents necessary or desirable to effect the aforesaid severance, Borrower ratifying all that its said attorney shall do by virtue thereof; provided, however, that Lender shall not make or execute any such documents under such power until five (5) Business Days after written notice has been given to Borrower by Lender of Lender’s intent to exercise its rights under such power. Borrower shall be obligated to pay all costs and expenses incurred in connection with the preparation, execution, recording and filing of the Severed Loan Documents. The Severed Loan Documents shall not contain any representations, warranties or covenants not contained in the Loan Documents and any such representations and warranties contained in the Severed Loan Documents will be given by Borrower only as of the Closing Date.

(d)          Any amounts recovered from the Property or any other collateral for the Loan after an Event of Default may be applied by Lender toward the payment of any interest and/or principal of the Loan and/or any other amounts due under the Loan Documents, including, without limitation, the Additional Interest and the Minimum Interest Required Payment, if applicable, in such order, priority and proportions as Lender in its sole discretion shall determine.

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Section 10.3         Lender’s Right to Perform. If Borrower fails to perform any covenant or obligation contained in the Loan Documents, without in any way limiting Lender’s right to exercise any of its rights, powers or remedies as provided under any of the Loan Documents or releasing Borrower from any covenant or obligation under the Loan Documents, Lender may, but shall have no obligation to, perform, or cause the performance of, such covenant or obligation, and all out-of-pocket costs, expenses, liabilities, penalties and fines of Lender incurred or paid in connection therewith shall be payable by Borrower to Lender upon demand, and if not paid shall be added to the Obligations (and to the extent permitted under applicable laws, secured by the Security Instrument(s) and the other Loan Documents) and shall bear interest at the Default Rate. Lender shall have no obligation to send notice to Borrower of any such failure.

Section 10.4         Remedies Cumulative. The rights, powers and remedies of Lender under this Agreement shall be cumulative and not exclusive of any other right, power or remedy which Lender may have against Borrower pursuant to the Loan Documents, or existing at law or in equity or otherwise. Lender’s rights, powers and remedies may be pursued singly, concurrently or otherwise, at such time and in such order as Lender may determine in Lender’s sole discretion. No delay or omission to exercise any remedy, right or power accruing upon an Event of Default shall impair any such remedy, right or power or shall be construed as a waiver thereof, but any such remedy, right or power may be exercised from time to time and as often as may be deemed expedient. A waiver of one Default or Event of Default with respect to Borrower shall not be construed to be a waiver of any subsequent Default or Event of Default by Borrower or to impair any remedy, right or power consequent thereon. Nothing contained herein or in the other Loan Documents shall be construed to grant Borrower any right to cure an Event of Default and each Event of Default shall continue unless and until the same is waived by Lender in writing in its sole and absolute discretion in accordance with the terms and provisions of the Loan Documents.

Article 11: MISCELLANEOUS

Section 11.1         Successors and Assigns; Assignments and Participations. Except as expressly permitted under Section 8.1, Borrower may not assign, transfer or delegate its rights or obligations under the Loan Documents without Lender’s prior written consent, and any attempted assignment, transfer or delegation without such consent shall be null and void. Lender may assign, pledge, participate, transfer or delegate, as applicable, to one or more Persons, all or a portion of its rights and obligations under the Loan Documents. The assigning Lender shall have no further obligations under the Loan Documents from and after the date of any such assignment or transfer. In connection with any such assignment, pledge, participation, transfer or delegation, Lender may disclose to the assignee, pledgee, participant, transferee or delegee or proposed assignee, pledgee, participant, transferee or delegee, as the case may be, any information relating to Borrower or any of its Affiliates or to any aspect of the Loan that has been furnished to Lender by or on behalf of Borrower or any of its Affiliates. All covenants, promises and agreements in this Agreement, by or on behalf of Borrower, shall inure to the benefit of the legal representatives, successors and assigns of Lender.

Section 11.2         Lender’s Discretion. Whenever pursuant to this Agreement (a) Lender exercises any right given to it to approve or disapprove any matter, (b) any arrangement or term is to be satisfactory to Lender, or (c) Lender is given the right to exercise judgment as to a

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particular matter, arrangement or term, the decision of Lender to approve or disapprove such matter, to decide whether such arrangement or term is satisfactory or not satisfactory or Lender’s exercise of judgment with respect to such matter, arrangement or term shall (except as is otherwise specifically herein provided) be in the sole and absolute discretion of Lender and shall be final and conclusive. Prior to a Securitization, whenever pursuant to this Agreement the Rating Agencies are given any right to approve or disapprove any matter, or any arrangement or term is to be satisfactory to the Rating Agencies, the decision of Lender to approve or disapprove such matter, or to decide whether arrangements or terms are satisfactory or not satisfactory, shall be substituted therefor, which such decision shall be based upon Lender’s determination of Rating Agency criteria (unless Lender has an independent approval right in respect of the matter at issue pursuant to the terms of this Agreement, in which case the discretion afforded to Lender in connection with such independent approval right shall apply instead).

Section 11.3         Governing Law.

(A)         THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, AND DELIVERED TO LENDER BY BORROWER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTE DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, 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 STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTE, AND THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

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

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American Realty Capital Hospitality Trust, Inc.
405 Park Avenue
New York, New York 10022

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND BORROWER 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 STATE OF NEW YORK. BORROWER (i) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (ii) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (iii) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.

Section 11.4         Modification, Waiver in Writing. No modification, amendment, extension, discharge, termination or waiver of any provision of any Loan Document, nor consent to any departure by Borrower therefrom, shall in any event be effective unless the same shall be in a writing signed by the party or parties against whom enforcement is sought, and then such waiver or consent shall be effective only in the specific instance, and for the specific purpose, for which given. Except as otherwise expressly provided herein, no notice to, or demand on Borrower, shall entitle Borrower to any other or future notice or demand in the same, similar or other circumstances.

Section 11.5         Delay Not a Waiver. Neither any failure nor any delay on the part of Lender in insisting upon strict performance of any term, condition, covenant or agreement, or exercising any right, power, remedy or privilege under any Loan Document, shall operate as or constitute a waiver thereof, nor shall a single or partial exercise thereof preclude any other future exercise, or the exercise of any other right, power, remedy or privilege. In particular, and not by way of limitation, by accepting payment after the due date of any amount payable under any Loan Document, Lender shall not be deemed to have waived any right either to require prompt payment when due of all other amounts due under the Loan Documents, or to declare a default for failure to effect prompt payment of any such other amount. Lender shall have the right to waive or reduce any time periods that Lender is entitled to under the Loan Documents in its sole and absolute discretion.

Section 11.6         Notices.

(a)          All notices, demands, requests, consents, approvals or other communications (any of the foregoing, a “Notice”) required, permitted or desired to be given

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hereunder shall be in writing and shall be sent by registered or certified mail, postage prepaid, return receipt requested, or delivered by hand or by reputable overnight courier addressed to the party to be so notified at its address hereinafter set forth, or to such other address as such party may hereafter specify in accordance with the provisions of this Section 11.6. Any Notice shall be deemed to have been received: (i) three (3) days after the date such Notice is mailed, if sent by registered or certified mail, (ii) on the date of delivery by hand, if delivered during business hours on a Business Day (otherwise on the next Business Day), and (iii) on the next Business Day, if sent by an overnight commercial courier, in each case addressed to the parties as follows:

If to Lender:	Ladder Capital Finance LLC 345 Park Avenue, 8th Floor New York, New York 10154 Attention: Pamela McCormack
with a copy to	Deutsche Bank AG, New York Branch 60 Wall Street New York, New York 10005 Attention: Robert Pettinato
with a copy to	DLA Piper LLP (US) 1251 Avenue of the Americas New York, New York 10020 Attention: Jeffrey B. Steiner, Esq.
	Situs Servicing
	4065 Westheimer
	Suite 700E
	Houston, TX 77056
	Attention: Ladder Portfolio Manager
and with a copy to:	Situs Asset Management
	Six Concourse Parkway
	Suite 1500
	Atlanta, GA 30328
	Attention: Ladder Portfolio Manager
If to Borrowers:	c/o American Realty Capital Hospitality Trust, Inc. 405 Park Avenue New York, New York 10022 Attention: Chief Executive Officer
with a copy to:	c/o American Realty Capital Hospitality Trust, Inc. 405 Park Avenue New York, New York 10022 Attention: General Counsel

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(b)          Any party may change the address to which any such Notice is to be delivered, by furnishing ten (10) days’ written notice of such change to the other parties in accordance with the provisions of this Section 11.6. Notices shall be deemed to have been given on the date as set forth above, even if there is an inability to actually deliver any such Notice because of a changed address of which no Notice was given, or there is a rejection or refusal to accept any Notice offered for delivery. Notice for any party may be given by its respective counsel. Additionally, Notice from Lender may also be given by Servicer and Lender hereby acknowledges and agrees that Borrower shall be entitled to rely on any Notice given by Servicer as if it had been sent by Lender.

Section 11.7         Trial by Jury. BORROWER AND LENDER EACH HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER AND LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER.

Section 11.8         Headings. The Article and/or Section headings and the Table of Contents in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

Section 11.9         Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under any Legal Requirements, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

Section 11.10       Preferences. Lender shall have the continuing and exclusive right to apply or reverse and reapply any and all payments by Borrower to any portion of the Obligations of Borrower hereunder. To the extent Borrower makes a payment or payments to Lender, which payment or proceeds or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, federal, state, local or foreign law, common law or equitable cause, then, to the extent of such payment or proceeds received, the Obligations hereunder or part thereof intended to be satisfied shall be revived and continue in full force and effect, as if such payment or proceeds had not been received by Lender.

Section 11.11      Waiver of Notice. Borrower shall not be entitled to any notices of any nature whatsoever from Lender except with respect to matters for which the Loan Documents specifically and expressly provide for the giving of notice by Lender to Borrower and except with respect to matters for which Borrower is not, pursuant to applicable Legal Requirements,

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permitted to waive the giving of notice. Borrower hereby expressly waives the right to receive any notice from Lender with respect to any matter for which the Loan Documents do not specifically and expressly provide for the giving of notice by Lender to Borrower.

Section 11.12      Remedies of Borrower. In the event that a claim or adjudication is made that Lender or its agents have acted unreasonably or unreasonably delayed acting in any case where, by law or under the Loan Documents, Lender or such agent, as the case may be, has an obligation to act reasonably or promptly, neither Lender nor its agents shall be liable for any monetary damages, and Borrower’s sole remedy shall be limited to commencing an action seeking injunctive relief or declaratory judgment. Any action or proceeding to determine whether Lender has acted reasonably shall be determined by an action seeking declaratory judgment.

Section 11.13      Expenses; Indemnity.

(a)          Borrower shall pay or, if Borrower fails to pay, reimburse Lender upon receipt of notice from Lender, for all actual, reasonable, out-of-pocket costs and expenses (including reasonable attorneys’ fees and disbursements) incurred by Lender in connection with (i) Borrower’s ongoing performance of and compliance with Borrower’s agreements and covenants contained in the Loan Documents on its part to be performed or complied with after the Closing Date, including, without limitation, confirming compliance with environmental and insurance requirements; (ii) Lender’s ongoing performance of and compliance with all agreements and covenants contained in the Loan Documents on its part to be performed or complied with after the Closing Date; (iii) the negotiation, preparation, execution, delivery and administration of any consents, amendments, waivers or other modifications to the Loan Documents and any other documents or matters requested by Borrower or Guarantor; (iv) the filing and recording fees and expenses, title insurance and reasonable fees and expenses of counsel for providing to Lender all required legal opinions, and other similar expenses incurred, in creating and perfecting the Liens in favor of Lender pursuant to the Loan Documents; (v) enforcing or preserving any rights, in response to third party claims or the prosecuting or defending of any action or proceeding or other litigation, in each case against, under or affecting Borrower, the Loan Documents, the Property or any other security given for the Loan; (vi) enforcing any Obligations of or collecting any payments due from Borrower or Guarantor under the Loan Documents or with respect to the Property or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of a “work-out” or of any Bankruptcy Action; and (vii) protecting Lender’s interest in the Property or any other security given for the Loan; (viii) any assignment of or franchisor/manager consent or approval relating to any comfort letter/tri-party agreement/non-disturbance agreement/assignment of franchise agreement and subordination of franchise fees or similar agreement in connection with an assignment, pledge, participation or transfer of the Loan; provided, however, that Borrower shall not be liable for the payment of any such costs and expenses to the extent the same arise by reason of the gross negligence, illegal acts, fraud or willful misconduct of Lender, as determined by a final non-appealable judgment of a court of competent jurisdiction. Any costs due and payable to Lender may be paid, at Lender’s election in its sole discretion, from any amounts in the Cash Management Account.

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(b)          Borrower shall indemnify, defend and hold harmless the Lender Indemnified Parties from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including, without limitation, the reasonable fees and disbursements of counsel for any Lender Indemnified Party in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not such Lender Indemnified Party shall be designated a party thereto), that may be imposed on, incurred by, or asserted against any Lender Indemnified Party in any manner relating to or arising out of (i) any default or breach by Borrower of its Obligations under, or any material misrepresentation by Borrower contained in, the Loan Documents; (ii) the use or intended use of the proceeds of the Loan; (iii) any materials or information provided by or on behalf of Borrower, or contained in any documentation approved by Borrower; (iv) ownership of the Security Instruments, the Property or any interest therein, or receipt of any Rents; (v) any accident, injury to or death of persons or loss of or damage to property occurring in, on or about the Property or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (vi) any use, nonuse or condition in, on or about the Property or on adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (vii) performance of any labor or services or the furnishing of any materials or other property in respect of the Property; (viii) any failure of the Property to comply with any Legal Requirement; (ix) any claim by brokers, finders or similar persons claiming to be entitled to a commission in connection with any Lease or other transaction involving the Property or any part thereof, or any liability asserted against such Lender Indemnified Party with respect thereto; and (x) the claims of any lessee of any portion of the Property or any Person acting through or under any lessee or otherwise arising under or as a consequence of any Lease (collectively, the “Indemnified Liabilities”); provided, however, that Borrower shall not have any obligation to the Lender Indemnified Parties hereunder to the extent that such Indemnified Liabilities arise (i) from the gross negligence, illegal acts, fraud or willful misconduct of the Lender Indemnified Parties, as determined by a final non-appealable judgment of a court of competent jurisdiction or (ii) after a foreclosure or Lender’s acceptance of a deed in lieu of foreclosure in respect of all of the Properties securing the Loan, so long as such Indemnified Liabilities do not result from (x) any act or circumstance occurring prior to such foreclosure or Lender’s acceptance of a deed in lieu of foreclosure, as applicable, or (y) any act of Borrower or any of its agents, Affiliates or employees. To the extent that the undertaking to indemnify, defend and hold harmless set forth in the preceding sentence may be unenforceable because it violates any law or public policy, Borrower shall pay the maximum portion that it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all Indemnified Liabilities incurred by the Lender Indemnified Parties. The provisions of Section 11.13(a) and this Section 11.13(b) shall survive any payment or prepayment of the Loan and any foreclosure or satisfaction of the Security Instruments.

(c)          Borrower hereby agrees to pay for or, if Borrower’s fails to pay, to reimburse Lender for, any fees imposed, and costs and expenses incurred, by any Rating Agency in connection with any Rating Agency review of the Loan or any consent, approval, waiver or confirmation obtained from such Rating Agency pursuant to the terms and conditions of the Loan Documents, and Lender shall be entitled to require payment of such fees, costs and expenses as a condition precedent to obtaining any such consent, approval, waiver or confirmation.

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Section 11.14      Schedules Incorporated. The Schedules and Exhibits annexed hereto are hereby incorporated herein as a part of this Agreement with the same effect as if set forth in the body hereof.

Section 11.15      Offsets, Counterclaims and Defenses. Any assignee of Lender’s interest in and to the Loan Documents shall take the same free and clear of all offsets, counterclaims and defenses which are unrelated to such documents which Borrower may otherwise have against any assignor of such documents, and no such unrelated counterclaim or defense shall be interposed or asserted by Borrower in any action or proceeding brought by any such assignee upon such documents and any such right to interpose or assert any such unrelated offset, counterclaim or defense in any such action or proceeding is hereby expressly waived by Borrower.

Section 11.16       No Joint Venture or Partnership; No Third Party Beneficiaries.

(a)          Borrower and Lender intend that the relationships created under the Loan Documents be solely that of borrower and lender. Nothing herein or therein is intended to create a joint venture, partnership, tenancy-in-common, or joint tenancy relationship between Borrower and Lender nor to grant Lender any interest in the Property other than that of mortgagee, beneficiary or lender.

(b)          The Loan Documents are solely for the benefit of Lender and nothing contained in the Loan Documents shall be deemed to confer upon anyone other than Lender any right to insist upon or to enforce the performance or observance of any of the Obligations contained herein or therein. All conditions to the obligations of Lender to make the Loan (and disburse Reserve Funds) hereunder are imposed solely and exclusively for the benefit of Lender and no other Person shall have standing to require satisfaction of such conditions in accordance with their terms or be entitled to assume that Lender will refuse to make the Loan (or make any disbursement of Reserve Funds) in the absence of strict compliance with any or all thereof and no other Person shall under any circumstances be deemed to be a beneficiary of such conditions, any or all of which may be freely waived in whole or in part by Lender if, in Lender’s sole discretion, Lender deems it advisable or desirable to do so.

Section 11.17       Publicity and Confidentiality.

(a)           All news releases, publicity or advertising by any Borrower or their Affiliates through any media intended to reach the general public which refers to the Loan Documents or the financing evidenced by the Loan Documents, to any Lender, the Affiliate of any Lender that acts as the issuer with respect to a Securitization or any of their other Affiliates shall be subject to the prior written approval of Lender; provided, however, that notwithstanding the foregoing, Borrower shall be entitled without Lender’s consent, to make disclosures necessary in order to comply with Legal Requirements applicable to Borrower, Guarantor or any of their Affiliates. Lender shall be permitted to share any information provided by Whitehall hereunder with the investment banking firms, lenders, investors, assignees of the Loan, Rating Agencies, accounting firms, law firms and other third-party advisory firms involved with the Loan and the Loan Documents or the applicable Secondary Market Transaction, provided that such third parties are subject to confidentiality agreements reasonably acceptable to Whitehall.

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(b)          Lender agrees, for the sole benefit of Whitehall (and not any successor to or assign of Whitehall), that any reports, statements or other information required to be delivered or provided under this Agreement, under the Loan Documents, or under a Replacement Guaranty and furnished at any time and from time to time by Borrower, Preferred Equity Investor, or a guarantor under a Replacement Guaranty and relating to Whitehall (“Furnished Information”) which is financial information with respect to Whitehall which is provided to Lender by or on behalf of Borrower, Preferred Equity Investor or Whitehall and which when delivered to Lender is specifically identified in writing as confidential (such information “Confidential Furnished Financial Information”) shall be kept confidential; except that summary financial information regarding Whitehall, including statements as to net worth, liquidity, total assets under management and similar statements of financial wherewithal with respect to Whitehall (“Summary Financial Information”), may be included in any Disclosure Document and may be disclosed to investment banking firms, lenders, investors, assignees of the Loan, Rating Agencies, accounting firms, law firms and other third-party advisory firms involved with the Loan and the Loan Documents or the applicable Secondary Market Transaction, provided that such parties are subject to confidentiality agreements reasonably acceptable to Whitehall. In addition, any other Confidential Furnished Financial Information may also be disclosed to any Rating Agency, underwriter or NRSRO; provided (i) each Rating Agency or underwriter to which such information is disclosed has executed its usual and customary confidentiality agreement and (ii) any NRSRO desiring access to any secured website containing such information shall, as a condition to its access to, have either furnished to the Securities and Exchange Commission the certification required under Rule 17g-5(e) of the Exchange Act or be required to agree to (or “click through”) such website’s confidentiality provisions. Nothing herein shall preclude Lender from disclosing any Confidential Furnished Financial Information (A) as required by any applicable Legal Requirement, (B) which is already publicly available as a result of disclosure by any other party, (C) in response to any order of any court or other Governmental Authority, or (D) if Lender is required to do so in connection with any litigation or similar proceeding; provided that in the case of clause (A), (C) or (D), Lender shall exercise reasonable efforts to give prior written notice of such requirement to Whitehall (to the extent it is lawful to do so) in order to permit Whitehall to, and shall reasonably cooperate, provided such cooperation shall be at no cost or expense to Lender, with Whitehall in its efforts to, seek a protective order at Whitehall’s sole cost and expense). Confidential Furnished Financial Information shall in no event be deemed to include Furnished Information pertaining to Whitehall’s investment in the Properties, including without limitation, the ownership structure of Borrower.

Section 11.18       Waiver of Marshalling of Assets. To the fullest extent permitted by law, Borrower, for itself and its successors and assigns, waives all rights to a marshalling of the assets of Borrower, Borrower’s members or partners, as applicable, and others with interests in Borrower, and of the Property, and shall not assert any right under any laws pertaining to the marshalling of assets, the sale in inverse order of alienation, homestead exemption, the administration of estates of decedents, or any other matters whatsoever to defeat, reduce or affect the right of Lender under the Loan Documents to a sale of the Property for the collection of the Obligations without any prior or different resort for collection or of the right of Lender to the payment of the Obligations out of the net proceeds of the Property in preference to every other claimant whatsoever.

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Section 11.19      Waiver of Offsets/Defenses/Counterclaims. Borrower hereby waives the right to assert a counterclaim, other than a compulsory counterclaim, in any action or proceeding brought against it by Lender or its agents or otherwise to offset any obligations to make the payments required by the Loan Documents. No failure by Lender to perform any of its obligations hereunder shall be a valid defense to, or result in any offset against, any payments which Borrower is obligated to make under any of the Loan Documents.

Section 11.20      Conflict; Construction of Documents; Reliance. In the event of any conflict between the provisions of this Agreement and any of the other Loan Documents, the provisions of this Agreement shall control. The parties hereto acknowledge that they were represented by competent counsel in connection with the negotiation, drafting and execution of the Loan Documents and that such Loan Documents shall not be subject to the principle of construing their meaning against the party which drafted same. Borrower acknowledges that, with respect to the Loan, Borrower shall rely solely on its own judgment and advisors in entering into the Loan without relying in any manner on any statements, representations or recommendations of Lender or any parent, subsidiary or Affiliate of Lender. Lender shall not be subject to any limitation whatsoever in the exercise of any rights or remedies available to it under any of the Loan Documents or any other agreements or instruments which govern the Loan by virtue of the ownership by it or any parent, subsidiary or Affiliate of Lender of any equity interest any of them may acquire in Borrower, and Borrower hereby irrevocably waives the right to raise any defense or take any action on the basis of the foregoing with respect to Lender’s exercise of any such rights or remedies. Borrower acknowledges that Lender engages in the business of real estate financings and other real estate transactions and investments which may be viewed as adverse to or competitive with the business of Borrower or its Affiliates.

Section 11.21       Brokers and Financial Advisors.

(a)          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. Borrower shall indemnify, defend and hold Lender harmless from and against any and all claims, liabilities, costs and expenses of any kind (including Lender’s attorneys’ fees and expenses) in any way relating to or arising from a claim by any Person that such Person acted on behalf of Borrower or Lender in connection with the transactions contemplated herein. The provisions of this Section 11.21 shall survive the expiration and termination of this Agreement and the payment of the Obligations. For the avoidance of doubt, the indemnity set forth in this Section 11.21 shall inure to the benefit of each Lender that has held an interest in the Loan at any time during the Term, including the initial named Lender hereunder.

(b)          Lender may pay additional compensation, fees, commissions or other payments to Broker relating to the origination, sale and/or securitization of the Loan, in addition to any other compensation, fees, commissions or other payments which may be paid by Borrower or any other party directly to Broker. Borrower hereby acknowledges and agrees that (i) the payment of any such compensation, fees, commissions or other payments are in addition to any other compensation, fees, commissions or other payments which may be paid by Borrower or any other party directly to Broker, (ii) the payment of any such compensation, fees, commissions or other payments may create a potential conflict of interest for Broker in its

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relationship with Borrower, and Lender is not responsible for any recommendation, services or advice given to Borrower by Broker, and (iii) no fiduciary or other special relationship exists or will exist between Borrower and Lender other than as lender and borrower. Borrower (A) acknowledges that (1) such compensation, fees, commissions or other payments may include a direct, one-time payment of an origination or similar fee, certain payments based on volume and/or size of referrals, profit-sharing payments and/or an ongoing financial interest in the Loan (including by acting as sub-servicer for the Loan) and (2) Borrower has had an opportunity to discuss the specifics of any compensation, fees, commissions or other payments with Broker to the extent Borrower deemed necessary and Borrower has independently determined to proceed with the Loan and (B) consents to any such arrangement and the payment by Lender to Broker of any such compensation, fees, commissions or other payments.

Section 11.22      Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the Obligations contained in the Note, this Agreement, the Security Instruments or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against Borrower, except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Security Instruments and the other Loan Documents, or in the Property, the Gross Revenue, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Gross Revenue and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Security Instruments and the other Loan Documents, shall not sue for, seek or demand any deficiency judgment against Borrower or Guarantor (whose liability shall be determined in accordance with the terms and conditions of the Guaranty) in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Security Instruments or the other Loan Documents. The provisions of this Section 11.22 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Security Instruments; (c) affect the validity or enforceability of any of the Loan Documents or any guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Security Instruments (in which event such deficiency judgment shall be used solely to realize on such collateral) or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the Property; or (g) constitute a waiver of the right of Lender to enforce the liability and obligation of Borrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Lender (including attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:

(i)          the breach of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity, the Security Instruments or any other

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Loan Document concerning environmental laws, hazardous substances and asbestos and any indemnification of Lender with respect thereto in any such document;

(ii)         intentional physical waste unless such waste was due to the fact that (A) funds to pay related charges were, at the time in question, available in the FF&E Reserve Account and Lender failed to pay (or make such funds available to pay) such charges unless Lender is restricted in any manner from making such funds available as a result of a legal impediment caused by any Borrower or any Affiliate of Borrower or (B) Gross Revenue received during the period in question is insufficient to pay all of Borrower’s Operating Expenses for the time period in question (including such relevant costs relating to the applicable Property) with respect to the Property or, after the occurrence and during the continuance of an Event of Default, the removal or disposal of any portion of the Property in violation of the Loan Documents;

(iii)        the misapplication, misappropriation or conversion by or on behalf of Borrowers of any of the following in violation of the terms of this Agreement: (A) any Insurance Proceeds paid by reason of any loss, damage or destruction to the Property, (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property, or (C) any Gross Revenue (including security deposits, advance deposits or any other deposits and Lease Termination Payments);

(iv)        any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Lender upon a foreclosure of the Property or deed in lieu thereof, except to the extent any such deposits were applied in accordance with the terms and provisions of the applicable Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or deed in lieu thereof;

(v)         the failure to pay charges (including charges for labor or materials) that can create Liens on any portion of the Property (except to the extent sufficient Reserve Funds allocable to such charges were on deposit and the same were not disbursed by Lender therefor in violation of the terms and conditions of the Loan Documents) to the extent such Liens are not bonded over or discharged in accordance with the Loan Documents;

(vi)        the failure to (A) pay Taxes or (B) obtain and maintain the fully paid for Policies in accordance with Section 5.1 hereof, provided that Borrower shall not be liable to the extent (i) Gross Revenue from the Property is insufficient to pay the same or (ii) funds to pay for Taxes or Insurance Premiums, as applicable, are available in the Tax Account or the Insurance Account, as applicable, and Lender failed to pay the same;

(vii)       the failure by Borrower or Guarantor to cooperate with Lender’s execution of a Secondary Market Transaction pursuant to the terms and provisions of Section 9.1 hereof or to comply with the terms of Section 9.3 hereof;

(viii)      the failure by Borrower to satisfy in full its indemnification obligations pursuant to and in accordance with the terms and provisions of Section 9.2 hereof;

(ix)         the commission of a criminal act by Borrower, Guarantor or any of their respective agents;

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(x)          Borrower or any SPC Party fails to comply with any representation, warranty or covenant set forth in Sections 3.1.24 or 4.1.15 or Schedule III attached hereto beyond all applicable notice and cure periods;

(xi)         in connection with the Loan or the Property (including, without limitation, any Lease), Borrower, Guarantor, any Affiliate of Borrower or Guarantor or any of their respective agents or representatives, engages in any action constituting willful or intentional misrepresentation, gross negligence or willful misconduct; or

(xii)        any claim made by the applicable union for unfunded pension obligations or other liabilities of the employer under the Collective Bargaining Agreement or any replacement thereof.

Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Obligations or to require that all collateral shall continue to secure all of the Obligations owing to Lender in accordance with the Loan Documents and (B) the Obligations shall be fully recourse to Borrower in the event that any of the following occur:

(1)         in connection with the Loan or the Property (including, without limitation, any Lease), Borrower, Guarantor, any Affiliate of Borrower or Guarantor or any of their respective agents or representatives, engages in any action constituting fraud;

(2)         Borrower or any SPC Party fails to comply with (A) any representation, warranty or covenant set forth in Sections 3.1.24 or 4.1.15 or Schedule III attached hereto and a court of competent jurisdiction orders a substantive consolidation of Borrower based, in whole or in part, on such failure, and/or (B) any representation, warranty or covenant set forth in any of clauses (a), (b), (d), (e), (k), (n) and/or (u) set forth in Schedule III attached hereto and such failure is a substantial factor in Borrower being the debtor in, and/or the Property or any portion thereof or interest therein becoming an asset in, an involuntary bankruptcy or insolvency proceeding brought by one or more Persons other than Lender or any Affiliate of Lender and such proceeding is not discharged, stayed or dismissed within ninety (90) days;

(3)         Borrower fails to obtain Lender’s prior written consent to any Indebtedness for borrowed money or any voluntary Lien (other than a Lien resulting from the failure to pay charges for labor or materials) encumbering the Property or any portion thereof or interest therein, except to the extent expressly permitted by the Loan Documents;

(4)         Borrower fails to obtain Lender’s prior written consent to any Transfer (including, without limitation, any change in Control), except to the extent expressly permitted by the Loan Documents;

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(5)         Borrower or any SPC Party files a voluntary petition under the Bankruptcy Code or any other federal, state, local or foreign bankruptcy or insolvency law;

(6)         an Affiliate, officer, director or representative which Controls, directly or indirectly, Borrower or any SPC Party files, or joins in the filing of, an involuntary petition against Borrower or any SPC Party under the Bankruptcy Code or any other federal, state, local or foreign bankruptcy or insolvency law, solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower or any SPC Party from any Person or colludes with or otherwise assists such Person;

(7)         Borrower or any SPC Party files an answer consenting to, or otherwise acquiescing in, or joining in, any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other federal, state, local or foreign bankruptcy or insolvency law, solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower or any SPC Party from any Person or colludes with or otherwise assists such Person;

(8)         any Affiliate, officer, director or representative which Controls Borrower or any SPC Party consents to, or acquiesces in, or joins in, an application for the appointment of a custodian, receiver, trustee or examiner for Borrower or any SPC Party or any portion of the Property;

(9)         Borrower or any SPC Party makes an assignment for the benefit of creditors (other than to Lender at Lender’s request), or admits, in writing or in any legal proceeding (other than to Lender at Lender’s request), its insolvency or inability to pay its debts as they become due; or

(10)        Borrower, or any SPC Party, Guarantor (or any Person comprising Borrower or any SPC Party or Guarantor), or any Affiliate of any of the foregoing, in connection with any enforcement action or exercise or assertion of any right or remedy by or on behalf of Lender under or in connection with the Note, the Security Instruments, the Guaranty or any other Loan Document, seeks a defense, judicial intervention or injunctive or other equitable relief of any kind or asserts in a pleading filed in connection with a judicial proceeding any defense against Lender or any right in connection with any security for the Loan, which a court of competent jurisdiction determines, pursuant to a final, non-appealable judgment, to have been frivolous, brought in bad faith, without merit (in the case of a defense) or unwarranted (in the case of a request for judicial intervention or injunctive or other equitable relief); or

(11)        if, without Lender’s prior written consent (as provided in Section 7.2.1 of this Agreement), any Franchise Agreement is surrendered, terminated, canceled, modified, renewed, extended or otherwise allowed to expire (other than, in the case of a renewal or extension, a renewal or extension provided for in the Franchise Agreement); provided, however, in the case of an expiration, the Obligations shall not be fully recourse to Borrower if, contemporaneously with such expiration, Borrower enters into a Replacement Franchise Agreement with a Qualified Franchisor in accordance with the applicable

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terms and conditions of this Agreement; provided, further, however, in the case of a termination or cancellation by Franchisor (other than any such termination or cancellation by an Affiliate Franchisor or that Borrower, Guarantor, any Affiliate of Borrower or Guarantor or any of their respective agents or representatives has consented to, solicited, requested or otherwise colluded with Franchisor with respect to), the Obligations shall not be fully recourse to Borrower if Borrower enters into a Replacement Franchise Agreement with a Qualified Franchisor in accordance with the applicable terms and conditions of this Agreement within thirty (30) days after such termination or cancellation, provided that Borrower shall nonetheless be recourse to Lender in respect of the Obligations to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Lender (including attorneys’ fees and costs reasonably incurred) arising out of or in connection with such termination or cancellation during such thirty (30) day period. Borrower’s recourse liability under this clause (11) shall be limited to the Allocated Loan Amount(s) for the applicable Property or Properties affected by the surrender, termination, cancellation, modification, renewal, extension or expiration of the applicable Franchise Agreement.

Section 11.23      Prior Agreements. The Loan Documents contain the entire agreement of the parties hereto and thereto in respect of the transactions contemplated hereby and thereby, and all prior agreements among or between such parties, whether oral or written, including the Term Sheet, are superseded by the terms of the Loan Documents.

Section 11.24       Administrative Agent.

(a)          Ladder, DBNY, and their respective successors and assigns with respect to the Loan, shall have the right, but not the obligation, by joint written notice to Borrowers, to appoint any Person to serve as an administrative agent (such Person, in such capacity, the “Administrative Agent”). An Administrative Agent shall be the contractual, non-fiduciary, agent of each Lender hereunder with authority to administer all of the rights, powers, and prerogatives of “Lender” hereunder and under the other Loan Documents. Ladder and DBNY hereby appoint Ladder as the initial Administrative Agent.

(b)          Ladder and any subsequent Administrative Agent shall have the right, by written notice to Borrowers, to resign as Administrative Agent. The holders of the Notes, by joint written notice to Borrowers, shall have the right to remove Ladder and any subsequently appointed Administrative Agent. Commencing with the appointment of an Administrative Agent, and continuing until such Administrative Agent resigns or is duly removed, Borrowers shall have the right to rely on such appointment of the Administrative Agent as the sole representative of the Lenders.

(c)          A duly appointed Administrative Agent shall have the sole right to exercise the rights, prerogatives, and powers given to “Lender” under this Agreement and the other Loan Documents, including any consent, approval and waiver rights of “Lender. Borrower acknowledges that notwithstanding any Lender’s role as Administrative Agent, certain actions by any Administrative Agent may require such Administrative Agent to secure the consent of some or all Lenders pursuant to the applicable agreement among the Lenders.

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(d)          An Administrative Agent shall have the right, by written notice to Borrowers, to delegate any of its rights, prerogatives, and powers to a Servicer.

(e)          As between Lenders, nothing in this Section 11.24 shall be deemed to amend any so-called “Co-Lender Agreement” between the Lenders. As between the Lenders, in the event of any conflict between this Section 11.24 and such a Co-Lender Agreement, the Co-Lender Agreement shall control. However, Borrowers shall not be deemed to be on notice of any such Co-Lender Agreement or the terms thereof, and the terms of any such Co-Lender Agreement shall not be construed to impair Borrower’s right to rely on the authority of the Administrative Agent.

(f)          The liabilities of Ladder and DBNY shall be several and not joint, (i) neither Ladder nor DBNY shall be responsible for the obligations of DBNY or Ladder, respectively, and (ii) each of Ladder and DBNY shall be liable to Borrower only for that portion of the Loan funded by such Lender. Notwithstanding anything to the contrary herein, all indemnities by Borrowers and obligations for costs, expenses, damages or advances set forth herein shall run to and benefit each Lender based on the proportion of the Loan funded by such Lender.

(g)          Each of Ladder and DBNY agrees that it has, independently and without reliance on any other Lender, and based on such documents and information as it has deemed appropriate, made its own credit analysis of Borrowers, Guarantor and their respective Affiliates and decision to enter into this agreement and that it will, independently and without reliance upon any other Lender, and based on such documents and information as it shall deem appropriate at 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.

Section 11.25       Servicer.

(a)          At the option of Lender, the Loan may be serviced by a master servicer, primary servicer, special servicer and/or trustee (any such master servicer, primary servicer, special servicer and trustee, together with its agents, designees or nominees, collectively, “Servicer”) selected by Lender and Lender may delegate all or any portion of its responsibilities under the Loan Documents to the Servicer pursuant to a pooling and servicing agreement, servicing agreement, special servicing agreement and/or other agreement providing for the servicing of one or more mortgage loans (collectively, the “Servicing Agreement”) between Lender and Servicer. Borrower shall be responsible for any reasonable set-up fees and any other initial costs relating to or arising under the Servicing Agreement as well as for payment of a scheduled monthly servicing fee not to exceed two (2) basis points per annum. In addition, Borrower shall pay (i) any fees and expenses of Servicer (including, without limitation, out-of-pocket attorneys’ fees and disbursements) in connection with any release of the Property or a portion thereof, any prepayment, defeasance, transfer, assumption, amendment or modification of the Loan, any documents or other matters requested by Borrower or Guarantor, any special servicing or workout of the Loan or enforcement of the Loan Documents, including, without limitation, any advances made by Servicer and interest on such advances, any liquidation fees in connection with the exercise of any or all remedies permitted under this Agreement and (ii) the costs of all property inspections and/or appraisals of the Property (or any updates to any existing

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inspection or appraisal) that a Servicer may be required to obtain (other than the cost of regular annual inspections required to be borne by Servicer under the Servicing Agreement); provided, however, that Borrower shall not be responsible for payment of any fees or expenses required to be borne by, and not reimbursable to, Servicer. Without limiting the generality of the foregoing, Servicer shall be entitled to reimbursement of costs and expenses as and to the same extent (but without duplication) as Lender is entitled thereto pursuant to the terms of the Loan Documents. Borrower’s obligations under this Section 11.25 are secured by the Security Instruments.

(b)          Upon notice thereof from Lender, Servicer shall have the right to exercise all rights of Lender and enforce all obligations of Borrower and Guarantor under the Loan Documents.

(c)          Provided Borrower shall have received notice from Lender of Servicer’s address, Borrower shall deliver, and cause to be delivered, to Servicer duplicate originals of all notices and other documents and instruments which Borrower and/or Guarantor deliver to Lender pursuant to the Loan Documents. No delivery of any such notices or other documents shall be of any force or effect unless delivered to Lender and Servicer as provided in this Section 11.24(c).

Section 11.26       Refinancing Loan. Borrowers shall not obtain or enter into any binding agreement to obtain any financing to refinance, directly or indirectly, all or any portion of the Loan (a “Refinancing Loan”), or any commitment for a Refinancing Loan (a “Refinancing Loan Commitment”), unless and until Borrowers shall have complied with this Section 11.26.

11.26.1    Intentionally Omitted.

11.26.2    Right of First Refusal

(a)          Borrowers shall, from time to time during the Term, give Ladder a written notice (a “Financing Notice”) setting forth a description in reasonable detail of any proposal by another Person to provide a Refinancing Loan or Refinancing Commitment, whether by way of a credit facility, mortgage repurchase facility or otherwise (each, a “Proposed Financing”), including the Refinancing Material Terms of any such Proposed Financing. The Financing Notice shall be delivered within ten (10) Business Days following Borrowers’ and such Person’s agreement with respect to the terms of the Proposed Financing.

(b)          During the ten (10) Business Day period commencing on the date Ladder receives a Financing Notice, Ladder shall have the option (but not the obligation) to provide financing for Borrowers on terms which shall match the Refinancing Material Terms of the Proposed Financing (“Ladder’s Proposed Financing”) by giving Borrowers written notice (the “Exercise Notice”); provided that the non-material terms of Ladder’s Proposed Financing may differ from the non-material terms of the Proposed Financing. Upon Ladder giving an Exercise Notice, Borrowers and Ladder shall negotiate in good faith the non-material terms of Ladder’s Proposed Financing, and diligently pursue the consummation of a financing with Ladder on the terms of Ladder’s Proposed Financing or such other terms as Borrowers and Ladder may agree. Borrowers may at any time and from time to time elect not to refinance.

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(c)          If (i) Ladder fails to give an Exercise Notice during such ten (10) Business Day period or (ii) Ladder gives an Exercise Notice during such ten (10) Business Day period but after diligent good faith efforts Ladder and Borrowers shall fail to enter into a nonbinding term sheet (which shall not be deemed to be a lending commitment) with Ladder within twenty-one (21) days (or such longer period as is agreed to by Ladder and Borrowers) after the giving of the Exercise Notice (other than by reason of Borrowers failing to negotiate in good faith, diligently provide diligence materials, perform its obligations under the preceding paragraph or under the terms and conditions of Ladder’s Proposed Financing), then Lender shall be deemed to have elected not to provide financing on terms which match the Refinancing Material Terms of the Proposed Financing, and Borrowers may thereafter proceed with the Proposed Financing with the Person referred to in the related Financing Notice upon the terms thereof; provided, however, if within ninety (90) days after the deemed election by Lender to not provide financing as set forth above, Borrower does not consummate the Proposed Financing or the Refinancing Material Terms of the Proposed Financing shall be materially less favorable to Borrowers than those terms originally identified in the Financing Notice (provided that such ninety (90) day period shall be extended for up to an additional thirty (30) days if Borrowers and the Person referred to in the related Financing Notice are diligently and in good faith pursuing the consummation of such Proposed Financing), then Ladder’s rights hereunder will renew and Borrower shall again be obligated to comply with the provisions set forth in this Section 11.26.

11.26.3         For the purposes of this Section 11.26: (a) “Refinancing Material Terms” shall mean, collectively, the term of the facility(ies), the principal amount of the facility(ies), the type(s) of facility(ies) (e.g., mortgage, mezzanine and/or preferred equity; fixed rate or floating rate; interest only or amortization), collateral, interest rate, advance rate, points and other fees, types of recourse, identity of guarantors, types of reserves, required equity and any material terms that are unique to the Properties, Borrowers or sponsor; and (b) “Ladder” shall include Ladder and any Affiliate thereof.

11.26.4         Lender Not Liable. No Lender shall be liable in any manner whatsoever for (i) failure to deliver any notice or documents specified herein or (ii) its failure to continue to consider whether or not it will commit to extend any Refinancing Loan or issue any Refinancing Loan Commitment.

11.26.5         Application of this Section. This Section 11.26 shall apply each and every time that Borrower seeks a Refinancing Loan or Refinancing Loan Commitment until one or more Refinancing Loans is/are consummated which, in the aggregate, refinance the entire Loan in accordance with the terms of this Agreement, after which this Section 11.26 shall have no further effect.

11.26.6         Preferred Equity. The terms and provisions of this Section 11.26 shall not apply from and after a Permitted Preferred Equity Changeover Event until such time, if ever, as ARCHOP shall Control Borrowers pursuant to a Transfer contemplated pursuant to Section 8.2(e) hereof.

Section 11.27       Joint and Several Liability. If more than one Person has executed any of the Loan Documents as “Borrower,” the representations, covenants, warranties and obligations of all such Persons under such Loan Documents shall be joint and several.

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Section 11.28      Creation of Security Interest. Notwithstanding any other provision set forth in the Loan Documents, Lender may at any time create a security interest in all or any portion of its rights under any of the Loan Documents (including, without limitation, payments owing to it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System or to secure a borrowing by Lender or its Affiliates from any Person that purchases or funds financial assets.

Section 11.29       Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument.

Section 11.30       Set-Off. In addition to any rights and remedies of Lender provided by this Agreement and by law, Lender shall have the right, without prior notice to Borrower, any such notice being expressly waived by Borrower to the extent permitted by Legal Requirements, upon any amount becoming due and payable by Borrower 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 accordance with Legal Requirements, 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 Lender or any Affiliate thereof to or for the credit or the account of Borrower. Lender agrees promptly to notify Borrower after any such set-off and application made by Lender; provided that the failure to give such notice shall not affect the validity of such set-off and application.

Section 11.31      Certain Additional Rights of Lender (VCOC). Notwithstanding anything to the contrary contained in the Loan Documents, Lender shall have:

(a)          the right to routinely consult with and advise Borrower’s management regarding the significant business activities and business and financial developments of Borrower, including, but not limited to, with respect to (i) annual operating and capital budgets, (ii) insurance, (iii) material leases and lease forms, (iv) property management and leasing agents and amendments, modifications or termination of any agreements with such agents, and (v) changes in business; provided, however, that such consultations shall not include discussions of environmental compliance programs or disposal of hazardous substances. Consultation meetings should occur on a regular basis (no less frequently than quarterly) with Lender having the right to call special meetings at any reasonable times upon reasonable notice;

(b)          the right, in accordance with the terms of this Agreement, to examine the books and records of Borrower at any reasonable times upon reasonable notice;

(c)          the right, in accordance with the terms of this Agreement, including, without limitation, Section 4.1.7 hereof, to receive monthly, quarterly and year-end financial reports, including balance sheets, statements of income, shareholder’s equity and cash flow, a management report and schedules of outstanding indebtedness; and

(d)          the right, without restricting any other rights of Lender under this Agreement (including any similar right), to approve any acquisition by Borrower of any other

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significant property (other than personal property required for the day to day operation of the Property) and to restrict any financing and/or Indebtedness with respect thereto.

Article 12:

MANDATORY DE-LEVERAGING OF PROPERTIES

Section 12.1         Application of QCR Redemption Amounts. In the event of the occurrence of any Qualified Capital Raise during any calendar month, the Pool II Common Equity Investors shall cause an amount equal to the QCR Redemption Amount for such Qualified Capital Raise (together with an accounting of all Qualified Capital Raises that occurred during such month) to be contributed by the Pool II Common Equity Investors to Pool II Holdco by no later than the fifth (5th) day of the next calendar month (or the next Business Day if such 5th day is not a Business Day). Immediately thereafter, provided that no Event of Default has occurred and is occurring, Pool II Holdco shall distribute such amount as provided in Section 8.4 of the Pool II Holdco Operating Agreement.

Section 12.2         Pro-Rata De-Leveraging With Pool I. Without limiting Section 12.1, concurrently with the occurrence of any Qualified Pool I De-Leveraging, Pool II Holdco shall distribute to the Pool II Preferred Equity Investors an amount equal to twenty eight and 74/100 percent (28.74%) of the amount of the Qualified Pool I De-Leveraging, but only to the extent that the following conditions are satisfied:

(a)          No Event of Default has occurred and is continuing.

(b)          The source of capital for the Qualified Pool I De-Leveraging was a contribution of capital to Pool I Holdco, and the direct or indirect source of such capital contribution was a Qualified Capital Raise.

Section 12.3         Prohibition on Amendments Impacting Mandatory De-Leveraging. Without Lender’s prior written consent:

(a)          Neither the parties to the Pool I Holdco Operating Agreement nor their Affiliates shall amend, waive any rights relating to, or enter into any new agreements pertaining to any of the following: (i) Article 8 of the Pool I Holdco Operating Agreement (or any definitions relating thereto), or (ii) any other term or condition of the Pool I Holdco Operating Agreement to the extent that such amendment could impact the distribution of proceeds of a Qualified Capital Raise to the Preferred Equity Investors or Pool I Preferred Equity Investors.

(b)          Neither the parties to the Pool II Holdco Operating Agreement nor their Affiliates shall amend, waive any rights relating to, or enter into any new agreements pertaining to any of the following: (i) Article 8 of the Pool II Holdco Operating Agreement (or any definitions relating thereto), or (ii) any other term or condition of the Pool II Holdco Operating Agreement to the extent that such amendment could impact the distribution of proceeds of a Qualified Capital Raise to the Preferred Equity Investors or Pool I Preferred Equity Investors.

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Section 12.4         Reporting.

(a)          Not later than the fifth (5th) day of each calendar month (or the next Business Day if such 5th day is not a Business Day), Borrower shall deliver to Lender:

(i)          An accounting of all Qualified Capital Raises that occurred during the prior month and the QCR Redemption Amount for each such Qualified Capital Raise.

(ii)         Evidence, in reasonable detail, confirming that the contributions and distributions required by Section 12.1 hereof occurred.

(iii)        An accounting of any Qualified Pool I De-Leveraging that occurred during the prior month.

(iv)        Evidence, in reasonable detail, confirming that the distributions required by Section 12.2 hereof occurred.

(b)          Borrower shall deliver to Lender written notice, accompanied by reasonable detail, of the occurrence of any of the following within three (3) Business Days after such occurrence:

(i)          Any amendment to the Pool I Holdco Operating Agreement or any waiver of any material right thereunder.

(ii)         Any amendment to the Pool II Holdco Operating Agreement or any waiver of any material right thereunder.

(iii)        Any new agreement or amendment to an existing agreement to which Borrower, any party to the Pool I Holdco Operating Agreement, or Pool II Holdco Operating Agreement, or any of their Affiliates is a party, to the extent that such new agreement or amendment could impact the distribution of proceeds of a Qualified Capital Raise to the Preferred Equity Investors or Pool I Preferred Equity Investors.

(iv)        An accounting of any Qualified Pool I De-Leveraging.

Section 12.5         Expiration. This Article 12 shall be of no further force or effect following a Permitted Common Equity Buyout Event.

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

LENDER:
LADDER CAPITAL FINANCE LLC,
a Delaware limited liability company
By:
	Name:
	Title:
DEUTSCHE BANK AG, NEW YORK BRANCH,  a branch of Deutsche Bank AG, a German Bank
By:
	Name:
	Title:
By:
	Name:
	Title:
BORROWERS:
[BORROWERS TO PROVIDE],
a [_____________________________]
By:
	Name:
	Title:

SCHEDULE I

DEFINITIONS

“Acceptable Tenant Estoppel Certificate” shall mean a fully-executed estoppel certificate from the applicable Tenant(s) in form and substance satisfactory to Lender that, in each case, affirms the applicable Lease(s) as being in full force and effect and provides, among other things (i) that such Tenant has accepted and is occupying all of the space demised under such Lease, is open for business and is paying full, unabated rent in accordance with such Lease, (ii) that all of the obligations of Borrower, as landlord under such Lease, have been duly performed, completed and paid for, including, without limitation, any obligations of Borrower to make or to pay or reimburse such Tenant for any tenant improvements and leasing commissions, (iii) that any improvements described in such Lease have been constructed in accordance therewith and have been accepted by such Tenant, (iv) that such Tenant is not then entitled to any concession or rebate of Rent or other charges from time to time due and payable under such Lease, and (iv) that there are no defaults by Borrower or such Tenant under such Lease.

“Account” shall mean an Eligible Account at the Cash Management Bank controlled by Lender.

“Act” shall have the meaning set forth in clause (cc)(viii) of Schedule III attached hereto.

“Additional Interest” shall mean an amount equal to one and one-quarter percent (1.25%) of the original principal amount of the Loan.

“Adjusted Operating Expenses” shall mean, as of any date of determination by Lender, the actual Operating Expenses incurred during the preceding twelve (12) month period using the greater of (i) assumed management fees of four percent (4.0%) of Gross Revenue and (ii) actual management fees incurred; provided, however, such Operating Expenses shall be adjusted by Lender to reflect actual increases in Taxes, Other Charges, Insurance Premiums and utility charges, and all other expenses shall be adjusted by the CPI; provided, further, however, in the event that Borrower has failed to timely deliver the financial statements required pursuant to this Agreement, Lender shall determine the amount of Adjusted Operating Expenses in its sole and absolute discretion.

“Affected Properties” shall have the meaning set forth in Section 9.1(k).

“Affiliate” shall mean, as to any Person, any other Person that (i) owns directly or indirectly twenty percent (20%) or more of all equity interests in such Person, (ii) is in Control of, is Controlled by or is under common ownership or Control with such Person, (iii) is a director or executive officer of such Person or of an Affiliate of such Person, and/or (iv) is the spouse, issue or parent of such Person. For the avoidance of doubt, the Preferred Equity Investors shall not constitute Affiliates of the Borrower until a change in Control of Pool II Holdco.

“Affiliated Franchisor” shall mean any Franchisor that is an Affiliate of Borrower, any SPC Party or Guarantor.

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“Affiliated Manager” shall mean any Property Manager or Intermediate Manager that is an Affiliate of Borrower, any SPC Party or Guarantor.

“Agreement” shall have the meaning set forth in the introductory paragraph hereto.

“ALTA” shall mean American Land Title Association, or any successor thereto.

“Allocated Loan Amount” shall mean with respect to each of the Properties, the amount shown with respect to such Property on Schedule IX attached hereto.

“Alteration Threshold” shall mean (a) with respect to any individual Property an amount equal to three percent (3%) of its Allocated Loan Amount and (b) with respect to all Properties, an aggregate amount of Five Million Dollars ($5,000,000).

“Annual Budget” shall mean the operating and capital budget for the Property setting forth, on a month-by-month basis, in reasonable detail, each line item of Borrower’s good faith estimate of anticipated Gross Revenue, Operating Expenses and Capital Expenditures for the applicable Fiscal Year.

“Applicable Minimum Interest Amount” shall mean (i) in connection with any prepayment or repayment of the Loan in whole or in part or the acceleration thereof in accordance with the terms of the Loan Documents prior to the commencement of the Extension Period, an amount equal to the interest that would have accrued hereunder on the original principal amount of the Loan of $227,000,000, or the portion being prepaid, as applicable, commencing on the Closing Date and through, but not including, the Monthly Payment Date occurring in September 2015 based on the LIBOR Interest Rate or Base Rate, as the case may be, in effect on the date of determination, and (ii) in connection with any prepayment or repayment of the Loan in whole or in part or the acceleration thereof in accordance with the terms of the Loan Documents during the Extension Period, an amount equal to the interest that would have accrued hereunder on the outstanding principal balance of the Loan as of the commencement of the Extension Period, or the portion thereof being prepaid, as applicable, commencing on the Monthly Payment Date occurring in March 2017 and through, but not including, the Monthly Payment Date occurring in September 2017 based on the LIBOR Interest Rate or Base Rate, as the case may be, in effect on the date of determination.

“Applicable Spread” shall mean six percent (6.00%).

“Appraisal” shall mean an appraisal of one or more Properties, as applicable, prepared not more than ninety (90) days prior to the relevant date with respect to which an appraisal shall be required hereunder by a member of the American Institute of Real Estate Appraisers selected by Lender, which appraisal shall (i) meet the minimum appraisal standards for national banks promulgated by the Comptroller of the Currency pursuant to Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended (FIRREA), (ii) be prepared on as “as is” basis, and (iii) otherwise be in form and substance satisfactory to Lender. Lender shall endeavor to cause the appraiser to prepare the Appraisal using a Portfolio Valuation to the extent that the appraiser (x) is permitted to prepare appraisals using such methodology, (y) prepares appraisals using such methodology for similar portfolios of Properties, and (z) determines that such methodology is an appropriate valuation method for the Properties; provided, however, that

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Borrower hereby acknowledges that the appraiser may determine that a different valuation method is appropriate and Lender shall not have any liability hereunder as a result of any such determination.

“Approved Annual Budget” shall have the meaning set forth in Section 4.1.7(e).

“Approved Capital Expenditures” shall mean Capital Expenditures incurred by Borrower and either (i) included in the Approved Annual Budget or (ii) approved by Lender, which approval shall not be unreasonably withheld or delayed.

“Approved FF&E Expenses” shall mean amounts expended by Borrower for FF&E and either (i) included in the Approved Annual Budget or (ii) approved by Lender, which approval shall not be unreasonably withheld or delayed.

“Approved Leasing Expenses” shall mean actual out-of-pocket expenses incurred by Borrower in leasing space at the Property pursuant to Leases entered into in accordance with the Loan Documents, including brokerage commissions and tenant improvements, which expenses (i) are (a) specifically approved by Lender in connection with approving the applicable Lease, (b) incurred in the ordinary course of business and on market terms and conditions in connection with Leases which do not require Lender’s approval under the Loan Documents, and Lender shall have received and approved a budget for such tenant improvement costs and a schedule of leasing commissions payments payable in connection therewith, or (c) otherwise approved by Lender, which approval shall not be unreasonably withheld or delayed, and (ii) are substantiated by executed Lease documents and brokerage agreements.

“Approved Operating Expenses” shall mean Operating Expenses incurred by Borrower which (i) are included in the Approved Annual Budget for the current calendar month, (ii) are for real estate taxes, insurance premiums, electric, gas, oil, water, sewer or other utility service to the Property, (iii) are for property management fees exclusive of any fees that are in the nature of incentive management fees or other premiums payable to any Property Manager and Intermediate Manager under the Property Management Agreement and the Intermediate Management Agreement, as applicable, such amounts not to exceed, in the aggregate, four percent (4.0%) of the monthly Gross Revenue, (iv) are for franchise fees payable to Franchisor under the Franchise Agreement, or (v) have otherwise been approved by Lender; provided, however, such Approved Operating Expenses shall also include, for any calendar month in which Operating Expenses exceed the Monthly Operating Expense Budgeted Amount, the amount of such excess Operating Expenses up to and not to exceed ten percent (10%) of the Monthly Operating Expense Budgeted Amount for such calendar month as to which Borrowers provide to Lender a reasonably detailed explanation of the reasons for and expenditures resulting in Operating Expenses exceeding the Monthly Operating Expense Amount.

“ARCHOP” shall mean American Realty Capital Hospitality Operating Partnership, L.P., a Delaware limited partnership.

“Assignment of Beverage Concession Agreement” shall mean that certain Liquor License Agreement, dated as of February 27, 2015, among Secured Parties, ARC Hospitality Portfolio II NTC TRS, LP, ARC Hospitality Portfolio II TX Beverage Company, LLC and ARC

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Hospitality Portfolio II NTC Owner, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Assignment of Beverage Management Agreement” shall mean that certain Assignment of Management Agreement and Subordination of Fees, dated as of February 27, 2015, among Secured Parties, ARC Hospitality Portfolio II NTC TRS, LP, ARC Hospitality Portfolio II NTC Owner, LP, Beverage Concessionaire, Crestline Hotels and Resorts LLC, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Assignment of Franchise Agreement” shall mean those certain agreements set forth on Schedule XVIII attached hereto, dated as of the date hereof, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Assignment of Interest Rate Protection Agreement” shall have the meaning set forth in Section 2.8.1(b).

“Assignment of Intermediate Management Agreement” shall mean, collectively, that certain (i) Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) (Crestline), dated as of February 27, 2015, among ARC Hospitality Portfolio II NTC TRS, LP and ARC Hospitality Portfolio II TRS, LLC to Secured Parties and consented and agreed to by American Realty Capital Hospitality Grace Portfolio, LLC and ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II NTC Owner, LP, (ii) Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) (Pillar), dated as of February 27, 2015, among ARC Hospitality Portfolio II MISC TRS, LP to Secured Parties and consented and agreed to by American Realty Capital Hospitality Grace Portfolio, LLC and ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II NTC Owner, LP, (iii) Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) (McKibbon), dated as of February 27, 2015, among ARC Hospitality Portfolio II NTC TRS, LP and ARC Hospitality Portfolio II MISC TRS, LLC to Secured Parties and consented and agreed to by American Realty Capital Hospitality Grace Portfolio, LLC, ARC Hospitality Portfolio II Owner, LLC, and ARC Hospitality Portfolio II NTC Owner, LP, (iv) Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) (Hilton), dated as of February 27, 2015, among ARC Hospitality Portfolio II HIL TRS, LP to Secured Parties and consented and agreed to by American Realty Capital Hospitality Grace Portfolio, LLC and ARC Hospitality Portfolio II Owner, LLC, (v) Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) (Courtyard Houston), dated as of February 27, 2015, among ARC Hospitality Portfolio II NTC HIL TRS, LP to Secured Parties and consented and agreed to by American Realty Capital Hospitality Grace Portfolio, LLC and ARC Hospitality Portfolio II NTC Owner, LP and (vi) Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) (Stratford), dated as of February 27, 2015, among ARC Hospitality TRS Stratford, LLC to Secured Parties and consented and agreed to by American Realty Capital Hospitality Grace Portfolio, LLC and ARC Hospitality Stratford, LLC, as each of the foregoing may be amended, restated, replaced, supplemented or otherwise modified from time to time.

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“Assignment of Leases” shall mean that certain first priority Assignment of Leases and Rents, dated as of the date hereof, from Borrower, as assignor, to Lender, as assignee, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Assignment of Property Management Agreement” shall mean, collectively, that certain (i) Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) (Crestline), dated as of February 27, 2015, among ARC Hospitality Portfolio II NTC TRS, LP and ARC Hospitality Portfolio II TRS, LLC to Secured Parties and consented and agreed to by ARC Hospitality Portfolio II Owner, LLC, ARC Hospitality Portfolio II NTC Owner, LP, American Realty Capital Hospitality Properties, and LLC Crestline Hotels & Resorts, LLC, (ii) Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) (Pillar) (Management Agreement), dated as of February 27, 2015, among ARC Hospitality Portfolio II MISC TRS, LP to Secured Parties and consented and agreed to by, ARC Hospitality Portfolio II Owner, LLC, ARC Hospitality Portfolio II NTC Owner, LP American Realty Capital Hospitality Properties and LLC Pillar Hotels and Resorts, L.P., (iii) Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) (McKibbon), dated as of February 27, 2015, among ARC Hospitality Portfolio II NTC TRS, LP and ARC Hospitality Portfolio II MISC TRS, LLC to Secured Parties and consented and agreed to by ARC Hospitality Portfolio II Owner, LLC, ARC Hospitality Portfolio II NTC Owner, LP, American Realty Capital Hospitality Properties, LLC and McKibbon Hotel Management, Inc., (iv) Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) (Hilton), dated as of February 27, 2015, among ARC Hospitality Portfolio II HIL TRS, LP to Secured Parties and consented and agreed to by ARC Hospitality Portfolio II Owner, LLC American Realty Capital Hospitality Properties, LLC and Hampton Inns Management LLC, (v) Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) (Hilton), dated as of February 27, 2015, among ARC Hospitality Portfolio II HIL TRS, LP to Secured Parties and consented and agreed to by ARC Hospitality Portfolio II Owner, LLC American Realty Capital Hospitality Properties, LLC and Homewood Suites Management LLC, (vi) Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) (Courtyard Houston), dated as of February 27, 2015, among ARC Hospitality Portfolio II NTC HIL TRS, LP to Secured Parties and consented and agreed to by ARC Hospitality Portfolio II NTC Owner, LP, American Realty Capital Hospitality Properties, LLC and Crestline Hotels & Resorts, LLC, and (vii) Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) (Stratford), dated as of February 27, 2015, among ARC Hospitality TRS Stratford, LLC to Secured Parties and consented and agreed to by ARC Hospitality Stratford, LLC, American Realty Capital Hospitality Properties, LLC and Crestline Hotels & Resorts, LLC, as each of the foregoing may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Award” shall mean any compensation paid by any Governmental Authority in connection with a Condemnation in respect of all or any part of the Property.

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“Bankruptcy Action” shall mean with respect to any Person (i) such Person filing a voluntary petition under the Bankruptcy Code or any other federal, state, local or foreign bankruptcy or insolvency law; (ii) the filing of an involuntary petition against such Person under the Bankruptcy Code or any other federal, state, local or foreign bankruptcy or insolvency law, or soliciting or causing to be solicited petitioning creditors for any involuntary petition against such Person; (iii) such Person filing an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other federal, state, local or foreign bankruptcy or insolvency law, or soliciting or causing to be solicited petitioning creditors for any involuntary petition from any Person; (iv) such Person consenting to or acquiescing in or joining in an application for the appointment of a custodian, receiver, trustee, or examiner for such Person or any portion of the Property; or (v) such Person making an assignment for the benefit of creditors, or admitting, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due.

“Bankruptcy Code” shall mean Title 11 of the United States Code entitled “Bankruptcy”, as amended from time to time, and any successor statute or statutes and all rules and regulations from time to time promulgated thereunder, and any comparable foreign laws relating to bankruptcy, insolvency or creditors’ rights.

“Base Rate” shall mean the rate per annum equal to the aggregate of the Applicable Spread plus the then applicable Treasury Rate which in no event shall be less than six and one-quarter percent (6.25%) per annum.

“Beverage Concession Agreement” shall mean that certain Courtyard Dallas Medical/Market Center Alcohol Concession Agreement dated as of the date hereof by and between ARC Hospitality Portfolio II NTC TRS, LP, a Delaware limited partnership, and Beverage Concessionaire, together with any replacement thereof in accordance with the terms of this Agreement.

“Beverage Concessionaire” shall mean ARC Hospitality Portfolio II TX Beverage Company, LLC, a Delaware limited liability company, together with any replacement thereof in accordance with the terms of this Agreement.

“Beverage Management Agreement” shall mean that certain Courtyard Dallas Medical/Market Center Alcohol Management and Services Agreement dated as of the date hereof by and between Beverage Concessionaire and Beverage Manager, together with any replacement thereof in accordance with the terms of this Agreement.

“Beverage Manager” shall mean Crestline Hotels and Resorts LLC, a Delaware limited liability company, together with any replacement thereof in accordance with the terms of this Agreement.

“Borrower” shall have the meaning set forth in the Recitals to this Agreement. Each reference herein to “Borrower” shall be deemed to include all Borrowers, individually or collectively as the context may require.

“Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday on which national banks are not open for general business in (i) the State of New York, (ii) the state

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where the corporate trust office of the Trustee is located, or (iii) the state where the servicing offices of Servicer are located.

“Capital Adequacy Events” shall have the meaning set forth in Section 2.4.4(d).

“Capital Expenditure Account” shall have the meaning set forth in Section 6.5.1.

“Capital Expenditure Funds” shall have the meaning set forth in Section 6.5.1.

“Capital Expenditures” shall mean, for any period, the amounts expended for items required to be capitalized under the Uniform System of Accounts and reconciled in accordance with GAAP (including expenditures for replacements, building improvements, major repairs, alterations, tenant improvements and leasing commissions).

“Cash Management Account” shall have the meaning set forth in Section 6.1.

“Cash Management Agreement” shall mean that certain Cash Management Agreement, dated as of the date hereof, among Borrower, Lender and the Cash Management Bank, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Cash Management Bank” shall mean Wells Fargo Bank, N.A. and any successor Eligible Institution thereto under the Cash Management Agreement in effect from time to time.

“Cash Sweep DSCR Trigger Event” shall mean that, as of any date of determination by Lender, the Debt Service Coverage Ratio is less than 1.225 to 1.00.

“Cash Sweep Event” shall mean the occurrence of:

(i) an Event of Default;

(ii) any event of default under the Intermediate Management Agreement or the Property Management Agreement;

(iii) a Cash Sweep DSCR Trigger Event;

(iv) the delivery of notice by Franchisor of any breach or default by Borrower under any Franchise Agreement that, with the passage of time and/or delivery of notice, permits Franchisor to terminate or cancel the Franchise Agreement (provided, however, this shall not include any notice by Franchisor solely by reason of the existence of a required PIP then being performed by a Borrower at a Property so long as such PIP Work is being performed in accordance with the terms of the applicable Franchise Agreement); or

(v) any failure on the part of Borrowers to deposit or cause to be deposited the amounts required pursuant to Section 6.6.1(a) of this Agreement and otherwise in accordance with the PIP Reserve Funding Schedule.

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“Cash Sweep Event Cure” shall mean:

(i) if the Cash Sweep Event is caused solely by the occurrence of clause (i) in the definition of “Cash Sweep Event,” the date on which a cure of the Event of Default which gave rise to such Cash Sweep Event is accepted by Lender in its sole and absolute discretion; provided that no such cure shall be deemed to have been accepted by Lender unless and until such Event of Default is waived in writing by Lender in its sole and absolute discretion in accordance with the terms and provisions of the Loan Documents;

(ii) if the Cash Sweep Event is caused solely by the occurrence of clause (ii) in the definition of “Cash Sweep Event,” (a) the date on which the event of default under the Intermediate Management Agreement or Property Management Agreement, as applicable, has been cured to Lender’s satisfaction, or (b) the date on which Borrower has entered into a Replacement Management Agreement with a Qualified Manager in accordance with the terms of this Agreement;

(iii) if the Cash Sweep Event is caused solely by the occurrence of clause (iii) in the definition of “Cash Sweep Event,” the date on which the Debt Service Coverage Ratio is at least 1.325:1.00 for two (2) consecutive calendar quarters;

(iv) if the Cash Sweep Event is caused solely by the occurrence of clause (iv) in the definition of “Cash Sweep Event,” the date on which Borrower has delivered evidence reasonably satisfactory to Lender, which may include a “good standing” or similar letter from Franchisor, indicating that the Franchise Agreement is in full force and effect with no default thereunder; or

(v) if the Cash Sweep Event is caused solely by the occurrence of clause (v) in the definition of “Cash Sweep Event,” the date on which the aggregate deposits actually made to the PIP Reserve Account equal the amount required to have been deposited prior to such date as reflected on the PIP Reserve Funding Schedule.

provided, that each Cash Sweep Event Cure set forth above shall be subject to the following conditions: (1) after giving effect to such Cash Sweep Event Cure, no Cash Sweep Event shall have occurred and remain outstanding, (2) Borrower shall have notified Lender in writing of its election to cure the applicable Cash Sweep Event, (3) a Cash Sweep Event Cure may occur no more than three (3) times during the Term, and (4) Borrower shall have paid all of Lender’s reasonable out-of-pocket costs and expenses incurred in connection with such Cash Sweep Event Cure (including reasonable attorneys’ fees and expenses).

“Cash Sweep Event Period” shall mean any period commencing on the occurrence of a Cash Sweep Event and continuing until the earlier of (i) the Monthly Payment Date following

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the occurrence of the applicable Cash Sweep Event Cure or (ii) the payment in full of all principal and interest on the Loan and all other amounts payable under the Loan Documents, including the Additional Interest and the Minimum Interest Required Payment, as applicable, in accordance with the terms and provisions of the Loan Documents.

“Casualty” shall mean the occurrence of any casualty, damage or injury, by fire or otherwise, to the Property or any part thereof.

“Casualty and Condemnation Account” shall have the meaning set forth in the Cash Management Agreement.

“Casualty Consultant” shall have the meaning set forth in Section 5.3.2(c).

“Casualty Retainage” shall have the meaning set forth in Section 5.3.2(d).

“Cause” shall mean, with respect to an Independent Manager, (i) acts or omissions by such Independent Manager that constitute willful disregard of, or gross negligence with respect to, such Independent Manager’s duties, (ii) such Independent Manager has engaged in or has been charged with or has been indicted or convicted for any crime or crimes of fraud or other acts constituting a crime under any law applicable to such Independent Manager, (iii) such Independent Manager has breached its fiduciary duties of loyalty and care as and to the extent of such duties in accordance with the terms of the related limited liability company’s organizational documents, (iv) there is a material increase in the fees charged by such Independent Manager or a material change to such Independent Manager’s terms of service, (v) such Independent Manager is unable to perform his or her duties as Independent Manager due to death, disability or incapacity, or (vi) such Independent Manager no longer meets the definition of Independent Manager.

“Clearing Account Agreement” shall mean, collectively, that certain (i) Deposit Account Control Agreement (Crestline), dated as of February 27, 2015, between ARC Hospitality Portfolio II TRS Holdco, LLC, ARC Hospitality Portfolio II Owner, LLC, ARC Hospitality Portfolio Owner II NTC Owner, LP, ARC Hospitality Portfolio II TRS, LLC, ARC Hospitality Portfolio II NTC TRS, LP, Secured Parties and Wells Fargo Bank, N.A., (ii) Deposit Account Control Agreement (Pillar), dated as of February 27, 2015, between ARC Hospitality Portfolio II TRS Holdco, LLC, ARC Hospitality Portfolio II Owner, LLC, ARC Hospitality Portfolio II TRS, LLC, ARC Hospitality Portfolio II MISC TRS, LLC, Secured Parties and Wells Fargo Bank, N.A., (iii) Deposit Account Control Agreement (McKibbon) between ARC Hospitality Portfolio II TRS Holdco, LLC, ARC Hospitality Portfolio II Owner, LLC, ARC Hospitality Portfolio II NTC Owner, LP, ARC Hospitality Portfolio II MISC TRS, LLC, ARC Hospitality Portfolio NTC TRS, LP, Secured Parties and Wells Fargo Bank, N.A., (iv) Deposit Account Control Agreement (Hilton) between ARC Hospitality Portfolio II TRS Holdco, LLC, ARC Hospitality Portfolio II Owner, LLC, ARC Hospitality Portfolio II NTC Owner, LP, ARC Hospitality Portfolio II HIL TRS, LLC, ARC Hospitality Portfolio II NTC HIL TRS, LP, Borrowers, Secured Parties and Wells Fargo Bank, N.A.; and (v) Deposit Account Control Agreement (Stratford) between ARC Hospitality TRS Holding Stratford, LLC, ARC Hospitality Stratford, LLC, ARC Hospitality TRS Stratford, LLC, Secured Parties and Wells Fargo Bank, N.A., as each of the same may be amended, restated, replaced, supplemented or otherwise

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modified from time to time or, if the context requires, a replacement clearing account agreement executed in accordance with the terms and provisions of the Loan Agreement.

“Clearing Account” shall mean, individually or collectively, as the context requires, each DACA Account and Sub-DACA account as set forth in the Clearing Account Agreement.

“Clearing Bank” shall have the meaning set forth in Section 6.1.

“Closed Property Release Conditions” shall have the meaning set forth on Schedule VIII, attached hereto and made a part hereof.

“Closing Date” shall mean the date of the funding of the Loan.

“Code” shall mean 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.

“Collective Bargaining Agreement” shall mean that certain Agreement, effective on September 11, 2011, by and between Hampton Inns Management Company d/b/a Hampton Inn  – Milford and Local 371, United Food and Commercial Workers International Union, AFL-CIO, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time in accordance with the terms and provisions of this Agreement.

“Common Equity Change in Control Notice” shall have the meaning provided in Section 8.2(e).

“Common Equity Member” shall mean American Realty Capital Hospitality Portfolio Member, L.P., a Delaware limited partnership.

“Condemnation” shall mean a temporary or permanent taking by any Governmental Authority as the result or in lieu or in anticipation of the exercise of the right of condemnation or eminent domain, of all or any part of the Property, or any interest therein or right accruing thereto, including any right of access thereto or any change of grade affecting the Property or any part thereof.

“Control” as to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or activities of such Person, whether through ownership of voting securities or other beneficial interests, by contract or otherwise, and the terms “controlled” or “controlling” shall have a correlative meaning; provided, however, for purposes of the definition of “Institutional Lender” below, “Control” as to any Person, shall mean (i) the ownership, directly or indirectly, in the aggregate of more than fifty percent (50%) of the beneficial ownership interests of such Person and (ii) the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or activities of such Person, whether through ownership of voting securities or other beneficial interests, by contract or otherwise, and the terms “controlled” or “controlling” shall have a correlative meaning.

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“Controlling Person” as to any Person, shall mean any other Person that Controls such Person.

“Courtyard Houston Property” shall mean the Property located at 12401 Katy Freeway, Houston, Texas.

“CPI” shall mean the Consumer Price Index, as published by the United States Department of Labor, Bureau of Labor Statistics for the region in which the Property is located or any substitute index hereafter adopted by the United States Department of Labor.

“Credit Card Banks” shall have the meaning set forth in Section 6.1.

“Credit Card Bank Payment Direction Letter” shall have the meaning set forth in Section 6.1.

“Credit Card Companies” shall have the meaning set forth in Section 6.1.

“Credit Card Company Payment Direction Letter” shall have the meaning set forth in Section 6.1.

“Debt” shall mean the Outstanding Principal Balance together with all interest accrued and unpaid thereon and all other sums (including the Additional Interest and the Minimum Interest Required Payment, if applicable) due to Lender in respect of the Loan under the Loan Documents.

“Debt Service” shall mean, with respect to any particular period of time, the aggregate amount of scheduled interest payments due and payable under the Note and this Agreement.

“Debt Service Coverage Ratio” shall mean a ratio, as determined by Lender, in which, as of any date of determination by Lender:

(i) the numerator is the Underwritten Net Cash Flow, and

(ii) the denominator is the Debt Service due and payable during the succeeding twelve (12) month period (for purposes of this calculation, “Debt Service” shall mean a monthly constant payment of principal and interest computed by Lender using the LIBOR Interest Rate or Base Rate, as applicable, in effect on the date of determination, and sufficient to fully amortize the Outstanding Principal Balance over a thirty (30) year period from the date of determination).

“Default” shall mean the occurrence of any event hereunder or under any other Loan Document which, but for the giving of notice or passage of time, or both, would constitute an Event of Default.

“Default Rate” shall mean, with respect to the Loan, a rate per annum equal to the lesser of (i) the Maximum Legal Rate, or (ii) five percent (5%) above the LIBOR Interest Rate, or (iii)

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at any time when the Loan shall bear interest at the Base Rate in accordance with Section 2.4.4(b), five percent (5%) in excess of the Base Rate.

“Disclosure Document” shall mean, collectively, any written materials used or provided to any prospective investors and/or NRSROs in connection with any public offering or private placement in connection with a Securitization, including, but not limited to, any preliminary or final offering circular, prospectus, prospectus supplement, free writing prospectus, private placement memorandum or other offering documents, marketing materials or information.

“Easements” shall have the meaning set forth in Section 3.1.12.

“Eligible Account” shall have the meaning set forth in the Cash Management Agreement.

“Eligible Institution” shall have the meaning set forth in the Cash Management Agreement.

“Embargoed Person” shall have the meaning set forth in Section 4.2.15.

“Environmental Indemnity” shall mean that certain Environmental Indemnity Agreement, dated as of the date hereof, executed by Borrower and Guarantor in connection with the Loan for the benefit of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Equipment” shall, with respect to each Property, have the meaning set forth in the Security Instrument executed by the Borrowers owning an interest in such Property.

“Equipment Leases” shall mean equipment leases or financing or other similar instruments entered into with respect to the Equipment and/or the Personal Property with respect to each Property provided.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and the ruling issued thereunder.

“ERISA Affiliate” shall mean each person (as defined in Section 3(9) of ERISA) that together with Borrower would be deemed to be a “single employer” within the meaning of Section 414(b), (c), (m) or (o) of the Code.

“Eurodollar Business Day” shall mean any Business Day on which commercial banks are open for international business (including dealings in dollar deposits (in London, England).

“Event of Default” shall have the meaning set forth in Section 10.1.

“Excess Cash Flow” shall have the meaning set forth in Section 6.11.1.

“Excess Cash Flow Account” shall have the meaning set forth in Section 6.9.

“Excess Cash Flow Funds” shall have the meaning set forth in Section 6.9.

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“Exchange Act” shall have the meaning set forth in Section 9.2(a).

“Exchange Act Filing” shall mean a filing pursuant to the Exchange Act in connection with or relating to a Securitization.

“Exercise Notice” shall have the meaning provided in Section 11.26.3.

“Extended Maturity Date” shall have the meaning set forth in Section 2.7.1.

“Extension Option” shall have the meaning set forth in Section 2.7.1.

“Extension Period” shall have the meaning set forth in Section 2.7.1.

“Extraordinary Expense” shall have the meaning set forth in Section 4.1.7(e).

“FF&E” shall mean furniture, fixtures and equipment at or in or used in connection with the use, occupancy, operation and maintenance of all or any part of the hotel located on the Property and of the type customarily utilized in hotel properties such as the Property.

“FF&E Account” shall have the meaning set forth in Section 6.5.1.

“FF&E Funds” shall have the meaning set forth in Section 6.5.1.

“FF&E Work” shall mean the replacement of FF&E.

“Final Member” shall have the meaning set forth in clauses (cc)(ix) or (ee)(ix) of Schedule III attached hereto, as the context requires.

“Financial Covenants” shall mean the covenants contained in Section 5.2 of the Guaranty.

“Financing Notice” shall have the meaning provided in Section 11.26.2.

“Fiscal Year” shall mean each twelve (12) month period commencing on January 1 and ending on December 31 during each year of the Term.

“Fitch” shall mean Fitch IBCA, Inc.

“Franchise Agreement” shall mean individually or collectively, as the context requires, the franchise agreements listed on Schedule X attached hereto, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time in accordance with the terms and provisions of this Agreement, or, if the context requires, the Replacement Franchise Agreement executed in accordance with the terms and provisions of this Agreement.

“Franchise Agreement Cash Sweep Event” shall have the meaning provided in Section 6.9.

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“Franchise Cash Sweep Event Cap” shall mean, with respect to a Franchise Agreement Cash Sweep Event pertaining to a particular Property, the Allocated Loan Amount with respect to such Property.

“Franchisor” shall mean individually or collectively, as the context requires, (a) any entity that is a hotel franchisor or licensor pursuant to any Franchise Agreement as of the date hereof, or (b) any other franchisor approved by Lender and the Rating Agencies in accordance with the terms and conditions of the Loan Documents, including, without limitation, Article 7 of this Agreement.

“Funding Losses” shall have the meaning set forth in Section 2.4.4(a).

“Funding Party” means any bank or other entity, if any, which is indirectly or directly funding any Lender with respect to the Loan, in whole or in part, including, without limitation, any direct or indirect assignee of, or participant in, the Loan.

“GAAP” shall mean generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the accounting profession), or in such other statements by such entity as may be in general use by significant segments of the U.S. accounting profession.

“Government Lists” shall have the meaning set forth in Section 4.2.16(b).

“Governmental Authority” shall mean any court, board, agency, commission, office or authority of any nature whatsoever or any governmental unit (federal, state, commonwealth, county, district, municipal, city, foreign or otherwise) whether now or hereafter in existence.

“Governmental Matter” shall mean (i) any governmental or regulatory investigation actually known to Lender to be active, ongoing and pending (other than ordinary course examinations conducted by any governmental or regulatory authority) with respect to Borrower, Guarantor, Affiliated Manager, any of their respective external corporate advisors (including AR Capital, LLC) or any of their respective Affiliates that Lender determines in its reasonable business judgment exercised in good faith could reasonably be likely to result in material liability, material sanctions, or criminal charges the conviction of which would be a felony, or (ii) any material liability, material sanctions, criminal charges the conviction of which would be a felony, or felony convictions resulting from any governmental or regulatory investigation.

“Grace Acquisition I” shall have the meaning set forth in Section 8.2(i).

“Gross Revenue” shall mean all revenue, including, without limitation, Rents, derived from the ownership and operation of the Property from whatever source.

“Guarantor” shall mean American Realty Capital Hospitality Trust, Inc. or any replacement guarantor pursuant to Section 8.2 hereof.

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“Guaranty” shall mean that certain Guaranty of Recourse Obligations, dated as of the date hereof, from Guarantor for the benefit of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Hedge Losses” shall mean all actual losses incurred by Lender or its affiliates in connection with the hedge positions taken by Lender or its affiliates with respect to the LIBOR Interest Rate. Borrower acknowledges that such hedging transactions may include the sale of U.S. Obligations or other securities and/or the execution of certain derivative transactions, which hedging transactions would have to be “unwound” if all or any portion of the Loan is paid down.

“Hilton Brand Managed Properties” shall mean collectively, each Property managed by Hampton Inns Management LLC, Homewood Suites Management LLC or any Affiliate of Hilton Worldwide.

“Hilton Brand Operating Expense Account” shall have the meaning set forth in Section 6.8.1.

“Hilton Brand Operating Expense Funds” shall have the meaning set forth in Section 6.8.1.

“Improvements” shall have the meaning set forth in the granting clause of the Security Instruments.

“Indebtedness” shall mean, for any Person, without duplication: (i) 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 (including, without limitation, so-called property-assessed clean energy or similar loans), (ii) 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 thereunder, (iii) all amounts required to be paid by such Person as a guaranteed payment to partners or a preferred or special dividend, including any mandatory redemption of shares or interests, (iv) all indebtedness guaranteed by such Person, directly or indirectly, (v) all obligations under leases that constitute capital leases for which such Person is liable, and (vi) 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.

“Indemnified Liabilities” shall have the meaning set forth in Section 11.13(b).

“Indemnified Persons” shall have the meaning set forth in Section 9.2(b).

“Indemnity Agreement” means an Indemnity Agreement dated as of the date hereof by a Borrower which is the owner of a Property, American Realty Capital Hospitality Operating Partnership, L.P., American Realty Capital Hospitality Trust, Inc., American Realty Capital Hospitality Portfolio Member GP, LLC, American Realty Capital Hospitality Portfolio Member, L.P., ARC Hospitality Portfolio II Holdco, LLC, ARC Hospitality Portfolio II Mezz GP, LLC, and ARC Hospitality Portfolio II Mezz, LP, for the benefit of the Borrower which is the lessee of

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such Property under an Operating Agreement and ARC Hospitality Portfolio II TRS Holdco, LLC, and American Realty Capital Hospitality Grace Portfolio, LLC.

“Independent Director” shall have the meaning set forth in clause (bb) of Schedule III attached hereto.

“Insolvency Opinion” shall mean, as the context may require, (i) that certain bankruptcy non-consolidation opinion letter dated the date hereof delivered by Duane Morris in connection with the Loan or (ii) any other bankruptcy non-consolidation opinion letter delivered to Lender in connection with the Loan, including any bankruptcy non-consolidation opinion letter delivered to Lender after the closing of the Loan pursuant to the terms and conditions of the Loan Documents, which post-closing opinion shall be from counsel, and in form and substance, in each case reasonably acceptable to Lender and acceptable to the Rating Agencies in their sole discretion.

“Insurance Account” shall have the meaning set forth in Section 6.4.1.

“Insurance Funds” shall have the meaning set forth in Section 6.4.1.

“Insurance Premiums” shall have the meaning set forth in Section 5.1.1(b).

“Insurance Proceeds” shall mean all payments from any insurance company payable as a result of the Policies required by Article 5 or any other insurance policy covering the Property and/or Borrower.

“Intercreditor Agreement” shall have the meaning set forth in Section 12.3.

“Interim Disbursement Date” shall have the meaning set forth in Section 6.11.1(b).

“Interest Period” shall have the meaning set forth in Section 2.3.1.

“Interest Rate Protection Agreement” shall have the meaning provided in Section 2.8.1(a).

“Interest Rate Protection Trigger Date” shall mean the date, if any, that LIBOR first equals or exceeds two percent (2.00%).

“Intermediate Manager” shall mean, if any, individually or collectively, as the context may require, American Realty Capital Hospitality Properties, LLC, American Realty Capital Hospitality Grace Portfolio, LLC or such other Person retained by one or more Borrowers to contract for property management services with a Property Manager, approved by Lender and the Rating Agencies in accordance with the terms and conditions of the Loan Documents, including, without limitation, Article 7 of this Agreement.

“Intermediate Management Agreement” shall mean, if any, individually or collectively, as the context may require, certain property management agreements entered into by one or more Borrowers with an Intermediate Manager to provide management and other services with respect to one or more Properties, as the same may be amended, restated, replaced,

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supplemented or otherwise modified from time to time in accordance with the terms and provisions of this Agreement.

“Ladder’s Proposed Financing” shall have the meaning provided in Section 11.26.3.

“Lease” shall mean any lease, sublease or sub-sublease, letting, license, concession or other agreement (whether written or oral and whether now or hereafter in effect) pursuant to which any Person is granted a possessory interest in, or right to use or occupy all or any portion of any space in the Property, and every modification, amendment or other agreement relating to such lease, sublease, sub-sublease, or other agreement entered into in connection with such lease, sublease, sub-sublease, or other agreement and every guarantee of the performance and observance of the covenants, conditions and agreements to be performed and observed by the other party thereto. The term “Lease” excludes Operating Leases, but includes all subleases under an Operating Lease (whether or not identified as a sublease on the face thereof).

“Lease Termination Payments” shall have the meaning set forth in Section 6.6.1(b)(i).

“Legal Requirements” shall mean all federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees, demands and injunctions of Governmental Authorities affecting the Loan, any Secondary Market Transaction with respect to the Loan, Borrower, Guarantor or the Property or any part thereof or the ownership, construction, alteration, use, management or operation of the Property or any part thereof, whether now or hereafter enacted and in force, including, without limitation, the Securities Act, the Exchange Act, Regulation AB, the Dodd-Frank Wall Street Reform and Consumer Protection Act, zoning and land use laws and the Americans with Disabilities Act of 1990, the rules and regulations promulgated pursuant to any of the foregoing, and all permits, licenses and authorizations relating thereto, and all covenants, agreements, restrictions and encumbrances contained in any instruments, either of record or known to Borrower, at any time in force affecting Borrower, Guarantor or the Property or any part thereof, including, without limitation, any which may (i) require repairs, modifications or alterations in or to the Property or any part thereof or (ii) in any way limit the use and enjoyment thereof.

“Lender” shall have the meaning set forth in the Recitals to this Agreement.

“Lender Indemnified Parties” “ shall mean Lender and any designee of Lender, any Affiliate of Lender that has filed any registration statement relating to a Securitization or has acted as the issuer, sponsor, depositor or seller in connection with such Securitization, any Affiliate of Lender that acts as an underwriter, placement agent or initial purchaser of Securities issued in a Securitization, any other co-underwriters, co-placement agents or co-initial purchasers of Securities issues in a Securitization, each Person who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) any such Person, any Person who is, was or will have been involved in the origination of the Loan, any Person who is, was or will have been involved in the servicing of the Loan, any Person in whose name the Lien created by the Loan Documents are, were or will be recorded or filed, any Person who may hold or acquire, held or will have held a full or partial interest in the Loan (including, but not limited to, investors or prospective investors in the Securities, as well as custodians, trustees and other fiduciaries who hold or have held a full or partial interest in the Loan for the benefit of third

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parties), any Person who holds or acquires, held or will have held a participation or other full or partial interest in the Loan, whether during the Term or as a part of or following a foreclosure thereof, any successors by merger, consolidation or acquisition of all or a substantial portion of Lender’s assets and business, as well as the respective directors, officers, shareholders, partners, members, employees, agents, servants, representatives, contractors, subcontractors, Affiliates, participants, successors and assigns of any and all of the foregoing. For the avoidance of doubt, and without limiting the generality of the foregoing, “Lender Indemnified Parties” shall include the initial named Lender hereunder and each Lender that has held an interest in the Loan at any time during the Term, including prior to the occurrence of the act or omission giving rise to the applicable Indemnified Liabilities.

“Lender Refinancing Term Sheet” shall have the meaning provided in Section  11.26.1(b).

“Lender Transfer Requirements” shall mean, with respect to a proposed transferee of a direct or indirect interest, or Person acquiring Control, in a Restricted Party, a requirement that Borrower deliver, or cause to be delivered, at Borrower’s sole cost and expense, such customary searches (including credit, negative news, OFAC, litigation, judgment, lien and bankruptcy searches) as Lender may reasonably require with respect to such transferee or Person, its owners and/or Controlling Persons, as applicable, the results of which must be reasonably acceptable to Lender (unless such transferee or Person, its owners and/or Controlling Persons, as applicable, were previously the subject of searches by Lender which were reasonably acceptable to Lender, in which case Borrower’s obligation to deliver or cause the delivery of such searches with respect to such Person(s) shall be satisfied to the extent reasonably acceptable updates to such searches are delivered to Lender), and such transferee or Person, its owners and Controlling Persons shall otherwise satisfy Lender’s then current applicable underwriting criteria and requirements.

“Letter of Credit” shall mean an irrevocable, unconditional, transferable (without the payment of a transfer fee), clean, evergreen (or not expiring until at least thirty (30) Business Days after the Stated Maturity Date) sight draft letter of credit acceptable to Lender and the Rating Agencies in favor of Lender and entitling Lender to draw thereon in New York, New York based solely on a statement purportedly executed by an officer of Lender stating that it has the right to draw thereon issued by a domestic Eligible Institution or the U.S. agency or branch of a foreign Eligible Institution and with respect to which Borrower has no reimbursement obligation. The evergreen clause of each Letter of Credit shall provide that the expiration date of such Letter of Credit shall automatically extend (i.e., without requiring a consent, approval, amendment or other modification) for additional periods from the current or each future expiration date unless the issuing bank provides Lender and Servicer with written notice that such Letter of Credit will not be renewed at least sixty (60) days, and not more than ninety (90) days, prior to the date on which the outstanding Letter of Credit is scheduled to expire. Lender shall have the right immediately to draw down any Letter of Credit in full and hold the proceeds of such draw in the same manner as funds deposited in the Reserve Funds (i) if at any time the bank issuing any such Letter of Credit shall cease to be an Eligible Institution, (ii) with respect to an evergreen Letter of Credit, if Lender has received a notice from the issuing bank that the Letter of Credit will not be renewed and a substitute Letter of Credit is not provided at least thirty (30) days prior to the date on which the outstanding Letter of Credit is scheduled to expire,

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(iii) with respect to any Letter of Credit with a stated expiration date, if Lender has not received a notice from the issuing bank that it has renewed the Letter of Credit at least thirty (30) days prior to the date on which such Letter of Credit is scheduled to expire and a substitute Letter of Credit is not provided at least thirty (30) days prior to the date on which the outstanding Letter of Credit is scheduled to expire, (iv) upon receipt of notice from the issuing bank that the Letter of Credit will be terminated (except if the termination of such Letter of Credit is permitted pursuant to the terms and conditions of this Agreement or a substitute Letter of Credit is provided prior to such termination), or (v) during the continuance of an Event of Default. Notwithstanding anything to the contrary contained in the above, Lender is not obligated to draw any Letter of Credit upon the happening of any of the foregoing events and shall not be liable for any losses sustained by Borrower due to the insolvency of the bank issuing the Letter of Credit if Lender has not drawn the Letter of Credit.

“Liabilities” shall have the meaning set forth in Section 9.2(b).

“LIBOR” shall mean, with respect to any Interest Period, the rate per annum (rounded upwards, if necessary, to the nearest one-eighth (1/8th) of one percent (1%)) reported, with respect to the initial Interest Period, at 11:00 a.m. London time on the date of this Agreement (or if such date is not a Eurodollar Business Day, the immediately preceding Eurodollar Business Day), and thereafter, at 11:00 a.m. London time on the date two (2) Eurodollar Business Days prior to the last day of the Interest Period preceding the applicable Interest Period (such date, the “LIBOR Determination Date”), on Reuters Page LIBOR01 as the non-reserve adjusted London Interbank Offered Rate for U.S. dollar deposits having a thirty (30) day term and in an amount of $1,000,000.00 or more (or on such other page as may replace said Page LIBOR01 on that service or such other service or services as may be nominated by the British Bankers Association for the purpose of displaying such rate, all as determined by Lender in its sole but good faith discretion). In the event that (i) more than one such LIBOR is provided, the average of such rates shall apply, or (ii) no such LIBOR is published, then LIBOR shall be determined from such comparable financial reporting company as Lender in its sole but good faith discretion shall determine. LIBOR for any Interest Period shall be adjusted from time to time by increasing the rate thereof to compensate Lender, to the extent rate increases shall be imposed on similarly situated loans held by Lender, for any aggregate reserve requirements (including, without limitation, all basic, supplemental, marginal and other reserve requirements and taking into account any transitional adjustments or other scheduled changes in reserve requirements during any Interest Period) which are required to be maintained by Lender with respect to “Eurocurrency Liabilities” (as presently defined in Regulation D of the Board of Governors of the Federal Reserve System) of the same term under Regulation D, or any other regulations of a Governmental Authority having jurisdiction over Lender or such Funding Party of similar effect.

“LIBOR Determination Date” shall have the meaning set forth in the definition of “LIBOR” above.

“LIBOR Interest Rate” shall have the meaning set forth in Section 2.2.1.

“Lien” shall mean any mortgage, deed of trust, lien (statutory or otherwise), pledge, hypothecation, easement, restrictive covenant, preference, assignment, security interest, or any other encumbrance, charge or transfer of, or any agreement to enter into or create any of the

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foregoing, on or affecting all or any portion of the Property or any interest therein, or any direct or indirect interest in Borrower or any SPC Party, including any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, the filing of any financing statement, any lien associated with a so-called property-assessed clean energy or similar loan and mechanic’s, materialmen’s and other similar liens and encumbrances.

“Liquor Entity Pledge Agreement” shall mean that certain Pledge and Security Agreement made by ARC Hospitality Portfolio TX Holdings, LLC to Lender, acknowledged and agreed to by ARC Hospitality Portfolio II NTC TRS, LP and ARC Hospitality Portfolio II NTC Owner, LP.

“Liquor License Subsidiary” shall mean ARC Hospitality Portfolio II Concessions, LLC, ARC Hospitality Portfolio II TX Management, LLC, ARC Hospitality Portfolio II TX Holdings, LLC and ARC Hospitality Portfolio II TX Beverage Company, LLC.

“LLC Borrower” shall mean, individually and collectively as the context requires, ARC Hospitality Portfolio II Owner, LLC, ARC Hospitality Portfolio II TRS, LLC, ARC Hospitality Portfolio II MISC TRS, LLC and ARC Hospitality Portfolio II HIL TRS, LLC, ARC Hospitality Stratford, LLC and ARC Hospitality TRS Stratford, LLC.

“Loan” shall mean the loan in the original principal amount of Two Hundred Twenty Seven Million and 00/100 Dollars ($227,000,000.00) made by Lender to Borrower pursuant to this Agreement.

“Loan Documents” shall mean, collectively, the Loan Agreement, the Note, the Security Instruments, the Assignment of Leases, the Cash Management Agreement, the Clearing Account Agreement, the Environmental Indemnity, the Assignment of Intermediate Management Agreement, the Assignment of Franchise Agreement, the Assignment of Property Management Agreement, the Assignment of Beverage Concession Agreement, the Assignment of Beverage Management Agreement, the Assignment of Interest Rate Protection Agreement, if any, the Guaranty and any other documents, agreements, certificates, affidavits and instruments now or hereafter evidencing, securing or delivered to Secured Parties in connection with the Loan, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Loan Taxes” shall have the meaning provided in Section 2.6(a).

“Loan to Value Ratio” shall mean a ratio, as determined by Lender, in which, as of any date of determination by Lender: (i) the numerator is equal to the Outstanding Principal Balance and (ii) the denominator is equal to the appraised value of the Property based on an Appraisal.

“LP Borrower” shall mean individually and collectively as the context requires, ARC Hospitality Portfolio II NTC Owner, LP, ARC Hospitality Portfolio II TRS, LP and ARC Hospitality Portfolio II NTC HIL TRS, LP.

“Major Contract” shall mean (i) any management or franchise (other than the Intermediate Management Agreement, the Property Management Agreement and the Franchise

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Agreement), interim beverage, brokerage or leasing agreement, (ii) any cleaning, maintenance, service or other contract or agreement of any kind (other than Leases) of a material nature (materiality for these purposes to include contracts in excess of $50,000.00 or which extend beyond one year (unless cancelable on thirty (30) days or less notice)), or (iii) the Collective Bargaining Agreement, in either case relating to the ownership, leasing, management, use, operation, maintenance, repair or restoration of the Property, whether written or oral.

“Material Action” shall mean, with respect to any Person, to institute proceedings to have such Person be adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against such Person or file a petition seeking, or consent to, reorganization or relief with respect to such Person under any applicable federal, state, local or foreign law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of such Person or a substantial part of its property, or make any assignment for the benefit of creditors of such Person, or admit in writing such Person’s inability to pay its debts generally as they become due, or declare or effectuate a moratorium on the payment of any obligation, or take action in furtherance of any such action.

“Material Adverse Effect” shall mean any material adverse effect upon (i) the business operations, economic performance, assets, condition (financial or otherwise), equity, contingent liabilities, prospects, material agreements or results of operations of Borrower, any SPC Party, Guarantor or the Property, (ii) the ability of Borrower or Guarantor to perform their respective obligations under any of the Loan Documents, (iii) the enforceability or validity of any of the Loan Documents, the perfection or priority of any Lien created under any of the Loan Documents or the rights, interests or remedies of Lender under any of the Loan Documents, or (iv) the value, use operation of, or cash flows from, the Property.

“Material Alteration” shall have the meaning set forth in Section 4.1.11.

“Material Equipment Leases” shall mean, collectively, Equipment Leases of a material nature (materiality for these purposes to include contracts in excess of $50,000.00 or which extend beyond one year (unless cancelable on thirty (30) days or less notice)), whether written or oral.

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

“Maximum Legal Rate” shall mean the maximum nonusurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the indebtedness evidenced by the Note and as provided for herein or the other Loan Documents, under the laws of such Governmental Authority whose laws are held by any court of competent jurisdiction to govern the interest rate provisions of the Loan.

“Minimum Disbursement Amount” shall mean Twenty-Five Thousand and No/100 Dollars ($25,000.00).

“Minimum Interest Required Payment” shall mean, as of the date of any prepayment or repayment of the Loan in whole or in part or the acceleration thereof in accordance with the

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terms of the Loan Documents, an amount equal to the positive difference between (i) the Applicable Minimum Interest Amount and (ii)(a) in connection with any prepayment or repayment of the Loan in whole or in part or acceleration thereof prior to the Extension Period, the aggregate amount of all accrued interest on the Loan, or the portion thereof being prepaid, as applicable, that has been paid by Borrower during the Term of the Loan (but excluding any interest paid at the Default Rate), inclusive of any Minimum Interest Required Payments previously made by Borrower during the Term of the Loan, and (b) in connection with any prepayment or repayment of the Loan in whole or in part or acceleration thereof during the Extension Period, the aggregate amount of all accrued interest on the Loan, or the portion thereof being prepaid, as applicable, that has been paid by Borrower during the Extension Period (but excluding any interest paid at the Default Rate), inclusive of any Minimum Interest Required Payments previously made by Borrower during the Extension Period; provided, however, that in no event shall the Minimum Interest Required Payment be less than zero (0). The calculation of the Minimum Interest Required Payment shall be made by Lender and shall be final and binding absent manifest error.

“Monthly Debt Service Payment” shall have the meaning set forth in Section 2.3.1.

“Monthly Operating Expense Budgeted Amount” for any calendar month shall mean the monthly amount set forth in the Approved Annual Budget for Operating Expenses in respect of the applicable Property or Properties for such calendar month.

“Monthly Payment Date” shall mean the sixth (6th) day of every calendar month occurring during the Term commencing with April 6, 2015.

“Moody’s” shall mean Moody’s Investors Service, Inc.

“Net Cash Flow” shall mean, for the period in question, the amount obtained by subtracting Operating Expenses and Capital Expenditures for such period from Gross Revenue for such corresponding period.

“Net Operating Income” shall mean, for the period in question, the amount obtained by subtracting Operating Expenses for such period from Gross Revenue for such corresponding period.

“Net Proceeds” shall mean: (i) the net amount of all Insurance Proceeds payable as a result of a Casualty to the Property, after deduction of reasonable costs and expenses (including reasonable attorneys’ fees and costs), if any, in collecting such Insurance Proceeds or (ii) the net amount of the Award payable as a result of any Condemnation of the Property, after deduction of reasonable costs and expenses (including reasonable attorneys’ fees and costs), if any, in collecting such Award.

“Net Proceeds Deficiency” shall have the meaning set forth in Section 5.3.2(f).

“New Mezzanine Loan” shall have the meaning set forth in Section 9.3.

“New Note” shall have the meaning set forth in Section 9.1(k).

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“Non Hilton Brand Operating Expense Account” shall have the meaning set forth in Section 6.8.2.

“Non Hilton Brand Operating Expense Funds” shall have the meaning set forth in Section 6.8.2.

“Note” shall have the meaning set forth in Section 2.1.2.

“Notice” shall have the meaning set forth in Section 11.6.

“NRSRO” shall mean any credit rating agency that has elected to be treated as a nationally-recognized statistical rating agency for purposes of the Exchange Act irrespective of whether or not such credit rating agency has been engaged by Lender or another Indemnified Person to rate any of the Securities issued in connection with a Securitization of the Loan or any portion thereof.

“O&M Program” shall have the meaning set forth in Section 4.1.18.

“Obligations” shall mean, collectively, Borrower’s obligations for the payment of the Debt and the performance of the Other Obligations.

“OFAC” shall have the meaning set forth in Section 4.2.15(b).

“Officer’s Certificate” shall mean a certificate delivered to Lender by Borrower which is signed by an authorized senior officer of an SPC Party.

“Operating Expense Account” shall have the meaning set forth in Section 6.8.2.

“Operating Expense Funds” shall have the meaning set forth in Section 6.8.2.

“Operating Expenses” shall mean all costs and expenses of operating, maintaining, directing, managing and supervising the Property (excluding (i) depreciation and amortization, (ii) any Debt Service, (iii) any Capital Expenditures, (iv) deposits required to be made to the Reserve Funds, or (v) the costs of any other things specified to be done or provided at Property Manager’s or Intermediate Manager’s sole cost and expense), incurred by Borrower, Property Manager or Intermediate Manager pursuant to any Property Management Agreement or any Intermediate Property Management Agreement, or as otherwise specifically provided therein, which are properly attributable to such period under Borrower’s system of accounting, including, without limitation: (a) the cost of all food and beverages sold or consumed and of all necessary chinaware, glassware, linens, flatware, uniforms, utensils and other items of a similar nature, including such items bearing the name or identifying characteristics of the hotel as Borrower, Property Manager and/or Intermediate Manager shall reasonably consider appropriate (collectively, the “Operating Equipment”) and paper supplies, cleaning materials and similar consumable items (collectively, the “Operating Supplies”) placed in use (other than reserve stocks thereof in storerooms), provided Operating Equipment and Operating Supplies shall be considered to have been placed in use when they are transferred from the storerooms of the Property to the appropriate operating departments; (b) salaries and wages of personnel of the Property, including costs of payroll taxes and employee benefits (which benefits may include,

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without limitation, a pension plan, medical insurance, life insurance, travel accident insurance and an executive bonus program) and the costs of moving employees of the Property and their families and their belongings to the area in which the Property is located at the commencement of their employment at the Property and all other expenses not otherwise specifically referred to in this definition which are referred to as “Administrative and General Expenses” in the Uniform System of Accounts; (c) the cost of all other goods and services obtained by Borrower, Property Manager or Intermediate Manager in connection with its operation of the Property, including, without limitation, heat and utilities, office supplies and all services performed by third parties, including leasing expenses in connection with telephone and data processing equipment, and all existing and any future installations necessary for the operation of the Improvements for hotel purposes (including, without limitation, heating, lighting, sanitary equipment, air conditioning, laundry, refrigerating, built-in kitchen equipment, telephone equipment, communications systems, computer equipment and elevators), Operating Equipment and existing and any future furniture, furnishings, wall coverings, fixtures and hotel equipment necessary for the operation of the Property for hotel purposes which shall include all equipment required for the operation of kitchens, bars, laundries (if any), and dry cleaning facilities (if any), office equipment, cleaning and engineering equipment and vehicles; (d) the cost of repairs to and maintenance of the Property other than of a capital nature; (e) Insurance Premiums and losses incurred on any self-insured risks of the foregoing types, provided that (1) Lender has specifically approved in advance such self-insurance or (2) insurance is unavailable to cover such risks. Insurance Premiums will be prorated over the period of insurance and Insurance Premiums under blanket Policies will be allocated among properties covered; (f) all Taxes and Other Charges (other than federal, state or local income taxes and franchise taxes or the equivalent) payable by or assessed against Borrower, Property Manager or Intermediate Manager with respect to the operation of the Property; (g) legal fees and fees of any firm of independent certified public accounts designated from time to time by Borrower (the “Independent CPA”) for services directly related to the operation of the Property; (h) the costs and expenses of technical consultants and specialized operational experts for specialized services in connection with non-recurring work on operational, legal, functional, decorating, design or construction problems and activities, including the reasonable fees of Guarantor, any Affiliate of Guarantor or any subsidiary or division of Guarantor or any Affiliate of Guarantor in connection therewith, provided that such employment of Guarantor, any Affiliate of Guarantor or of any such subsidiary or division of Guarantor or any Affiliate of Guarantor is approved in advance by Lender; provided, however, that if such costs and expenses have not been included in an Approved Annual Budget, then, if such costs exceed $5,000 in any one instance, the same shall be subject to approval by Lender; (i) all expenses for advertising the Property and all expenses of sales promotion and public relations activities; (j) all out-of-pocket expenses and disbursements determined by the Independent CPA to have been reasonably, properly and specifically incurred by Borrower, Property Manager, Intermediate Manager, Guarantor or any of their respective Affiliates pursuant to, in the course of and directly related to, the management and operation of the Property under any Property Management Agreement and/or any Intermediate Management Agreement. Without limiting the generality of the foregoing, such charges may include all reasonable travel, telephone, telegram, radiogram, cablegram, air express and other incidental expenses, but excluding costs relating to the offices maintained by Borrower, Property Manager, Intermediate Manager, Guarantor, or any of their respective Affiliates other than the offices maintained at the Property for the management of the Property and excluding transportation

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costs of Borrower, Property Manager or Intermediate Manager related to meetings between Borrower, Property Manager and/or Intermediate Manager with respect to administration of the Property Management Agreement and/or Intermediate Management Agreement, as applicable, or of the Property involving travel away from such party’s principal offices; (k) the cost of any reservations system, any accounting services or other group benefits, programs or services from time to time made available to the Property; (l) the cost associated with any Leases; (m) any management fees, basic and incentive fees or other fees and reimbursables paid or payable to Property Manager and/or Intermediate Manager under the Property Management Agreement and/or Intermediate Management Agreement; and (n) any franchise fees or other fees and reimbursables paid or payable to Franchisor under the Franchise Agreement.

“Operating Lease” shall mean those operating leases identified on Schedule XIII, attached hereto and made a part hereof.

“Origination Fees” shall have the meaning set forth in Section 2.1.4.

“Other Charges” shall mean all ground rents, maintenance charges, impositions other than Taxes, and any other charges, including vault charges and license fees for the use of vaults, chutes and similar areas adjoining the Property, now or hereafter levied or assessed or imposed against the Property or any part thereof.

“Other Obligations” shall mean (i) the performance of all obligations of Borrower contained herein; (ii) the performance of each obligation of Borrower contained in the Note or any other Loan Document; and (iii) the performance of each obligation of Borrower contained in any renewal, extension, amendment, modification, consolidation, change of, or substitution or replacement for, all or any part of this Agreement, the Note or any other Loan Document.

“Outstanding Principal Balance” shall mean, as of any date, the outstanding principal balance of the Loan.

“Patriot Act” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA PATRIOT ACT) of 2001, as the same may be amended from time to time, and corresponding provisions of future laws.

“Patriot Act Offense” shall have the meaning set forth in Section 4.2.15(b).

“Permitted Common Equity Buyout Event” shall mean, following or concurrently with a Permitted Preferred Equity Changeover Event, a purchase by Preferred Equity Investors (or Affiliates of Preferred Equity Investors), in a single consensual transaction, of one hundred percent (100%) of the interest in Pool II Holdco held by the Common Equity Member, including a purchase effected pursuant to the buy/sell terms in Section 3.4 of the Pool II Holdco Operating Agreement, provided that such transaction includes a full and final termination of all right, title, and interest of ARCHOP and its Affiliates in any direct or indirect interest in Borrower (other than any direct or indirect interest held by any such Person in Whitehall).

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“Permitted Preferred Equity Changeover Event” shall mean a change in Control of Pool II Holdco pursuant to a “Changeover Event”, as described in Section 3.3 of the Pool II Holdco Operating Agreement, that satisfies all of the conditions of Section 8.2(c) hereof.

“Permitted Encumbrances” shall mean, collectively, (i) the Liens and security interests created by the Loan Documents, (ii) all encumbrances and other matters disclosed in the Title Insurance Policy and otherwise acceptable to Lender in its sole discretion, (iii) Liens, if any, for Taxes imposed by any Governmental Authority not yet due or delinquent (other than Liens associated with any so-called property-assessed clean energy or similar loans), (iv) any workers’, mechanics’ or similar Liens on the Property provided any such Lien is discharged or bonded in accordance with Section 3.6 of each Security Instrument, and (v) such other title and survey exceptions as Lender has approved or may approve in writing in Lender’s sole discretion.

“Permitted Indebtedness” shall have the meaning set forth in clause (d) of Schedule III attached hereto

“Permitted Investments” shall have the meaning set forth in the Cash Management Agreement.

“Permitted Transferee” shall mean a corporation, partnership (including a limited or limited liability limited partnership), limited liability company or other type of entity acceptable to Lender that satisfies the following conditions: (i) such transferee and Transferee’s Principals shall be acceptable to Lender, which determination shall be based upon, inter alia, (a) such transferee and Transferee’s Principals having an aggregate net worth and liquidity reasonably satisfactory to Lender, (b) Lender’s receipt of searches (including credit, negative news, OFAC, litigation, judgment, lien and bankruptcy searches) reasonably required by Lender on such transferee and Transferee’s Principals, the results of which must be reasonably acceptable to Lender, and (c) such transferee and Transferee’s Principals otherwise satisfying Lender’s then current applicable underwriting criteria and requirements, (ii) such transferee shall qualify as a single purpose, bankruptcy remote entity under criteria established by the Rating Agencies, and (iii) if an Insolvency Opinion has previously been delivered in connection with the Loan, such transferee shall have delivered to Lender a new Insolvency Opinion, and (iv) such transferee, together with Transferee’s Principals, shall be an experienced operator and/or owner of properties similar in location, size, class, use, operation and value as the Property, as evidenced by financial statements and other information reasonably requested by Lender or requested by the Rating Agencies.

“Person” shall mean any individual, corporation, partnership, limited liability company, joint venture, estate, trust, real estate investment trust, unincorporated association, any other entity, any Governmental Authority and any fiduciary acting in such capacity on behalf of any of the foregoing.

“Personal Property” shall, with respect to each Property, have the meaning set forth in the Security Instrument executed by the Borrowers owning an interest in such Property.

“PIP” shall mean any property improvement plan now or subsequently required by any Franchisor under the applicable Franchise Agreement.

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“PIP Alterations” shall mean, with respect to each Property, any repair, maintenance, alterations or improvements at such Property required to be made in accordance with the respective PIP Plan or any new PIP plan imposed by a Franchisor.

“PIP Budget” shall mean, with respect to each Property, the projected budget associated with the PIP Alterations for such Property, each of which is set forth and attached hereto as Exhibit P-2, as approved by Lender in its reasonable discretion, together with such modifications or amendments to such budgets approved by Lender in accordance with Section 4.1.19 hereof and/or any additional detail provided pursuant to Section 4.1.19(b) hereof.

“PIP Completion Date” shall mean the date for completion of PIP Alterations as required under any PIP Plan.

“PIP Plan” shall mean, with respect to each Property, the applicable PIP attached hereto as Exhibit P-1.

“PIP Reserve Account” shall have the meaning set forth in Section 6.6.1.

“PIP Reserve Funds” shall have the meaning set forth in Section 6.6.1.

“PIP Work” shall mean the FF&E Work and other capital improvements required pursuant to any PIP to be installed and/or completed by a Borrower.

“Policies” shall have the meaning set forth in Section 5.1.1(b).

“Pool I Common Equity Investors” shall mean the holders, from time to time, of any membership interest in Pool I Holdco other than a Class A membership interest.

“Pool I Holdco” shall mean ARC Hospitality Portfolio I Holdco, a Delaware limited liability company.

“Pool I Holdco Operating Agreement” shall mean the Amended and Restated Limited Liability Agreement of Pool I Holdco (as it exists on the date hereof and without giving effect to any amendments to the terms thereof made after the date hereof).

“Pool I Preferred Equity Investors” shall mean the holders, from time to time, of any Class A membership interest in Pool I Holdco.

“Pool I Redemption Price” shall have the meaning ascribed to the term “Redemption Price” in the Pool I Holdco Operating Agreement.

“Pool II Common Equity Investors” shall mean the holders, from time to time, of any membership interest in Pool II Holdco other than a Class A membership interest.

“Pool II Holdco” shall mean ARC Hospitality Portfolio II Holdco, LLC, a Delaware limited liability company.

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“Pool II Holdco Operating Agreement” shall mean the Amended and Restated Limited Liability Agreement of Pool II Holdco (as it exists on the date hereof and without giving effect to any amendments to the terms thereof made after the date hereof).

“Portfolio Valuation” shall mean a valuation method based on the assumption that each of the Properties which are the subject of such Appraisal is marketed and sold in a single multi-parcel transaction rather than in separate transactions for separate parcels. Borrowers acknowledge that there is no assurance that such methodology will have any impact on the appraiser’s opinion of value.

“Preferred Equity Change in Control Notice” shall have the meaning provided in Section 8.2(c).

“Preferred Equity Investor” shall mean W2007 Equity Inns Trust, a Maryland Trust, and W2007 Equity Inns Partnership, L.P., a Tennessee limited partnership, individually and collectively as the context may require, together with their respective permitted successors and assigns.

“Preferred Equity Interest” shall mean any issued and outstanding equity interest in Pool II Holdco if the holder thereof has a right, exercisable individually or in conjunction with the holders of any other Preferred Equity Interests, to acquire Control of Pool II Holdco as a result of the occurrence of a “Changeover Event” (as defined in the organizational documents of Pool II Holdco).

“Prohibited Transaction” shall mean any action or transaction which would cause any obligation, or action taken or to be taken, hereunder (or the exercise by Lender of any of its rights under the Note, this Agreement or the other Loan Documents) to be a non-exempt (under a statutory or administrative class exemption) prohibited transaction under the ERISA or Section 4975 of the Code.

“Property” or “Properties” shall mean the parcels of real property, the Improvements thereon and all personal property owned by Borrower and encumbered by the Security Instruments, together with all rights pertaining to such property and Improvements, all as more particularly described in the granting clause of the Security Instruments.

“Property Management Agreement” shall mean, individually or collectively, as the context may require, (i) to the extent any Borrower shall have entered into an Intermediate Management Agreement in respect of any Property, one or more property management agreements entered into by and between the applicable Intermediate Manager and a Property Manager pursuant to which such Property Manager agrees to undertake all of the obligations of such Intermediate Manager under the applicable Intermediate Management Agreement or to perform property management services for the applicable Property, or (ii) one or more property management agreements entered into by and between certain Borrowers and a Property Manager pursuant to which such Property Manager agrees to perform property management services for those Properties owned or leased by such Borrowers, in each case, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time in accordance with the

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terms and provisions of this Agreement, or, if the context requires the Replacement Management Agreement executed in accordance with the terms and provisions of this Agreement.

“Property Manager” shall mean, individually or collectively, as the context may require, (a) each property manager listed on Schedule XI attached hereto, (b) any other property manager engaged in accordance with the terms hereof, or (c) any other property manager approved by Lender and the Rating Agencies in accordance with the terms and conditions of the Loan Documents, including, without limitation, Article 7 of this Agreement.

“Proposed Financing” shall have the meaning provided in Section 11.26.2.

“QCR Redemption Amount” shall have the meaning ascribed to that term in the Pool II Holdco Operating Agreement.

“Qualified Affiliated Manager Equity Holder” shall mean (i) AR Capital, LLC or any of its Affiliates, (ii) Barceló Crestline Corporation or any of its Affiliates, (iii) any Qualified Manager or any of their respective Affiliates, or (iv) a bank, savings and loan association, investment bank, insurance company, trust company, commercial credit corporation, pension plan, pension fund or pension advisory firm, mutual fund, government entity or plan, real estate company, investment fund or an institution substantially similar to any of the foregoing, provided, in each case under this clause (iv) that such Person (x) has total assets (in its name or under its management) in excess of $50,000,000.00 and (except with respect to a pension advisory firm or similar fiduciary) capital/statutory surplus or shareholder’s equity in excess of $10,000,000.00, (y) is regularly engaged in the business of directly or indirectly owning or operating hotel properties similar to, or better than, the Properties, and (z) at the time of the applicable Transfer, directly or indirectly owns or operates no less than twenty (20) hotel properties similar to, or better than, the Properties containing an aggregate of no less than three thousand (3000) keys (in each case of clauses (x) through (z) above, exclusive of the Properties), or (iv) any other Person reasonably approved by Lender.  In no event, however, shall a Person be deemed a Qualified Equity Holder for purposes of this Agreement if (i) such Person shall be American Realty Capital Properties, Inc. or any of its Affiliates or (ii) such Person or its Affiliates (1) is or has during the previous ten (10) years been the subject of a Bankruptcy Action, (2) has been convicted in a criminal proceeding for a felony or any crime involving moral turpitude or is an organized crime figure or is reputed to have substantial business or other affiliations with any organized crime figure, or (3) is listed on any Government Lists.

“Qualified Capital Raise” shall mean the issuance of debt or equity interests in the REIT or in any subsidiary of the REIT (excluding any such issuance completed on or before the date hereof).

“Qualified Equity Holder” shall mean (i) Guarantor or (ii) a bank, savings and loan association, investment bank, insurance company, trust company, commercial credit corporation, pension plan, pension fund or pension advisory firm, mutual fund, government entity or plan, real estate company, investment fund or an institution substantially similar to any of the foregoing, provided, in each case under this clause (ii) that such Person (x) has total assets (in its name or under its management) in excess of $1,000,000,000.00 and (except with respect to a pension advisory firm or similar fiduciary) capital/statutory surplus or shareholder’s equity in

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excess of $400,000,000.00 (in both cases, exclusive of the Property), (y) is regularly engaged in the business of directly or indirectly owning or operating hotel properties similar to, or better than, the Properties, and (z) at the time of the applicable Transfer, directly or indirectly owns or operates no less than fifty (50) hotel properties similar to, or better than, the Properties, containing an aggregate of no less than seven thousand (7,000) keys (in each case of clause (x) through clause (z) above, exclusive of the Properties), or (iii) any other Person reasonably approved by Lender. In no event, however, shall a Person be deemed a Qualified Equity Holder for purposes of this Agreement if (i) such Person shall be American Realty Capital Properties, Inc. or any of its Affiliates or (ii) (x) such Person or its Affiliates (1) is or has during the previous ten (10) years been the subject of a Bankruptcy Action, (2) has been convicted in a criminal proceeding for a felony or any crime involving moral turpitude or is an organized crime figure or is reputed to have substantial business or other affiliations with any organized crime figure, or (3) is listed on any Government Lists.

“Qualified Franchisor” shall mean (i) Franchisor or (ii) a reputable and experienced franchisor which, in the judgment of Lender, possesses experience in flagging hotel properties similar in location, size, class, use, operation and value as the Property; provided, that Lender, at its option, may require that Borrower shall have obtained (a) a Rating Agency Confirmation from the Rating Agencies and (b) if such Person is an Affiliate of Borrower and an Insolvency Option has previously been delivered in connection with the Loan, a new Insolvency Opinion.

“Qualified IPO” shall mean the closing of a public offering of the equity of the Affiliated Manager pursuant to a registration statement under the Securities Act of 1933, as amended, which results in aggregate cash proceeds to the Affiliated Manager of $100,000,000 (net of underwriting discounts and commissions). 

“Qualified Manager” shall mean (i) Property Manager or (ii) a reputable and experienced manager (which may not be an Affiliate of Borrower unless such Affiliated is approved by Lender in Lender’s sole discretion) which, in the judgment of Lender, possesses experience in managing properties similar in location, size, class, use, operation and value as the Property; provided, that Lender, at its option, may require that Borrower shall have obtained (a) a Rating Agency Confirmation from the Rating Agencies and (b) if such Person is an Affiliate of Borrower and an Insolvency Option has previously been delivered in connection with the Loan, a new Insolvency Opinion.

“Qualified Pool I De-Leveraging” shall mean any distribution by Pool I Holdco to the Pool I Preferred Equity Investors that is applied to reduction of the Pool I Redemption Price.

“Qualifying Third Party Lender Term Sheet” shall have the meaning provided in Section 11.26.1(e).

“Rating Agencies” shall mean, prior to the final Securitization of the Loan, each of S&P, Moody’s, Fitch, DBRS, Inc. and Morningstar Credit Ratings, LLC or any other nationally-recognized statistical rating agency which has been designated by Lender and, after the final Securitization of the Loan, shall mean any of the foregoing that have rated any of the Securities.

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“Rating Agency Confirmation” shall mean a written affirmation from each of the Rating Agencies that the credit rating of the Securities given by such Rating Agency immediately prior to the occurrence of the event with respect to which such Rating Agency Confirmation is sought will not be qualified, downgraded or withdrawn as a result of the occurrence of such event, which affirmation may be granted or withheld in such Rating Agency’s sole and absolute discretion; provided, however, (i) if a Securitization has occurred and either (a) any Rating Agency fails to respond to any request for a Rating Agency Confirmation with respect to such event or otherwise elects (orally or in writing) not to consider such event or (b) Lender (or Servicer) is not required to and has elected not to obtain (or cause to be obtained) a Rating Agency Confirmation with respect to such event, in each case, pursuant to and in compliance with the Securitization’s pooling and servicing agreement (or similar agreement), then, notwithstanding anything contained in this Agreement to the contrary, Lender’s written approval of such event shall be required in lieu of a Rating Agency Confirmation, in the case of clause (i)(a) above, from such Rating Agency or Rating Agencies (only) or, in the case of clause (i)(b) above, from each of the Rating Agencies or (ii) if a Securitization has not occurred, then, notwithstanding anything contained in this Agreement to the contrary, the term “Rating Agency Confirmation” shall be deemed instead to require Lender’s written approval of such event. In the event that either of clause (i) or (ii) of the foregoing proviso applies, Lender’s approval shall be based on Lender’s good faith determination of applicable Rating Agency standards and criteria, unless Lender has an independent approval right in respect of such event pursuant to the other terms of this Agreement or the other Loan Documents, in which case the discretion afforded to Lender in connection with such independent approval right shall apply.

“Recognition Agreement” means the Recognition Agreement, dated as of the date hereof, made by and among Lender, W2007 Equity Inns Partnership, L.P., a Tennessee limited partnership, and W2007 Equity Inns Trust, a Maryland trust.

“REA” shall mean, collectively, as any of the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, those certain agreements more specifically described on Schedule XII attached hereto and made a part hereof and including any other covenants, restrictions or agreements of record relating to the construction, operation or use of the Property.

“Refinancing Material Terms” shall have the meaning provided in Section 11.26.3.

“Refinancing Loan” shall have the meaning provided in Section 11.26.

“Refinancing Loan Commitment” shall have the meaning provided in Section 11.26.

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

“Regulation S-K” shall mean Regulation S-K of the Securities Act, as such regulation may be amended from time to time.

“Regulation S-X” shall mean Regulation S-X of the Securities Act, as such regulation may be amended from time to time.

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“REIT” shall mean American Realty Capital Hospitality Trust, Inc., a Maryland corporation.

“Related Loan” shall mean (i) a loan made to an Affiliate of Borrower or Guarantor or secured by a Related Property that is included in a Securitization with the Loan or any portion thereof or interest therein or (ii) any loan that is cross-collateralized or cross-defaulted with the Loan.

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

“Release Date” shall have the meaning set forth in Section 2.6.1(a).

“REMIC Trust” shall mean a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code that holds the Note or any interest therein.

“Rents” shall mean all rents, rent equivalents, moneys payable as damages (including payments by reason of the rejection of a Lease in a Bankruptcy Action) or in lieu of rent or rent equivalents, royalties (including all oil and gas or other mineral royalties and bonuses), income, fees, receivables, receipts, revenues, deposits (including, without limitation, security, utility and other deposits (including, without limitation, cash, letters of credit or securities deposited under Leases to secure the performance by the lessees of their obligations thereunder)), accounts, cash, issues, profits, charges for services rendered, and other payment and consideration of whatever form or nature received by or paid to or for the account of or benefit of Borrower, Property Manager, Intermediate Manager or any of their respective agents or employees from any and all sources arising from or attributable to the Property and the Improvements, including, without limitation, all hotel receipts, revenues and credit card receipts collected from guest rooms, restaurants, bars, meeting rooms, banquet rooms and recreational facilities, all receivables, customer obligations, installment payment obligations and other obligations now existing or hereafter arising or created out of the sale, lease, sublease, license, concession or other grant of the right of the use and occupancy of property or rendering of services by Borrower or any operator or manager of the hotel or any commercial space located in the Improvements or acquired from others (including, without limitation, from the rental of any office space, retail space, guest rooms or other space, halls, stores, and offices, and deposits securing reservations of such space), license, lease, sublease and concession fees and rentals, health club membership fees, food and beverage wholesale and retail sales, service charges, vending machine sales and the Insurance Proceeds, if any, from business interruption or other loss of income insurance, including Insurance Proceeds that Lender elects to treat as business or rental interruption Insurance Proceeds pursuant to Section 5.2.3 of this Agreement.

“Replacement Franchise Agreement” shall mean, collectively, (i)(a) a franchise, trademark and license agreement with a Qualified Franchisor substantially in the same form and substance as the Franchise Agreement, or (b) a franchise, trademark and license agreement with a Qualified Franchisor, which franchise, trademark and license agreement shall be in form and substance reasonably acceptable to Lender; provided, that , with respect to this clause (b), Lender, at its option, may require that Borrower shall have obtained a Rating Agency

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Confirmation, and (ii) a comfort letter/tri-party agreement/non-disturbance agreement/assignment of franchise agreement and subordination of franchise fees or similar agreement in form and substance reasonably satisfactory to Lender, executed and delivered to Lender by such Qualified Franchisor and, if necessary, Borrower.

“Replacement Environmental Indemnity” shall mean an Environmental Indemnity substantially in the form attached as Exhibit D to the Recognition Agreement.

“Replacement Guaranty” shall mean a Guaranty of Recourse Obligations substantially in the form attached as Exhibit C to the Recognition Agreement.

“Replacement Guaranty Financial Covenants” shall mean the financial covenants contained in Section 5.2 of the Replacement Guaranty.

“Replacement Management Agreement” shall mean, collectively, (i)(a) a management agreement with a Qualified Manager substantially in the same form and substance as the Property Management Agreement that the Replacement Management Agreement would be replacing, or (b) a management agreement with a Qualified Manager, which management agreement shall be in form and substance reasonably acceptable to Lender (it being acknowledged that an agreement in the same form and substance of any of the Property Management Agreements in place at the time of the closing of the Loan shall be deemed to be reasonably acceptable to Lender); provided, that , with respect to this clause (b), Lender, at its option, may require that Borrower shall have obtained a Rating Agency Confirmation, and (ii) an assignment of management agreement and subordination of management fees substantially in the form of the Assignment of Property Management Agreement (or in such other form and substance reasonably satisfactory to Lender), executed and delivered to Lender by Borrower and such Qualified Manager.

“Required Repairs Account” shall have the meaning set forth in Section 6.2.1.

“Required Repairs Funds” shall have the meaning set forth in Section 6.2.1.

“Required Repairs” shall have the meaning set forth in Section 6.2.1.

“Reserve Accounts” shall mean each of the Accounts established pursuant to the terms and conditions of this Agreement to hold Reserve Funds.

“Reserve Disbursement Conditions” shall mean (i) Borrower shall have submitted a request for payment to Lender at least ten (10) days prior to the date on which Borrower has requested such payment be made, which request specifies the Required Repairs, Approved FF&E Expenses, or PIP Alterations, as applicable, to be paid, (ii) on the date such request is received by Lender and on the date such payment is to be made, no Event of Default shall have occurred and be continuing, and (iii) Lender shall have received (a) an Officer’s Certificate from Borrower (1) in the case of a requested disbursement of FF&E Funds, stating that the items to be funded by the requested disbursement are Approved FF&E Expenses, and a description thereof, (2) stating that all PIP Alterations, Required Repairs or Approved FF&E Expenses, as applicable, to be funded by the requested disbursement have been completed in a good and workmanlike manner and in accordance with all applicable Legal Requirements, (3) in the case of a requested

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distribution of PIP Reserve Funds or FF&E Funds for PIP Alterations, stating that such disbursement is for PIP Alterations contemplated by the applicable PIP Plan and have been completed in accordance therewith, (4) identifying each Person that supplied materials or labor in connection with the Required Repairs, Approved FF&E Expenses, or PIP Alterations, as applicable, to be funded by the requested disbursement, (4) stating that each such Person has been paid in full or will be paid in full upon such disbursement, (5) stating that the Required Repairs, Approved FF&E Expenses, or PIP Alterations, as applicable, to be funded have not been the subject of a previous disbursement of Required Repair Funds, FF&E Funds, or PIP Reserve Funds, as applicable, (6) stating that all previous disbursements of Required Repair Funds, FF&E Funds, or PIP Reserve Funds, as applicable, have been used to pay the previously identified Required Repairs Approved FF&E Expenses, or PIP Alterations as applicable, and (7) stating that all outstanding trade payables (other than those to be paid from the requested disbursement or those constituting Permitted Indebtedness) have been paid in full, (b) a copy of any license, permit or other approval by any Governmental Authority required in connection with the Required Repairs, FF&E Work, or PIP Alterations, as applicable, and not previously delivered to Lender, (c) lien waivers or other evidence of payment satisfactory to Lender, (d) at Lender’s option, a title search for the Property indicating that the Property is free from all Liens, claims and other encumbrances not previously approved by Lender, (e) at Lender’s option, if the cost of the Required Repairs, Approved FF&E Expenses, or PIP Alterations, as applicable, exceeds $25,000.00, a report satisfactory to Lender in its reasonable discretion from an architect or engineer approved by Lender in respect of such architect or engineer’s inspection of the Required Repairs, FF&E Work, or PIP Work, as applicable, and (f) such other evidence as Lender shall reasonably request to demonstrate that the Required Repairs, Approved FF&E Expenses, or PIP Alterations, as applicable, to be funded by the requested disbursement have been completed and are paid for or will be paid upon such disbursement to Borrower.

“Reserve Funds” shall mean, collectively, all funds deposited by Borrower with Lender or the Cash Management Bank pursuant to Article 6 of this Agreement, including, but not limited to, FF&E Funds, the Insurance Funds, the Tax Funds, the Required Repair Funds, the Operating Expense Funds, the Excess Cash Flow Funds, the PIP Reserve Funds, any other escrow or reserve fund established by the Loan Documents and such other amounts deposited by or on behalf of Borrower with Lender as security for the Loan pursuant to the Loan Documents.

“Restoration” shall have the meaning set forth in Section 5.2.1.

“Restoration Threshold” shall mean (a) with respect to any individual Property an amount equal to four percent (4%) of its Allocated Loan Amount and (b) with respect to all Properties, an aggregate amount of Ten Million Dollars ($10,000,000).

“Restricted Party” shall mean, collectively, (i) Borrower, any SPC Party, Guarantor, any Affiliated Franchisor and any Affiliated Manager, (ii) any shareholder, partner, member, non-member manager or any other direct or indirect legal or beneficial owner of Borrower, any SPC Party, Guarantor, any Affiliated Manager any Affiliated Franchisor, or any non-member manager, and (iii) Preferred Equity Investor. For avoidance of doubt: (a) a Class A Member of Pool II Holdco, and the shareholders, partners, members, managers, and other direct or indirect legal or beneficial owners of such Class A Member, shall no longer be Restricted Parties from and after the consummation of a transaction by which the entire interest of such Class A Member

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is acquired by a Class B Member of Pool II Holdco in compliance with the terms and conditions hereof; and (b) a Class B Member of Pool II Holdco, and the shareholders, partners, members, managers, and other direct or indirect legal or beneficial owners of such Class B Member, shall no longer be Restricted Parties from and after the consummation of a transaction by which the entire interest of such Class B Member is acquired by a Class A Member of Pool II Holdco in compliance with the terms and conditions hereof.

“S&P” shall mean Standard & Poor’s Ratings Group, a division of the McGraw-Hill Companies.

“Satisfactory Guarantor Substitution Conditions” shall mean all of the following conditions: (a) a Satisfactory Replacement Guarantor (i) assumes the obligations of Guarantor under the Guaranty and the Environmental Indemnity or (ii) executes and delivers to Lender a replacement guaranty and a replacement environmental indemnity, in each case in form and substance substantially the same as the Guaranty and the Environmental Indemnity, respectively, and otherwise reasonably acceptable to Lender, for liabilities arising from any circumstance, condition, action or event first occurring after the effective date of such substitution; (b) concurrently with such assumption or execution and delivery (i) such Satisfactory Replacement Guarantor (if a natural married person) delivers to Lender a spousal consent in form and substance acceptable to Lender, as and to the extent applicable, and (ii) each of Borrower, the remaining Guarantor and/or such Satisfactory Replacement Guarantor, as applicable, affirms each of their respective obligations under the Loan Documents; (c) if required by Lender or the Rating Agencies, Borrower delivers to Lender an opinion from counsel, and in form and substance, in each case reasonably acceptable to Lender and acceptable to the Rating Agencies in their sole discretion stating, among other things, (i) that the Guaranty and the Environmental Indemnity (or the replacement guaranty and environmental indemnity, as the case may be) are enforceable against such Satisfactory Replacement Guarantor in accordance with their terms and (ii) that any REMIC Trust formed pursuant to a Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code or be subject to tax as a result of such Substitution; and (d) if required by Lender or the Rating Agencies and an Insolvency Opinion has previously been delivered in connection with the Loan, Borrower delivers to Lender a new Insolvency Opinion.

“Satisfactory Replacement Guarantor” shall mean a replacement guarantor that is acceptable to Lender, which determination shall be based upon, inter alia, (A) such replacement guarantor having (1) a direct or indirect ownership interest in Borrower, which is reasonably satisfactory to Lender, and (2) the ability to Control Borrower, (B) such replacement guarantor having a net worth and liquidity reasonably satisfactory to Lender, (C) Lender’s receipt of searches (including credit, negative news, OFAC, litigation, judgment, lien and bankruptcy searches) reasonably required by Lender on such replacement guarantor, the results of which must be reasonably acceptable to Lender, (D) such replacement guarantor otherwise satisfying Lender’s then current applicable underwriting criteria and requirements, and (E) such replacement guarantor being an experienced operator and/or owner of properties similar in location, size, class, use, operation and value as the Property, as evidenced by financial statements and other information reasonably requested by Lender or requested by the Rating Agencies; provided that the parties hereto hereby acknowledge that any Qualified Equity Holder shall be deemed to satisfy clause (B) of this definition for purposes of qualifying as a

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Satisfactory Replacement Guarantor so long as such Qualified Equity Holder covenants to satisfy the ongoing financial covenants contained in the Guaranty and the Environmental Indemnity.

“Scheduled Managers” shall refer to each of the Persons identified on Schedule XVII attached hereto.

“Secondary Market Transaction” shall have the meaning set forth in Section 9.1(a).

“Securities” shall have the meaning set forth in Section 9.1(a).

“Securities Act” shall have the meaning set forth in Section 9.2(a).

“Securitization” shall have the meaning set forth in Section 9.1(a).

“Security Instruments” shall mean those certain first priority fee Mortgages, Assignments of Leases and Rents and Security Agreements and Deeds of Trust, Assignments of Leases and Rents and Security Agreements, each dated as of the date hereof, executed and delivered by Borrower as security for the Loan and encumbering the Properties, as the same may be amended, restated, replaced, supplemented or otherwise modified form time to time.

“Servicer” shall have the meaning set forth in Section 11.24.

“Servicing Agreement” shall have the meaning set forth in Section 11.24.

“Severed Loan Documents” shall have the meaning set forth in Section 10.2(c).

“Significant Obligor” shall have the meaning set forth in Item 1101(k) of Regulation AB under the Securities Act.

“SPC Party” shall have the meaning set forth in clause (y) of Schedule III attached hereto.

“State” shall mean the State or Commonwealth in which the applicable Property or any part thereof is located.

“Stated Maturity Date” shall mean March 6, 2017; provided, however, if the Extension Option is duly exercised, the Stated Maturity Date shall mean March 6, 2018.

“Survey” shall mean a survey of the Property prepared by a surveyor licensed in the State and satisfactory to Lender and the company or companies issuing the Title Insurance Policy, and containing a certification of such surveyor satisfactory to Lender.

“Tax Account” shall have the meaning set forth in Section 6.3.1.

“Tax Funds” shall have the meaning set forth in Section 6.3.1.

“Taxes” shall mean all real estate and personal property taxes, assessments, water rates or sewer rents, now or hereafter levied or assessed or imposed against the Property or part thereof, together with all interest and penalties thereon.

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“Tenant” shall mean any Person obligated by contract or otherwise to pay monies (including a percentage of gross income, revenue or profits) under any Lease now or hereafter affecting all or any part of the Property.

“Tenant Direction Letter” shall have the meaning set forth in Section 6.1.

“Tender Date” shall mean the date of any prepayment of the Loan contemplated under Sections 2.4.1, 2.4.2 or 2.4.3.

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

“Term Sheet” shall mean that certain term sheet dated January 23, 2015 (as amended) executed on behalf of Borrower, together with all exhibits and documentation attached thereto and/or submitted by Borrower, Guarantor or their respective Affiliates in connection therewith.

“Third Party Lender” shall have the meaning provided in Section 11.26.1(d).

“Title Insurance Policy” shall mean an ALTA mortgagee title insurance policy in the form acceptable to Lender issued with respect to the Property and insuring the Lien of the Mortgagee.

“Transfer” shall have the meaning set forth in Section 4.2.1.

“Transferee’s Principals” shall mean, with respect to any proposed transferee, such transferee’s shareholders, partners, members or non-member managers that, directly or indirectly, (i) own twenty percent (20%) or more of the legal, beneficial or economic interests in such Transferee or (ii) are in Control of such Transferee.

“Treasury Rate” shall mean, with respect to any Interest Period, the rate per annum (rounded upwards, if necessary, to the nearest one-eighth (1/8th) of one percent (1%)) reported, with respect to the initial Interest Period, at 11:00 a.m. New York time on the date of this Agreement (or if such date is not a Business Day, the immediately preceding Business Day), and during any Interest Period thereafter, at 11:00 a.m. New York time on the date two (2) Business Days prior to prior to the last day of the Interest Period preceding the applicable Interest Period, equal to the then current yield to maturity, on an annual equivalent bond basis (recalculated to a three hundred sixty (360) day year basis), of a U.S. Treasury bill, note or bond selected by Lender (a “Treasury Note”) that is then actively trading in the secondary market and maturing one year following the date of such determination; provided, however, that if such a Treasury Note is not then outstanding, the Treasury Rate shall be the per annum rate as of each applicable determination date, equal to the current yield to maturity, on an annual equivalent bond basis (recalculated to a three hundred sixty (360) day year basis), of a Treasury Note that Lender shall, in each case in its sole and absolute discretion, determine as being appropriate to determine the Treasury Rate. If two or more issues of such Treasury Notes mature on the same day, then Lender shall in its sole discretion select one such issue for purposes of determining the Treasury Rate.

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“Trustee” shall mean any trustee holding the Loan in a Securitization.

“UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect in the State.

“Underwritten Gross Revenue” shall mean, as of any date of determination by Lender, all sustainable Gross Revenue for the preceding twelve (12) month period as determined by Lender received by Borrower, Property Manager or Intermediate Manager for the use, occupancy or enjoyment of the Property, or any part thereof, or received by Borrower, Property Manager or Intermediate Manager for the sale of any goods, services or other items sold on or provided from the Property in the ordinary course of operating the Property, including, but not limited to (i) all income and proceeds received from Leases and rental of rooms, commercial space and meeting, conference and/or banquet space within the Property (including net parking revenue) and (ii) all income and proceeds received from food and beverage operations and from catering services conducted from the Property even though rendered outside of the Property, but excluding (a) gross receipts received by lessees, licensees or concessionaires of the Property, (b) consideration received at the Property for hotel accommodations, goods and services to be provided at other hotels, although arranged by, for or on behalf of Borrower, Property Manager or Intermediate Manager, (c) income and proceeds from the sale or other disposition of goods, capital assets (including furniture, fixtures and equipment) and other items not in the ordinary course of operating the Property, (d) federal, state and municipal excise, sales, use, occupancy or other taxes collected directly from patrons or guests of the Property as a part of or based on the sales price of any goods, services or other items, such as gross receipts, room, admission, cabaret or other taxes on receipts required to be accounted for by or on behalf of Borrower to any Governmental Authority, (e) gratuities collected by the Property employees, (f) any credits or refunds made to customers, guests or patrons in the form of allowances or adjustments to previously recorded revenues, (h) other refunds and uncollectible accounts, (i) Insurance Proceeds (other than business or rental interruption or other loss of income insurance applicable to the period under consideration (but only to the extent that the same is treated as business or rental interruption Insurance Proceeds pursuant to Section 5.2.3)), (j) Awards, (k) security deposits, utility and other similar deposits, (l) any disbursements to Borrower from the Reserve Funds, (m) interest on credit accounts, and (n) items of a non-recurring nature or other income or proceeds resulting other than from the use or occupancy of the Property, or any part thereof, or other than from the sale of goods, services or other items sold on or provided from the Property in the ordinary course of business. Lender’s calculation of Underwritten Gross Revenue shall be subject to such other adjustments deemed necessary by Lender based on Lender’s current applicable underwriting criteria and requirements and Lender’s good faith determination of applicable Rating Agency criteria.

“Underwritten Net Cash Flow” shall mean, as of any date of determination by Lender, (i) Underwritten Gross Revenue, less (ii)(a) Adjusted Operating Expenses, and (b) FF&E Fund contributions equal to the greater of (1) assumed FF&E Fund contributions in an amount equal to four percent (4%) of the Gross Revenue generated during the preceding twelve (12) month period and (2) deposits required to be made to the FF&E Funds during the succeeding twelve (12) month period.

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“Uniform System of Accounts” shall mean the most recent edition of the Uniform System of Accounts for Hotels, as adopted by the American Hotel and Motel Association.

“Updated Information” shall have the meaning set forth in Section 9.1(b)(i).

“U.S. Obligations” shall mean securities evidencing an obligation to timely pay principal and/or interest in a full and timely manner that are (i) direct obligations of the United States of America for the payment of which its full faith and credit is pledged, not subject to prepayment, call or early redemption or (ii) other non-callable “government securities” within the meaning of Treasury Regulations Section 1.860G-2(a)(8)(ii), as amended, which (a) will not result in a reduction, downgrade or withdrawal of the ratings for the Securities or any class thereof issued in connection with a Securitization, (b) are then outstanding, and (c) are then being generally accepted by the Rating Agencies without any reduction, downgrade or withdrawal of the ratings for the Securities or any class thereof issued in connection with a Securitization.

“Whitehall” shall mean, collectively, Whitehall Global Real Estate Fund and Whitehall Parallel Global Real Estate Fund.

“Whitehall Global Real Estate Fund” shall mean Whitehall Street Global Real Estate Limited Partnership 2007, a Delaware limited partnership.

“Whitehall Parallel Global Real Estate Fund” shall mean Whitehall Parallel Global Real Estate Limited Partnership 2007, a Delaware limited partnership.

“Zoning Reports” shall have the meaning set forth in Section 3.1.9.

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SCHEDULE II

BORROWERS

Borrower Name	Organization type	State of Formation	Organizational ID
ARC Hospitality Portfolio II Owner, LLC	Limited liability company	Delaware	5573787
ARC Hospitality Portfolio II TRS, LLC	Limited liability company	Delaware	5573795
ARC Hospitality Portfolio II MISC TRS, LLC	Limited liability company	Delaware	5602002
ARC Hospitality Portfolio II HIL TRS, LLC	Limited liability company	Delaware	5601971
ARC Hospitality Stratford, LLC	Limited liability company	Delaware	5461941
ARC Hospitality TRS Stratford, LLC	Limited liability company	Delaware	5461963
ARC Hospitality Portfolio II NTC Owner, LP	Limited partnership	Delaware	5573903
ARC Hospitality Portfolio II NTC HIL TRS, LP	Limited partnership	Delaware	5601952
ARC Hospitality Portfolio II NTC TRS, LP	Limited partnership	Delaware	5573911

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SCHEDULE III

SINGLE PURPOSE PROVISIONS

(a)          Each Borrower has not owned, does not own and will not own any asset or property other than (i) the applicable Property, (ii) incidental personal property necessary for the ownership, management or operation of such Property, (iii) any other assets permitted to be owned pursuant to the terms and provisions of the Loan Agreement and (iv) in the case of ARC Hospitality Portfolio II NTC TRS, LP, the limited liability company interests in ARC Hospitality Portfolio II Concessions, LLC.

(b)          No Borrower has engaged, does engage, or will engage in any business other than (i) the ownership, management and operation of the applicable Property and (ii) in the case of ARC Hospitality Portfolio II NTC TRS, LP, acting as the member and manager of ARC Hospitality Portfolio II Concessions, LLC, and each Borrower will conduct and operate its business as presently conducted and operated.

(c)          No Borrower has entered and is a party to or will enter into or be a party to any contract or agreement with any Affiliate of any Borrower, any constituent party of any Borrower or any Affiliate of any constituent party, except (i) in the ordinary course of business and on terms and conditions that are disclosed to each Lender in advance and that are intrinsically fair, commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties other than any such party, (ii) the Operating Leases, the Loan Documents, and the Contribution Agreement, and (iii) the Beverage Concession Agreement and the Property Management Agreements, which agreements are intrinsically fair, commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties.

(d)          No Borrower has incurred or will incur any Indebtedness other than (i) the Debt and (ii) Equipment Leases, unsecured trade payables and operational debt (excluding so-called property-assessed clean energy or similar loans) not evidenced by a note and in an aggregate amount not exceeding in the aggregate with the other Borrowers two percent (2%) of the original principal amount of the Loan at any one time; provided that any Indebtedness incurred pursuant to subclause (ii) shall (A) be not more than sixty (60) days past due, (B) be incurred in the ordinary course of business, and (C) not, for any Borrower, exceed two percent (2%) of the Allocated Loan Amount in respect of the Properties owned or leased by such Borrower (the Indebtedness described in the foregoing clauses (i) and (ii) is referred to herein, collectively, as “Permitted Indebtedness”). No Indebtedness other than the Debt may be secured (subordinate or pari passu) by any Property.

(e)          No Borrower has made or will make any loans or advances to any Person (including any Affiliate or constituent party). No Borrower has acquired nor shall acquire obligations or securities of its Affiliates; provided however that ARC Hospitality Portfolio II NTC TRS, LP may acquire the limited liability company interests in ARC Hospitality Portfolio II Concessions, LLC.

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(f)          Each Borrower is and intends to remain solvent and each Borrower has paid and will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets (including Net Operating Income and available Reserve Funds), as the same shall become due; provided, however, that the foregoing shall not require any direct or indirect member, partner or shareholder of any Borrower to make any additional capital contributions to Borrower.

(g)          Each Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and such Borrower will not, nor will Borrower permit any SPC Party to, (i) terminate or fail to comply with the provisions of its organizational documents, or (ii) unless (A) each Lender has consented and (B) following a Securitization of the Loan, the Rating Agencies have issued a Rating Agency Confirmation in connection therewith, amend, modify or otherwise change its partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust or other organizational documents.

(h)          Except with respect to other Borrowers, as required pursuant to this Agreement or other Loan Documents, each Borrower has maintained and will maintain all of its accounts, books, records, financial statements and bank accounts separate from those of its Affiliates and any other Person. Each Borrower’s assets have not been and will not be listed as assets on the financial statement of any other Person; provided, however, that each Borrower’s assets may be included in a consolidated financial statement of its Affiliates if (i) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of each Borrower and such Affiliates and to indicate that each Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates (other than the other Borrowers with respect to this Loan) or any other Person, and (ii) such assets shall be listed on each Borrower’s own separate balance sheet. Each Borrower has and will file its own tax returns (to the extent such Borrower is required to file any such tax returns) and will not file a consolidated federal income tax return with any other Person, except to the extent that such Borrower is (i) required to file consolidated tax returns by law or (ii) treated as a “disregarded entity” for tax purposes and are not required to file tax returns under applicable law. Each Borrower has maintained and shall maintain its books, records, resolutions and agreements as official records.

(i)          Except with respect to other Borrowers, as required pursuant to this Agreement or other Loan Documents, each Borrower has been and will be, and has held and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower or any constituent party of Borrower) (recognizing that any Borrower may be treated as a “disregarded entity” for tax purposes and is not required to file tax returns for tax purposes under applicable law), has corrected and shall correct any known misunderstanding regarding its status as a separate entity, has conducted and shall conduct business in its own name, has not identified and shall not identify itself or any of its Affiliates as a division or part of the other, and has maintained and shall, to the extent reasonably necessary for the operation of its business, maintain and utilize separate stationery, invoices and checks bearing its own name.

(j)          Each Borrower has maintained and intends to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of

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its contemplated business operations; provided, however, that the foregoing shall not require any direct or indirect member, partner or shareholder of Borrower to make any additional capital contributions to Borrower.

(k)          No Borrower and no constituent party has sought or will seek or effect the liquidation, dissolution, winding up, consolidation or merger, in whole or in part, of any Borrower; provided, however, that any Borrower may merge with or into any other Borrower, provided that, in each case no Default (as defined in the Loan Agreement) shall have occurred and be continuing at the time of such proposed transaction or would result therefrom. .

(l)          Except with respect to other Borrowers, as required pursuant to this Agreement or other Loan Documents, no Borrower has commingled and will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party or any other Person, and has held and will hold all of its assets in its own name; provided, provided however that the revenue from a Property may be deposited by the related Manager in a Clearing Account maintained in the name of ARC Hospitality Portfolio II TRS Holdco, LLC (the “Account Representative”) wherein the funds attributable to such Property can be comingled with other funds belonging to one or more other Borrowers, so long as such funds attributable to such Property can be identified through a book entry subaccount and applied in accordance with the terms of the Loan Agreement.

(m)          Except with respect to other Borrowers, as required pursuant to this Agreement or other Loan Documents, each Borrower has maintained and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any other Person.

(n)          Except in connection with the Loan or pursuant to an Indemnity Agreement, no Borrower has assumed or guaranteed or become obligated for the debts of any other Person and has not held itself out to be responsible for or have its credit available to satisfy the debts or obligations of any other Person (except in each case for the other Borrowers with respect to the Loan and the Obligations), and Borrower will not assume or guarantee or become obligated for the debts of any other Person and does not and will not hold itself out to be responsible for or have its credit available to satisfy the debts or obligations of any other Persons; provided however that the obligations of a Borrower under a Franchise Agreement may be guaranteed by the Borrower which is the fee owner of the Property to which such Franchise Agreement relates.

(o)          Each Borrower, each SPC Party and each Liquor License Subsidiary shall conduct their respective business so that the assumptions made with respect to each Borrower, each SPC Party and each Liquor License Subsidiary in any Insolvency Opinion delivered in connection with the Loan shall be true and correct in all material respects and, to the extent that an Insolvency Opinion has previously been delivered in connection with the Loan, each Borrower, each SPC Party and each Liquor License Subsidiary have at all times conducted their respective business so that the assumptions made with respect to each Borrower, each SPC Party and each Liquor License Subsidiary in such Insolvency Opinion shall be true and correct in all material respects. In connection with the foregoing, each Borrower hereby covenants and agrees that it, each SPC Party and each Liquor License Subsidiary will comply with or cause the compliance with, (i) in all material respects, all of the facts and assumptions (whether regarding any

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Borrower, any SPC Party or any Liquor License Subsidiary) set forth in any Insolvency Opinion delivered in connection with the Loan, (ii) all the representations, warranties and covenants in Sections 3.1.24 and 4.1.15 and this Schedule III, and (iii) all the organizational documents of each Borrower, each SPC Party and each Liquor License Subsidiary.

(p)          No Borrower has permitted nor will permit any Affiliate or constituent party independent access to its bank accounts other than (i) Intermediate Manager, as Borrower’s agent, in connection with Intermediate Manager’s role as a hotel manager of the Property pursuant to the Intermediate Management Agreement and subject to subsection (l) and Crestline Hotels & Resorts, LLC, as Borrower’s agent, in connection with Crestline Hotels & Resorts, LLC’s role as a hotel manager of the Property pursuant to a Property Management Agreement and subject to subsection.

(q)          Each Borrower has paid and shall pay the salaries of its own employees (if any) from its own funds and has and shall maintain a sufficient number of employees (if any) in light of its contemplated business operations; provided, however, that the foregoing shall not require any direct or indirect member, partner or shareholder of any Borrower to make any additional capital contributions to such Borrower.

(r)          Each Borrower has compensated and shall compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred; provided, however, that the foregoing shall not require any direct or indirect member, partner or shareholder of any Borrower to make any additional capital contributions to such Borrower.

(s)          No Borrower has, nor without the unanimous consent of all of its members, partners, directors or managers (including each Independent Director) will, take any action that might reasonably be expected to cause any Borrower or any Liquor License Subsidiary to become insolvent.

(t)          Each Borrower has allocated and will allocate fairly and reasonably any shared expenses, including shared office space.

(u)          Except in connection with the Loan, no Borrower has pledged nor will pledge its assets for the benefit of any other Person.

(v)         Each Borrower either (i) has no, and will have no, obligation to indemnify its officers, directors, managers, members, shareholders or partners, as the case may be, or (ii) if it has any such obligation, such obligation is fully subordinated to the Debt and will not constitute a claim against any Borrower if cash flow in excess of the amount required to pay the Debt is insufficient to pay such obligation.

(w)          Each Borrower will consider the interests of Borrowers’ creditors in connection with all limited liability company or limited partnership actions.

(x)          Except (i) as provided in the Loan Documents or an Indemnity Agreement and (ii) in the case of ARC Hospitality Stratford, LLC and ARC Hospitality TRS Stratford, LLC, any prior mortgage financing that has been fully paid and discharged in full prior to the date hereof,

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no Borrower has, or will have, any of its obligations guaranteed by any Affiliate; provided however that a Borrower which is the lessee of a Property may have its obligations under the Franchise Agreement related to such Property, may be guaranteed by American Realty Capital Hospitality Trust, Inc. or the Borrower which is the fee owner of such Property.

(y)          Each LP Borrower’s organizational documents shall provide that such LP Borrower shall have (and such LP Borrower shall at all times cause there to be) at least one general partner of such LP Borrower (each, an “SPC Party”) which shall be a Delaware limited liability company whose sole asset is its interest in such LP Borrower, and each such SPC Party:

(i)          will cause the related LP Borrowers to comply with each of the representations, warranties and covenants contained in Sections 3.1.24 and 4.1.15 and this Schedule III;

(ii)         will at all times comply with each of the representations, warranties and covenants contained in Sections 3.1.24 and 4.1.15 and this Schedule III (other than subsections (a), (b), (d), (cc), (dd), (ee), (ff) and (gg) of this Schedule III) as if such representation, warranty or covenant was made directly by such SPC Party;

(iii)        has not owned, does not own and will not own any asset or property other than (A) its interest in the related LP Borrowers and (B) incidental personal property necessary for the ownership of such interest or acting as the general partner of such LP Borrower;

(iv)        has not and will not engage in any business or activity other than owning an interest in the related LP Borrower and acting as the general partner of the such LP Borrower; and

(v)         has not and will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation) other than unsecured trade payables incurred in the ordinary course of business related to the ownership of an interest in the related LP Borrower that (A) do not exceed at any one time $10,000.00, and (B) are paid within thirty (30) days after the date incurred.

Each LP Borrower’s organizational documents shall provide that upon the withdrawal or the disassociation of the related SPC Party from such LP Borrower, such LP Borrower shall immediately appoint a new SPC Party whose certificate of formation and limited liability company agreement are substantially similar to those of such SPC Party and, if an Insolvency Opinion has previously been delivered in connection with the Loan, shall deliver a new Insolvency Opinion.

(z)          The organizational documents of each Borrower shall provide that as long as any portion of the Obligations remain outstanding, such Borrower will not:

(i)          dissolve, merge, liquidate or consolidate, except as provided in clause (k) above or clause (aa)(i) below;

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(ii)         except in connection with a sale or other transfer permitted under the Loan Documents, sell all or substantially all of its assets;

(iii)        amend its organizational documents with respect to the matters set forth in this Schedule III, without (A) the prior written consent of each Lender, (B) in the case of a LLC Borrower, the affirmative vote of each Independent Director of such LLC Borrower, and (C) in the case of a LP Borrower (i) the affirmative vote of the related SPC Party and (ii) the affirmative vote of each Independent Director of such SPC Party; or

(iv)        (A) without the affirmative vote of each of its members or partners, (B) in the case of a LLC Borrower, the affirmative vote of each Independent Director of such LLC Borrower, (C) in the case of a LP Borrower, without the affirmative vote of each Independent Director of the related SPC Party, take any Material Action with respect to itself or to any other entity in which it has a direct or indirect legal or beneficial ownership interest.

(aa)         The organizational documents of each LP Borrower shall provide that as long as any portion of the Obligations remain outstanding,

(i)          such LP Borrower will dissolve only upon the bankruptcy of the related SPC Party;

(ii)         the vote of a majority-in-interest of the remaining partners of such LP Borrower is sufficient to continue the life of the limited partnership in the event of such bankruptcy of the related SPC Party; and

(iii)        if the vote of a majority-in-interest of the remaining members or partners of such LP Borrower to continue the life of the limited liability partnership following the bankruptcy of the related SPC Party is not obtained, such LP Borrower may not liquidate the related Property without the prior written consent of each Lender and the Rating Agencies for as long as the Loan is outstanding.

(bb)         The organizational documents of each SPC Party shall provide that there shall at all times be (and each SPC Party shall at all times cause there to be) at least two (2) duly appointed managers (each, an “Independent Director”) of such SPC Party:

(i)          who shall be a natural person who is provided by a nationally recognized professional service company;

(ii)         who shall have at least three (3) years prior employment experience as an independent director; and

(iii)        who shall not have been at the time of such individual’s appointment or at any time while serving as an Independent Director, and shall not have ever been (A) a stockholder, member, director or manager (other than as an Independent Director), officer, employee, partner, attorney or counsel of any Borrower, any Liquor License Subsidiary, any SPC Party or any Affiliate of any Borrower, any Liquor License Subsidiary, any SPC Party or any direct or indirect equity holder of any of them, (B) a

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creditor, customer, supplier, service provider or other Person who derives any of its revenues or purchases from its activities with any Borrower, any Liquor License Subsidiary, any SPC Party or any Affiliate of any Borrower, any Liquor License Subsidiary or any SPC Party, (C) a member of the immediate family of any such stockholder, member, director, manager, officer, employee, partner, attorney, counsel, creditor, customer, supplier, service provider or other Person, (D) a Person who is otherwise affiliated with any Borrower, any Liquor License Subsidiary, any SPC Party or any Affiliate of any Borrower, any Liquor License Subsidiary, any SPC Party or any direct or indirect equity holder of any of them or any such stockholder, member, director, manager, officer, employee, partner, attorney, counsel, creditor, customer, supplier, service provider or other Person, or (E) a Person Controlling, Controlled by or under common Control with any of (A), (B), (C) or (D) above.

As used in this subsection (bb), “nationally recognized professional service company” includes Corporation Services Company, CT Corporation, National Registered Agents, Inc., Stewart Management Company, Wilmington Trust Company and Lord Securities Corporation or, if none of those companies is then providing professional Independent Directors, another nationally-recognized company reasonably approved by each Lender, in each case that is not an Affiliate of Borrower and that provides professional Independent Directors and other corporate services in the ordinary course of business.

(cc)         The organizational documents of each SPC Party shall provide that as long as any portion of the Obligations remain outstanding:

(i)          the managers of such SPC Party shall not take any action which, under the terms of such SPC Party’s certificate of formation and limited liability company agreement, requires a unanimous vote of the managers of such SPC Party unless, at the time of such action, there shall be at least two Independent Directors of such SPC Party then serving in such capacity and each Independent Director has participated in such vote;

(ii)         no resignation or removal of an Independent Director, and no appointment of a successor Independent Director, shall be effective until such successor shall have executed a counterpart to such SPC Party’s limited liability company agreement; provided, however, that (A) no Independent Director may be removed or replaced without Cause, and (B) no Independent Director shall resign or be removed, and no successor Independent Director shall be appointed unless Borrower provides each Lender with at least five (5) days prior written notice of any such proposed resignation or removal and the identity of any such successor Independent Director together with a certification that such successor satisfies the requirements for an Independent Director set forth in this Schedule III;

(iii)        in the event of a vacancy in the position of Independent Director, the members of such SPC Party shall, subject to the preceding clause (ii), appoint a successor Independent Director as soon as practicable;

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(iv)        to the fullest extent permitted by law and notwithstanding any duty existing at law or equity, the Independent Directors shall consider only the interests of the applicable LP Borrower, including each Lender and its other creditors, in acting or otherwise voting on the matters referred to in clauses (cc)(vii)(C) or (cc)(vii)(D) below of this Schedule III;

(v)         except for duties to the applicable LP Borrower as set forth in the immediately preceding clause (iv) (including duties to the SPC Party and such LP Borrower’s creditors solely to the extent of their respective economic interests in Borrower but excluding (A) all other interests of the SPC Party, (B) the interests of other Affiliates of such LP Borrower, and (C) the interests of any group of Affiliates of which such LP Borrower is a part), the Independent Directors shall not have any fiduciary duties to such SPC Party or any other Person bound by such SPC Party’s operating agreement; provided, however, the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing;

(vi)        [Intentionally deleted];

(vii)       such SPC Party will not:

(A)         dissolve, merge, liquidate or consolidate, except as provided in clause (cc)(viii) below;

(B)         except in connection with a sale or other transfer permitted under the Loan Documents, sell all or substantially all of its assets;

(C)         amend its organizational documents or the applicable LP Borrower’s organizational documents with respect to the matters set forth in this Schedule III, without the prior written consent of each Lender and without the affirmative vote of each Independent Director of such SPC Party; or

(D)         without the affirmative vote of its each Independent Director of such SPC Party and of all other directors or managers of such SPC Party, take any Material Action with respect to itself, the applicable LP Borrower or any other entity in which the applicable LP Borrower has a direct or indirect legal or beneficial ownership interest;

(viii)      such SPC Party shall be dissolved, and its affairs shall be wound up, only upon the first to occur of the following: (A) the termination of the legal existence of the last remaining member of such SPC Party or the occurrence of any other event which terminates the continued membership of the last remaining member of such SPC Party in such SPC Party unless the business of such SPC Party is continued in a manner permitted by its operating agreement or the Delaware Limited Liability Company Act (the “Act”), or (B) the entry of a decree of judicial dissolution under Section 18-802 of the Act;

(ix)         upon the occurrence of any event that causes the last remaining member of such SPC Party or the sole member of such SPC Party (in each case, the “Final Member”) to cease to be a member of such SPC Party (other than (A) upon an

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assignment by Final Member of all of its limited liability company interest in such SPC Party and the admission of the transferee, if permitted pursuant to the organizational documents of such SPC Party and the Loan Documents, or (B) the resignation of Final Member and the admission of an additional member of such SPC Party, if permitted pursuant to the organizational documents of such SPC Party and the Loan Documents), to the fullest extent permitted by law, the personal representative of such last remaining member shall be authorized to, and shall, within ninety (90) days after the occurrence of the event that terminated the continued membership of such member in such SPC Party, agree in writing (1) to continue the existence of such SPC Party and (2) to the admission of the personal representative or its nominee or designee, as the case may be, as a substitute member of such SPC Party, effective as of the occurrence of the event that terminated the continued membership of such member in such SPC Party;

(x)          the bankruptcy of Final Member or a special member of such SPC Party shall not cause Final Member or special member, respectively, to cease to be a member of such SPC Party and upon the occurrence of such an event, the business of such SPC Party shall continue without dissolution;

(xi)         in the event of the dissolution of such SPC Party, such SPC Party shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of such SPC Party in an orderly manner), and the assets of such SPC Party shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act; and

(xii)        to the fullest extent permitted by law, each of Final Member and the special members of such SPC Party shall irrevocably waive any right or power that they might have to cause such SPC Party or any of its assets to be partitioned, to cause the appointment of a receiver for all or any portion of the assets of such SPC Party, to compel any sale of all or any portion of the assets of such SPC Party pursuant to any applicable law or to file a complaint or to institute any proceeding at law or in equity to cause the dissolution, liquidation, winding up or termination of such SPC Party.

(dd)         Each LLC Borrower’s organizational documents shall provide that there shall at all times be (and such LLC Borrower shall at all times cause there to be) at least two (2) duly appointed Independent Directors of such LLC Borrower:

(i)          who shall be a natural person who is provided by a nationally recognized professional service company;

(ii)         who shall have at least three (3) years prior employment experience as an independent director; and

(iii)        who shall not have been at the time of such individual’s appointment or at any time while serving as an Independent Director, and shall not have ever been (A) a stockholder, member, director or manager (other than as an Independent Director), officer, employee, partner, attorney or counsel of any Borrower, any Liquor License Subsidiary, any SPC Party or any Affiliate of any Borrower, any Liquor License

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Subsidiary, any SPC Party or any direct or indirect equity holder of any of them, (B) a creditor, customer, supplier, service provider or other Person who derives any of its revenues or purchases from its activities with any Borrower, any Liquor License Subsidiary, any SPC Party or any Affiliate of any Borrower, any Liquor License Subsidiary or any SPC Party, (C) a member of the immediate family of any such stockholder, member, director, manager, officer, employee, partner, attorney, counsel, creditor, customer, supplier, service provider or other Person, (D) a Person who is otherwise affiliated with any Borrower, any Liquor License Subsidiary, any SPC Party or any Affiliate of any Borrower, any Liquor License Subsidiary, any SPC Party or any direct or indirect equity holder of any of them or any such stockholder, member, director, manager, officer, employee, partner, attorney, counsel, creditor, customer, supplier, service provider or other Person, or (E) a Person Controlling, Controlled by or under common Control with any of (A), (B), (C) or (D) above

As used in this subsection (dd), “nationally recognized professional service company” includes Corporation Services Company, CT Corporation, National Registered Agents, Inc., Stewart Management Company, Wilmington Trust Company and Lord Securities Corporation or, if none of those companies is then providing professional Independent Directors, another nationally-recognized company reasonably approved by each Lender, in each case that is not an Affiliate of Borrower and that provides professional Independent Directors and other corporate services in the ordinary course of business.

(ee)         Each LLC Borrower’s organizational documents shall provide that as long as any portion of the Obligations remains outstanding:

(i)          the directors or managers of such LLC Borrower shall not take any action which, under such LLC Borrower’s certificate of formation or operating agreement, requires the unanimous affirmative vote of such LLC Borrower’s directors or managers unless at the time of such action there are at least two (2) Independent Directors then serving in such capacity and each Independent Director has participated in such vote;

(ii)         no resignation or removal of an Independent Director, and no appointment of a successor Independent Director, shall be effective until such successor shall have executed a counterpart to such LLC Borrower’s operating agreement; provided, however, that no Independent Director shall resign or be removed, and no successor Independent Director shall be appointed unless such LLC Borrower provides each Lender with at least five (5) days prior written notice of any such proposed resignation or removal and the identity of any such successor Independent Director, together with a certification that such successor satisfies the requirements for an Independent Director set forth in this Schedule III;

(iii)        in the event of a vacancy in the position of Independent Director, the member of such LLC Borrower shall, subject to the preceding clause (ii), appoint a successor Independent Director as soon as practicable;

(iv)        to the fullest extent permitted by law and notwithstanding any duty existing at law or equity, the Independent Directors shall consider only the interests of

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such LLC Borrower, including each Lender and its other creditors, in acting or otherwise voting on the matters referred to in clauses (ee)(vii)(C) or (ee)(vii)(D) below of this Schedule III;

(v)         except for duties to such LLC Borrower as set forth in the immediately preceding clause (iv) (including duties to the member(s) of such LLC Borrower and such LLC Borrower’s creditors solely to the extent of their respective economic interests in such LLC Borrower but excluding (A) all other interests of the member(s) of such LLC Borrower, (B) the interests of other Affiliates of such LLC Borrower, and (C) the interests of any group of Affiliates of which such LLC Borrower is a part), the Independent Directors shall not have any fiduciary duties to the member(s) of such LLC Borrower or any other Person bound by such LLC Borrower’s operating agreement; provided, however, the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing;

(vi)        [intentionally deleted]; and

(vii)       such LLC Borrower will not:

(A)         dissolve, merge, liquidate or consolidate, except as provided in clause (k) above or clause (ee)(viii) below;

(B)         except in connection with a sale or other transfer permitted under the Loan Documents, sell all or substantially all of its assets;

(C)         amend its organizational documents with respect to the matters set forth in this Schedule III, without the prior written consent of each Lender and without the affirmative vote of its two (2) Independent Directors; or

(D)         without the affirmative vote of its two (2) Independent Directors and of all other directors or managers of such LLC Borrower, take any Material Action with respect to itself or to any other entity in which it has a direct or indirect legal or beneficial ownership interest.

(viii)      such LLC Borrower shall be dissolved, and its affairs shall be wound up, only upon the first to occur of the following: (A) the termination of the legal existence of the last remaining member of such LLC Borrower or the occurrence of any other event which terminates the continued membership of the last remaining member of such LLC Borrower in such LLC Borrower unless the business of such LLC Borrower is continued in a manner permitted by its operating agreement or the Act, or (B) the entry of a decree of judicial dissolution under Section 18-802 of the Act;

(ix)         upon the occurrence of any event that causes the last remaining member of such LLC Borrower or the sole member of such LLC Borrower (in each case, the “Final Member”) to cease to be a member of such LLC Borrower (other than (A) upon an assignment by Final Member of all of its limited liability company interest in such LLC Borrower and the admission of the transferee, if permitted pursuant to the organizational documents of such LLC Borrower and the Loan Documents, or (B) the resignation of

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Final Member and the admission of an additional member of such LLC Borrower, if permitted pursuant to the organizational documents of LLC Borrower and the Loan Documents), to the fullest extent permitted by law, the personal representative of such last remaining member shall be authorized to, and shall, within ninety (90) days after the occurrence of the event that terminated the continued membership of such member in such LLC Borrower, agree in writing (1) to continue the existence of such LLC Borrower and (2) to the admission of the personal representative or its nominee or designee, as the case may be, as a substitute member of such LLC Borrower, effective as of the occurrence of the event that terminated the continued membership of such member in such LLC Borrower;

(x)          the bankruptcy of Final Member or a special member of such LLC Borrower shall not cause Final Member or such special member, respectively, to cease to be a member of such LLC Borrower and upon the occurrence of such an event, the business of such LLC Borrower shall continue without dissolution;

(xi)         in the event of the dissolution of such LLC Borrower, such LLC Borrower shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of such LLC Borrower in an orderly manner), and the assets of such LLC Borrower shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act; and

(xii)        to the fullest extent permitted by law, each of Final Member and the special members of such LLC Borrower shall irrevocably waive any right or power that they might have to cause such LLC Borrower or any of its assets to be partitioned, to cause the appointment of a receiver for all or any portion of the assets of such LLC Borrower, to compel any sale of all or any portion of the assets of such LLC Borrower pursuant to any applicable law or to file a complaint or to institute any proceeding at law or in equity to cause the dissolution, liquidation, winding up or termination of such LLC Borrower.

(ff)         Each Liquor License Subsidiary shall be a Delaware limited liability company with one member and:

(i)          will at all times comply with each of the representations, warranties and covenants contained in Sections 3.1.24 and 4.1.15 and this Schedule III (other than subsections (a), (b), (d), (e), (s), (y), (z), (aa), (bb), (cc), (dd) and (ee) of this Schedule III) as if such representation, warranty or covenant was made directly by such Liquor License Subsidiary;

(ii)         has not owned, does not own and will not own any asset or property other than (A) in the case of ARC Hospitality Portfolio II Concessions, LLC, its interest in ARC Hospitality Portfolio II TX MANAGEMENT, LLC and incidental personal property necessary for the ownership of such interest, (B) in the case of ARC Hospitality Portfolio II TX MANAGEMENT, LLC, its interest in ARC Hospitality Portfolio II TX HOLDINGS, LLC and incidental personal property necessary for the ownership of such interest, (C) in the case of ARC

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Hospitality Portfolio II TX HOLDINGS, LLC, its interest in ARC Hospitality Portfolio II TX BEVERAGE COMPANY and incidental personal property necessary for the ownership of such interest, and (D) in the case of ARC Hospitality Portfolio II TX BEVERAGE COMPANY, its interest in the liquor licenses, its interest in the alcohol bought and sold, and incidental personal property necessary for the ownership of such interest;

(iii)        has not and will not engage in any business or activity other than A) in the case of ARC Hospitality Portfolio II Concessions, LLC, owning an interest in, and acting as the member and manager of, ARC Hospitality Portfolio II TX MANAGEMENT, (B) in the case of ARC Hospitality Portfolio II TX MANAGEMENT, LLC, owning an interest in, and acting as the member and manager of, ARC Hospitality Portfolio II TX HOLDINGS, LLC, (C) in the case of ARC Hospitality Portfolio II TX HOLDINGS, LLC, owning an interest in, and acting as the member and manager of, ARC Hospitality Portfolio II TX BEVERAGE COMPANY, and (D) in the case of ARC Hospitality Portfolio II TX BEVERAGE COMPANY, owning the liquor licenses, owning the alcohol related products, and acting holder of a liquor license;

(iv)        has not and will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation) other than unsecured trade payables incurred in the ordinary course of business related to the applicable business set forth in clause (iv) above that (A) do not exceed at any one time $10,000.00, and (B) are paid within thirty (30) days after the date incurred;

(v)         (A) has not made and will not make any loans or advances to any Person (including any Affiliate or constituent party); and (B) has not acquired and shall not acquire obligations or securities of its Affiliates; provided however that (1) ARC Hospitality Portfolio II Concessions, LLC may acquire the limited liability company interests in ARC Hospitality Portfolio II TX MANAGEMENT, (2) ARC Hospitality Portfolio II TX MANAGEMENT may acquire the limited liability company interests in ARC Hospitality Portfolio II TX HOLDINGS, LLC and (3) ) ARC Hospitality Portfolio II TX HOLDINGS, LLC may acquire the limited liability company interests in ARC Hospitality Portfolio II TX BEVERAGE COMPANY; and

(vi)        has not, and without the unanimous consent of (A) all of its members, partners, directors or managers and (B) each Independent Director of ARC Hospitality Portfolio II NTC TRS, LP, will not, take any action that might reasonably be expected to cause such Liquor License Subsidiary to become insolvent;

(gg)         The organizational documents of each Liquor License Subsidiary shall provide that as long as any portion of the Obligations remain outstanding, such Liquor License Subsidiary will not:

(i)          dissolve, merge, liquidate or consolidate, except as provided in clause (k) above or clause (aa)(i) above;

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(ii)         except in connection with a sale or other transfer permitted under the Loan Documents, sell all or substantially all of its assets;

(iii)        amend its organizational documents with respect to the matters set forth in this Schedule III without (A) the prior written consent of each Lender, (B) the affirmative vote of each of its members and ARC Hospitality Portfolio II NTC TRS, LP, and (C) the affirmative vote of each Independent Director of ARC Hospitality Portfolio II NTC TRS, LP; or

(iv)        (A) without the affirmative vote of each of its members and ARC Hospitality Portfolio II NTC TRS, LP, and (B) the affirmative vote of each Independent Director of ARC Hospitality Portfolio II NTC TRS, LP, take any Material Action with respect to itself or to any other entity in which it has a direct or indirect legal or beneficial ownership interest.

(hh)         The organizational documents of each Borrower and each SPC Party shall provide an express acknowledgment that each Lender is an intended third-party beneficiary of the “special purpose” provisions of such organizational documents.

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SCHEDULE IV

ORGANIZATIONAL CHART

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SCHEDULE V

REQUIRED REPAIRS

Each of the items listed on this Schedule V shall be completed no later than the earlier of (i) the requirements of any PIP, and (ii) one hundred twenty (120) days after the Closing Date.

Property	Required Repair	Reserve Amount
Courtyard Dalton	·   Replace standard response sprinkler heads in the pool, pool restrooms & fitness center replace with quick response, corrosive resistant type sprinkler heads. ·   A 2nd sprinkler head may need to be added for proper coverage in the pool equipment room. Have sprinkler company confirm coverage and add a head if necessary. ·   Add a sprinkler head in the linen chute discharge closet. ·   Replace the painted sidewall sprinkler above the bathroom door in guestroom 101. As well as the complete list from the sprinkler contractor. ·   Add a strobe in the kitchen, maintenance shop, guest laundry, employee break room, employee restroom and in the public space corridor on the 1st floor. ·   Provide stairwell identification signage on all levels including name of stair, floor level, terminus of stair enclosure (top and bottom) and direction to exit discharge. ·   Install emergency lighting with battery back-up in the kitchen, maintenance shop and guest laundry. ·   Relocate exit signs in the 2nd & 3rd floor corridors that are being blocked by lights.	$14,375.00
Courtyard Houston	·   All sprinkler valves must have signage attached that indicates the valve type, function, and area served. ·   Install emergency lighting in the following areas: ·   1st floor linen chute room ·   Employee break room ·   Main Laundry ·   Fitness room ·   Admin back office ·   Back office by the time clock ·   Kitchen, one on each side of the cook line ·   Install emergency lighting in the following areas: ·   In the corridor by the meeting room main doors so that when exiting the space, an exit sign will be seen in 2 directions. ·   In front of the corridor fire doors by the Engineers office	$6,650.00

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Property	Required Repair	Reserve Amount
	·   In the corridor by room 150 ·   Install a strobe light warning device in the guest laundry, and in the employee break room. ·   Install 110 candela strobe light warning devices in the hearing impaired guest room sleeping areas. Currently the strobe devices are 75 cd. ·   Install a fire alarm system remote annunciator in the area of the front desk or in an area constantly attended 24/7. ·   Install sprinkler protection in the closets of the meeting rooms.
Courtyard Carlsbad	·   Label all sprinkler control valves to include the valve type, function, and area served. The description should correspond with the fire alarm control panel. ·   Install emergency exit lights with battery back up in the following locations: ·   a) Outside the hotel above the front door ·   b) Outside the hotel above the exit door near room 101 ·   c) Outside the hotel above the exit door by the fitness room ·   d) Outside the hotel above the side exit door of the breakfast room ·   e) Employee restrooms ·   f) Guest laundry room ·   Modify the existing fire alarm system throughout the hotel to include the following: ·   Install a horn/strobe in the kitchen area. ·   Install new hard-wired single station photoelectric smoke alarms with a battery backup in all guest rooms. ·   Install new hard-wired single station photoelectric smoke alarms equipped with an integrated strobe with battery backup in the sleeping areas (including living rooms) of all hearing-impaired guestrooms. ·   Interconnect smoke alarms within multiple-room suites so that when one smoke alarm is in alarm it activates the other smoke alarms within the same guest room suite. ·   If the existing fire alarm panel is replaced, ensure that it meets the current editions of Marriott International Design Standard Module 14 and NFPA 72, to include Module 14 submittal requirements.	$17,875.00
Residence Inn	·   Replace the painted and rusted sprinkler head in stair “B”, 1st floor.	$30,938.00

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Property	Required Repair	Reserve Amount
Jacksonville	·   Replace the damaged sprinkler head in the soda/liquor storeroom. ·   Provide stairwell identification signage on all levels including name of stair, floor level, terminus of stair enclosure (top and bottom) and direction to exit discharge.
SpringHill Suites Asheville	·   Install stairwell identification signage on all levels including name of stair, floor level, terminus of stair enclosure (top and bottom) and direction to exit discharge. ·   Replace the sprinkler heads above the pool with new quick response corrosive resistant sprinkler heads. ·   Install emergency exit lights with battery back up in the following locations: ·   All public restrooms ·   Employee break room ·   Employee restrooms ·   Fitness room ·   Guest laundry room ·   Mechanical/electrical rooms ·   Kitchen ·   Board room	$4,225.00
TownePlace Suites Savannah	·   Install “F.D.C.” (Fire Department Connection) signage on or above the sprinkler system Siamese fire hose connection on both building A & B. The permanent sign to feature 4” white letters on a red background. ·   Label all sprinkler control valves to include the area served, i.e. 4th floor, attic etc. The description should correspond with the fire alarm control panel. ·   Replace the painted sprinkler heads in the new breakfast area.	$5,313.00
Hampton Inn Milford	·   Carbon monoxide detectors must be provided in the room or area of origin for all areas utilizing fuel-fired equipment, including fireplaces. Combination smoke/carbon monoxide detectors are permissible. Refer to local codes and ordinances for additional requirements. Install in the boiler room and behind the dryers. ·   NFPA 70 compliant wiring is required for the refrigeration equipment in the 3rd Floor Storage Room. ·   The fire door to the Laundry Room (1st floor) shall not be wedged open. A magnetic hold-open device tied in to the building's fire alarm is recommended and is the only compliant method of holding this door open ·   The smoke alarm in Room #117 needs repair.	$3,750.00

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Property	Required Repair	Reserve Amount
Homewood Suites by Hilton Augusta	·   Install CO Detector in lobby / fireplace	$1,250.00

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SCHEDULE VI

SECONDARY MARKET TRANSACTION INFORMATION

(A) Any proposed program for the renovation, improvement or development of the Property, or any part thereof, including the estimated cost thereof and the method of financing to be used.

(B) The general competitive conditions to which the Property is or may be subject.

(C) Management of the Property.

(D) Occupancy rate expressed as a percentage for each of the last five (5) years.

(E) Principal business, occupations and professions carried on in, or from the Property.

(F) Number of Tenants occupying 10% or more of the total rentable square footage of the Property and principal nature of business of such Tenant, and the principal provisions of the Leases with those Tenants including, but not limited to: rental per annum, expiration date and renewal options.

(G) The average effective annual rental per square foot or unit for each of the last three (3) years prior to the date of filing.

(H) Schedule of the Lease expirations for each of the ten (10) years starting with the year in which the registration statement is filed (or the year in which the prospectus supplement is dated, as applicable), stating:

(1) The number of Tenants whose Leases will expire.

(2) The total area in square feet covered by such Leases.

(3) The annual rental represented by such Leases.

(4) The percentage of gross annual rental represented by such Leases.

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SCHEDULE 3.1.11

Condemnation matters

PROPERTY NAME	ADDRESS	CITY	ST	Condemnation Proceedings
Hampton Inn Austin	7619 IH-35 North	Austin	TX	According to Christopher Bishop, Public Information Office with the Texas Department Transportation, “There are no immediate projects planned that would impact the hotel property. However, we are in the middle of long term planning for the future of Interstate 35. The process, called Mobility 35, could involve adding a travel lane in each direction, with some modifications to ramps all along the interstate in Williamson, Travis and Hays Counties.”
Hampton Inn Knoxville	148 International Dr	Alcoa	TN	According to Andrew Sonner, “We did receive the grant. We are currently surveying and will start the environmental clearances for this project in the near future. We plan to start construction summer of 2015. Please see the revised exhibit.”  Attached is the Revised Greenway Trails/ Sidewalk Conceptual Plan. The subject property is highlighted in yellow. Proposed sidewalks are shown with a thick black line.  Sidewalks are proposed along Airport Plaza Blvd and International Drive.
Homewood Suites Orlando	8745 International Dr	Orlando	FL	According to Brian Sanders, Chief Transportation Planner, “Orange County is in the process of developing

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transit lanes on International Drive.  Currently, our Real Estate Management Division is assembling the necessary right-of-way needed to construct the improvement.  Based on discussions with our Right-of-way Acquisition Section it appears that our Real Estate Management Division has already made contact with the owner’s representative for a “right-of-entry” to reconstruct driveway connections during construction. Construction is scheduled to begin December 2014 and the anticipated completion date is December of 2016.”  

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SCHEDULE 3.1.17

insurance claims

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Schedule VIII

Closed Property Release Conditions

Notwithstanding anything to the contrary set forth in this Agreement and the other Loan Documents, if Borrowers shall cease continuous operations of any Property as a hotel for any reason whatsoever (other than temporary cessation in connection with any alteration, repair, renovation or restoration thereof undertaken with the prior written consent of Lender) (each such Property that is subject to such cessation of hotel operations, a “Closed Property”), an Event of Default shall be deemed to have occurred unless, no later than twenty (20) days after hotel operations are suspended at such Closed Property, Borrowers shall satisfy all of the following conditions (collectively, the “Closed Property Release Conditions”):

(a)          After giving effect to the release of a Closed Property (each such release, a “Property Release”), no more than two (2) Properties shall have been released from the Lien of the Security Instruments and the other Loan Documents in accordance with these Closed Property Release Conditions;

(b)          Borrowers shall have delivered an Officer’s Certificate to Lender providing a certification that as of the date of such request, (i) no Default or Event of Default shall have occurred and be continuing or shall occur solely as a result of such Property Release, and (ii) Borrowers shall have made a good faith determination that continued operation of a hotel at the Property which is the subject of such proposed Property Release was no longer commercial;

(c)          Borrowers shall have submitted to Lender a written request for such Property Release at least ten (10) days prior to the proposed Property Release, which request shall specify the Closed Property (the “Property Release Date”);

(d)          no other Default or Event of Default shall have occurred and be continuing on the Property Release Date or shall occur solely as a result of such Property Release;

(e)          Borrowers shall have paid, or shall have arranged to be paid contemporaneously with the Property Release, to Lender, and Lender shall have received by wire transfer of immediately available federal funds, an amount equal to the sum of (i) one hundred fifteen percent (115%) of the Allocated Loan Amount in respect of such Closed Property (the “Release Price”), which shall be applied by Lender as a prepayment of the Outstanding Principal Balance in accordance with Section 2.4.1 of the Loan Agreement, plus (ii) all amounts required to be paid in accordance with Section 2.4.1 of the Loan Agreement;

(f)          Borrowers shall have submitted to Lender, not less than five (5) Business Days prior to the date of such release such releases, satisfactions, discharges and/or assignments for the Closed Property to be released for execution by Lender, which shall be in form and substance reasonably satisfactory to Lender and appropriate in the jurisdiction in which the Closed Property is located;

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(g)          If the Loan shall then be held by a REMIC Trust formed pursuant to a Securitization, Borrower shall have delivered an opinion from counsel, and in form and substance, in each case reasonably acceptable to Lender and acceptable to the Rating Agencies in their sole discretion stating, among other things, that any REMIC Trust formed pursuant to a Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code or be subject to tax as a result of such Property Release;

(h)          If the Loan shall then be held by a REMIC Trust formed pursuant to a Securitization, Borrower shall have delivered to Lender evidence reasonably satisfactory to Lender that Borrower and each SPC Party continues to be in compliance with each representation, warranty and covenant set forth in Sections 3.1.24 or 4.1.15 and Schedule III following such Property Release and if Borrower is transferring the Closed Property to a Restricted Party or an Affiliate of a Restricted Party and an Insolvency Opinion has been previously delivered in connection with the Loan, Borrower shall be required to deliver a new Insolvency Opinion;

(i)          after giving effect to the Property Release, the Debt Service Coverage Ratio for the remaining Properties shall not be less than the greater of (i) 1.54 to 1.00 and (ii) the Debt Service Coverage Ratio in effect immediately prior to the Property Release;

(j)          after giving effect to the Property Release, the Loan to Value Ratio for the remaining Property shall not be greater than the lesser of (i) sixty three percent (63)% and (ii) the Loan to Value Ratio in effect immediately prior to the Property Release;

(k)          Intermediate Manager and/or Property Manager and other parties to the applicable Intermediate Management Agreement and/or Property Management Agreement shall provide Lender with evidence reasonably satisfactory to Lender that the Closed Property will no longer be subject to any Intermediate Management Agreement or Property Management Agreement once such Property Release has been completed and that no Intermediate Manager or Property Manager will earn fees under any Intermediate Management Agreement or Property Management Agreement with respect to such Closed Property;

(l)          Borrower shall have delivered an Officer’s Certificate certifying that all of the requirements set forth in this Section 2.5 have been satisfied;

(m)          Borrower shall have executed and delivered to Lender such other certificates, documents or instruments as Lender may reasonably require in connection with the Property Release; and

(n)          Borrower shall have paid all of Lender’s reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees and disbursements) incurred in connection with the Property Release and the review and approval of the documents and information required to be delivered in connection therewith. In addition, Borrower shall have paid reasonable out-of-pocket costs and expenses of third parties relating to the release (including, without limitation, recording costs and the out-of-pocket costs and expenses incurred

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by, and all fees and charges of, the Rating Agencies) incurred in connection with the release of the Closed Property.

Upon the closing of such Property Release if all of the foregoing conditions set forth on this Schedule VIII with respect to such Property Release have been satisfied, Lender, at the sole cost and expense of Borrower, shall execute and deliver to Borrower the releases, satisfactions, discharges and/or assignments, as applicable and as reasonably requested by Borrower, of the Security Instruments , the Assignment of Leases and the other Loan Documents which solely relate to the Closed Property to be released. Upon the closing of any Property Release, all references herein or in any of the other Loan Documents to the term “Property” shall be deemed to exclude the Closed Property released.

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Schedule IX

Allocated Loan Amounts

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Schedule X

FRANCHISOR AND FRANCHISE AGREEMENTS

[See attached]

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Schedule XI

Property ManagerS

Crestline Hotels & Resorts, LLC, a Delaware limited liability company

Pillar Hotels and Resorts, L.P., a Delaware limited partnership

McKibbon Hotel Management, Inc., a Florida corporation

Hampton Inns Management LLC, a Delaware limited liability company

Homewood Suites Management LLC, a Delaware limited liability company

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SCHEDULE XII

REAs

Courtyard San Diego – Carlsbad, CA

Declaration of Covenants, Conditions, and Restrictions Carlsbad Airport Centre San Diego, California dated September 4, 1986, recorded September 12, 1986, as File No. 86-401456 in the Official Records of San Diego County, California; as amended by First Amendment to Declaration of Covenants, Conditions, and Restrictions Carlsbad Airport Centre San Diego, California dated November 1986, recorded January 28, 1987, as File No. 87-048040 in said Official Records; as further amended by Declaration of Annexation of Phase II of Carlsbad Airport Centre Pursuant to Declaration of Covenants, Conditions, and Restrictions Carlsbad Airport Centre San Diego, California dated October 25, 1990, recorded October 30, 1990, as File No. 90-589282 in said Official Records.

Hilton Garden Inn Rio Rancho – Rio Rancho, NM

Declaration of Protective Covenants and Restrictions for Gateway North dated June 21, 1994, filed for record June 21, 1994, in Miscellaneous Book 313, page 795, as Document No. 43919, records of Sandoval County, New Mexico.

TownePlace Suites Savannah Midtown – Savannah, GA

Declaration of Easements, Covenants, and Restrictions for Abercorn Village (“ECR”) dated August 1, 1998, filed for record August 6, 1998, in Deed Book 195N, page 592, in the Office of the Clerk of Superior Court in Chatham County, Georgia.

Hampton Inn Austin North – Austin, TX

Declaration of Covenants, Conditions and Restrictions dated June 9, 1986, and recorded July 24, 1986, in Volume 9798, Page 962, of the Real Property Records of Travis County, Texas.

Hampton Inn Indianapolis Castleton – Indianapolis, IN

Declaration of Easements, Covenants and Restrictions dated December 10, 1986 and recorded December 12, 1986 as Instrument No. 86-128685 of the Marion County Records; as amended by that First Amendment to Declaration of Easements, Covenants and Restrictions dated February 20, 1990 and recorded March 9, 1990 as Instrument No. 90-25410 of the Marion County Records.

Hilton Garden Inn Louisville – Louisville, KY

Declaration of Covenants, Conditions and Restrictions, Blankenbaker Crossings, dated January 1, 1990, and recorded in Book 5997, Page 664; as amended by Amended Declaration of Covenants, Conditions and Restrictions recorded in Book 6057, Page 350; as amended by a Supplemental Declaration and Declaration of Annexation recorded in Book 6057, Page 355; as amended by Amended Declaration of Covenants, Conditions and Restrictions recorded in Book 6325, Page 277; as amended by Amendment to Declaration of Covenants, Conditions and Restrictions recorded in Book 6654, Page 227; as further amended by Declarations of Annexation and Amendment to Declaration of Covenants, Conditions and Restrictions recorded in Book 6735, Page 259 and Book 6742, Page 519; as further amended by the following Declarations of Annexation to Declaration of Covenants, Conditions and Restrictions recorded in

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Book 6017, Page 109; Book 6043, Page 653; Book 6049, Page 20; Book 6052, Page 426; Book 6057, Page 366; Book 6083, Page 51; Book 6174, Page 285; Book 6294, Page 926; Book 6325, Page 272; Book 6333, Page 6; Book 6349, Page 549; Book 6350, Page 259; Book 6358, Page 974; Book 6433, Page 979; Book 6443, Page 482; Book 6446, Page 495; Book 6468, Page 537; Book 6483, Page 155; Book 6490, Page 19; Book 6500, Page 499; Book 6524, Page 751; Book 6577, Page 385; Book 6579, Page 358; Book 6618, Page 543; Book 6641, Page 535; Book 6645, Page 633; Book 6660, Page 600; Book 6677, Page 288; Book 6677, Page 869; Book 6678, Page 140; Book 6683, Page 496; Book 6697, Page 871l Book 6705, Page 68; Book 6729, Page 104; Book 6746, Page 508; Book 6775, Page 359; Book 6775, Page 954; Book 6893, Page 704, all in the Office of the Clerk of Court of Jefferson County, Kentucky.

Homewood Suites Stratford – Stratford, CT

Agreement by and between Stratford Restorations, Inc., a Connecticut corporation, and Stratford Development, LLC, a Connecticut limited liability company dated September 25, 1997, recorded in Book 1315, Page 342 of the Town of Stratford Land Records.

Hampton Inn Milford – Milford, CT

Revised Easement Agreement and Release dated June 29, 1987, recorded as Volume 1589, Page 20 of the Milford Land Records.

Hampton Inn Urbana (Champaign) – Urbana, IL

Declaration of Reciprocal Easement and Maintenance Agreement dated October 9, 1995, recorded October 11, 195 in the Champaign County Recorder.

Hampton Inn, 8900 Universal Blvd, Orlando, FL:

DECLARATION OF COVENANTS AND RESTRICTIONS FOR PLAZA INTERNATIONAL UNIT ELEVEN BY ORLANDO PLAZA PARTNERS, A FLORIDA GENERAL PARTNERSHIP, RECORDED IN OFFICIAL RECORDS BOOK 4271, PAGE 2285, OF THE PUBLIC RECORDS OF ORANGE COUNTY, FLORIDA.

DECLARATION OF EASEMENT FOR ACCESS BY ORLANDO PLAZA PARTNERS, A FLORIDA GENERAL PARTNERSHIP, TO ORLANDO CONVENTION PARTNERS, L.P., A TENNESSEE LIMITED PARTNERSHIP, RECORDED IN OFFICIAL RECORDS BOOK 5317, PAGE 2147, AND FIRST AMENDMENT TO DECLARATION OF EASEMENT FOR ACCESS RECORDED IN OFFICIAL RECORDS BOOK 5436, PAGE 782, OF THE PUBLIC RECORDS OF ORANGE COUNTY, FLORIDA.

Homewood Suites, 8745 International Drive, Orlando, FL

CROSS EASEMENT AGREEMENT EXECUTED BY AND BETWEEN ORLANDO PLAZA PARTNERS, A FLORIDA GENERAL PARTNERSHIP, AND E.I.P. ORLANDO, L.P., A TENNESSEE LIMITED PARTNERSHIP, RECORDED AUGUST 28, 1997, IN OFFICIAL RECORDS BOOK 5317, PAGE 2590, PUBLIC RECORDS OF ORANGE COUNTY, FLORIDA.

S-XII-2

DECLARATION OF EASEMENT FOR ACCESS EXECUTED BY ORLANDO PLAZA PARTNERS, A FLORIDA GENERAL PARTNERSHIP, TO E.I.P. ORLANDO, L.P., A TENNESSEE LIMITED PARTNERSHIP, RECORDED AUGUST 28, 1997, IN OFFICIAL RECORDS BOOK 5317, PAGE 2580, PUBLIC RECORDS OF ORANGE COUNTY, FLORIDA.

Residence Inn, 1310 Airport Road, Jacksonville, FL:

DECLARATION OF COVENANTS, CONDITIONS, RESTRICTIONS AND EASEMENTS EXECUTED BY WILMA/SKYLAND JOINT VENTURE, LTD., A GA LIMITED PARTNERSHIP, FILED AUGUST 2, 1990, IN OFFICIAL RECORDS BOOK 6941, PAGE 0427, AS AMENDED BY FIRST SUPPLEMENT RECORDED IN BOOK 6999, PAGE 2023; SECOND SUPPLEMENT RECORDED IN BOOK 7385, PAGE 1290; THIRD SUPPLEMENT AND AMENDMENT RECORDED IN BOOK 7631, PAGE 1706; FOURTH SUPPLEMENT AND AMENDMENT RECORDED IN BOOK 7975, PAGE 558; FIFTH SUPPLEMENT RECORDED IN BOOK 8123, PAGE 2296; SIXTH SUPPLEMENT RECORDED IN BOOK 8467, PAGE 147; AMENDED SIXTH SUPPLEMENT RECORDED IN BOOK 8530, PAGE 1595; SEVENTH SUPPLEMENT RECORDED IN BOOK 8536, PAGE 162; EIGHTH SUPPLEMENT AND AMENDMENT RECORDED IN BOOK 8712, PAGE 1305; NINTH SUPPLEMENT AND AMENDMENT RECORDED IN BOOK 8821, PAGE 2108; TENTH SUPPLEMENT AND AMENDMENT RECORDED IN BOOK 8832, PAGE 1630; ELEVENTH SUPPLEMENT AND AMENDMENT RECORDED IN BOOK 8861, PAGE 2108; TWELFTH SUPPLEMENT AND AMENDMENT RECORDED IN BOOK 8861, PAGE 2470; THIRTEENTH SUPPLEMENT AND AMENDMENT RECORDED IN BOOK 8873, PAGE 213; FOURTEENTH SUPPLEMENT AND AMENDMENT RECORDED IN BOOK 9120, PAGE 1311; FIFTEENTH SUPPLEMENT AND AMENDMENT RECORDED IN BOOK 9573, PAGE 138; SIXTEENTH SUPPLEMENT AND AMENDMENT RECORDED IN BOOK 9848, PAGE 1282; SEVENTEENTH SUPPLEMENT AND AMENDMENT RECORDED IN BOOK 9909, PAGE 1715; EIGHTEENTH SUPPLEMENT AND AMENDMENT RECORDED IN BOOK 10083, PAGE 1413; AND NINETEENTH SUPPLEMENT AND AMENDMENT RECORDED IN BOOK 10984, PAGE 815, PUBLIC RECORDS OF DUVAL COUNTY, FLORIDA.

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SCHEDULE XIII

OPERATING LEASES

LEASE	LESSOR  (FEE OWNER)	LESSEE (OPERATING LESSEE)	PROPERTY	ADDRESS	CITY / STATE / ZIP
Lease Agreement, dated as of February 27, 2015	ARC Hospitality Portfolio II Owner, LLC	ARC Hospitality Portfolio II TRS, LLC	Hampton Inn Orlando International Drive/Convention Center	8900 Universal Boulevard	Orlando, FL  32819
Lease Agreement, dated as of February 27, 2015	ARC Hospitality Portfolio II Owner, LLC	ARC Hospitality Portfolio II TRS, LLC	Homewood Suites by Hilton Orlando – International Drive/Convention	8745 International Drive	Orlando, FL  32819
Lease Agreement, dated as of February 27, 2015	ARC Hospitality Portfolio II Owner, LLC	ARC Hospitality Portfolio II TRS, LLC	Courtyard Dalton	411 Holiday Drive	Dalton, GA  30720
Lease Agreement, dated as of February 27, 2015	ARC Hospitality Portfolio II Owner, LLC	ARC Hospitality Portfolio II TRS, LLC	Hilton Garden Inn Albuquerque – North/Rio Rancho	1711 Rio Rancho Boulevard	Albuquerque, NM  87124
Lease Agreement, dated as of February 27, 2015	ARC Hospitality Portfolio II Owner, LLC	ARC Hospitality Portfolio II HIL TRS, LLC	Hampton Inn Milford	129 Plains Road	Milford, CT  06460
Lease Agreement, dated as of February 27, 2015	ARC Hospitality Portfolio II Owner, LLC	ARC Hospitality Portfolio II HIL TRS, LLC	Homewood Suites by Hilton Augusta	1049 Stevens Creek Road	Augusta, GA  30907
Lease Agreement, dated as of February 27, 2015	ARC Hospitality Portfolio II Owner, LLC	ARC Hospitality Portfolio II HIL TRS, LLC	Hampton Inn Chicago/Naperville	1087 East Diehl Road	Naperville, IL  60563
Lease Agreement, dated as of February 27, 2015	ARC Hospitality Portfolio II Owner, LLC	ARC Hospitality Portfolio II HIL TRS, LLC	Hampton Inn Indianapolis – NE/Castleton	6817 East 82nd Street	Indianapolis, IN  46250
Lease Agreement, dated as of February 27, 2015	ARC Hospitality Portfolio II Owner, LLC	ARC Hospitality Portfolio II HIL TRS, LLC	Hampton Inn Knoxville – Airport	148 International Avenue	Alcoa, TN  37701
Lease Agreement, dated as of February 27, 2015	ARC Hospitality Portfolio II Owner, LLC	ARC Hospitality Portfolio II HIL TRS, LLC	Homewood Suites by Hilton Seattle Downtown	206 Western Avenue West	Seattle, WA  98119
Lease Agreement, dated as of February 27, 2015	ARC Hospitality Portfolio II Owner, LLC	ARC Hospitality Portfolio II MISC TRS, LLC	TownePlace Suites Savannah Midtown	11309 Abercorn Street	Savannah, GA  31419
Lease Agreement, dated as of February 27, 2015	ARC Hospitality Portfolio II Owner, LLC	ARC Hospitality Portfolio II TRS, LLC	Hilton Garden Inn Louisville East	1530 Alliant Avenue	Louisville, KY  40299
Lease Agreement, dated as of February 27, 2015	ARC Hospitality Portfolio II Owner, LLC	ARC Hospitality Portfolio II MISC TRS, LLC	Residence Inn Jacksonville Airport	1310 Airport Road	Jacksonville, FL  32218

S-XIII-1

LEASE	LESSOR  (FEE OWNER)	LESSEE (OPERATING LESSEE)	PROPERTY	ADDRESS	CITY / STATE / ZIP
Lease Agreement, dated as of February 27, 2015	ARC Hospitality Portfolio II Owner, LLC	ARC Hospitality Portfolio II MISC TRS, LLC	Hampton Inn Champaign/Urbana	1200 West University Avenue	Urbana, IL  61801
Lease Agreement, dated as of February 27, 2015	ARC Hospitality Portfolio II Owner, LLC	ARC Hospitality Portfolio II MISC TRS, LLC	Hampton Inn East Lansing	2500 Coolidge Road	East Lansing, MI  48823
Lease Agreement, dated as of February 27, 2015	ARC Hospitality Portfolio II NTC Owner, LP	ARC Hospitality Portfolio II NTC TRS, LP	SpringHill Suites Asheville	Two Buckstone Place	Asheville, NC  28805
Lease Agreement, dated as of February 27, 2015	ARC Hospitality Portfolio II NTC Owner, LP	ARC Hospitality Portfolio II NTC TRS, LP	Courtyard San Diego Carlsbad/McClellan-Palomar Airport	5835 Owens Avenue	Carlsbad, CA  92008
Lease Agreement, dated as of February 27, 2015	ARC Hospitality Portfolio II NTC Owner, LP	ARC Hospitality Portfolio II NTC TRS, LP	Courtyard Houston I-10 West/Energy Corridor	12401 Katy Freeway	Houston, TX  77079
Lease Agreement, dated as of February 27, 2015	ARC Hospitality Portfolio II NTC Owner, LP	ARC Hospitality Portfolio II NTC TRS, LP	Hampton Inn Austin – North @ I-35 & Hwy 183	7619 I-35 North	Austin, TX  78752
Lease Agreement, dated as of February 27, 2015	ARC Hospitality Portfolio II NTC Owner, LP	ARC Hospitality Portfolio II NTC HIL, TRS, LP	Hampton Inn College Station	320 Texas Avenue South	College Station, TX 77840
Lease Agreement, dated as of February 27, 2015	ARC Hospitality Stratford, LLC	ARC Hospitality TRS Stratford, LLC	Stratford Homewood	6905 Main Street	Stratford, CT 06614

S-XIII-2

SCHEDULE XIV

PIP RESERVE FUNDING SCHEDULE

DATE	AMOUNT OF REQUIRED DEPOSIT
March 31, 2015	$	5,000,000
June 30, 2015	$	2,500,000
September 30, 2015	$	2,500,000
December 31, 2015	$	5,000,000
March 31, 2016	$	2,500,000
June 30, 2016	$	2,500,000

Total Deposits: $20,000,000

S-XIV-1

SCHEDULE XV

Reserved

S-XV-1

SCHEDULE XVI

O&M Plan

(Courtyard Houston (I-10) 12401 Katy Freeway, Houston, Texas 77079)

S-XVI-1

SCHEDULE XVIi

Scheduled managers

1. Aimbridge

2. Concord Hospitality

3. Crescent

4. First Hospitality

5. Hersha

6. Highgate

7. Hilton

8. Intercontinental Hotel Group

9. Interstate

10. McKibbon Hotels

11. Noble

12. Pyramid

13. Pillar Hotels & Resorts

14. Sage

15. Westmont

16. White Lodging

17. Island Hospitality

18. Huntington

19. Lingate

20. Musselman

21. Marriott

22. Hyatt

23. HEI

S-XVII-1

SCHEDULE XVIiI

Assignment of Franchise Agreements

1. Comfort Letter, dated as of the date hereof, among Lender, ARC Hospitality Portfolio II MISC TRS, LLC, as franchisee, ARC Hospitality Portfolio II Owner, LLC, as fee owner, and Marriott International, Inc., as franchisor, relating to TownePlace Suites by Marriott, 11309 Abercorn Street, Savannah, GA 31419

2. Comfort Letter, dated as of the date hereof, among Lender, ARC Hospitality Portfolio II MISC TRS, LLC, as franchisee, ARC Hospitality Portfolio II Owner, LLC, as fee owner, and Marriott International, Inc., as franchisor, relating to Residence Inn by Marriott, 1310 Airport Road, Jacksonville, FL 32218

3. Comfort Letter, dated as of the date hereof, among Lender, ARC Hospitality Portfolio II NTC TRS, LP, as franchisee, ARC Hospitality Portfolio II NTC Owner, LP, as fee owner, and Marriott International, Inc., as franchisor, relating to Courtyard by Marriott, 12401 Katy Freeway, Houston, TX 77079

4. Comfort Letter, dated as of the date hereof, among Lender, ARC Hospitality Portfolio II NTC TRS, LP, as franchisee, ARC Hospitality Portfolio II NTC Owner, LP, as owner, and MIF, L.L.C., as franchisor, relating to Courtyard by Marriott, 5835 Owens Avenue, Carlsbad, CA 92008

5. Comfort Letter, dated as of the date hereof, among Lender, ARC Hospitality Portfolio II TRS, LLC, as franchisee, ARC Hospitality Portfolio II Owner, LLC, as fee owner, and Marriott International, Inc., as franchisor, relating to Courtyard by Marriott, 785 College Drive, Dalton, GA 30720

6. Comfort Letter, dated as of the date hereof, among Lender, ARC Hospitality Portfolio II NTC TRS, LP, as franchisee, ARC Hospitality Portfolio II NTC Owner, LP, as fee owner, and Marriott International, Inc., as franchisor, relating to SpringHill Suites by Marriott, Two Buckstone Place, Asheville, NC 28805

7. Comfort Letter, dated as of the date hereof, among Lender, ARC Hospitality Portfolio II TRS, LLC, ARC Hospitality Portfolio II HIL TRS, LLC, ARC Hospitality Portfolio II MISC TRS, LLC; ARC Hospitality Portfolio II NTC TRS, LP, as franchisees, and Hilton Garden Inns Franchise LLC; Hampton Inns Franchise LLC, Homewood Suites Franchise LLC, as franchisors, relating to the Hilton Brand Managed Properties

S-XVIII-1

EXHIBIT A

FORM OF SMITH TRAVEL RESEARCH REPORT

A-1

EXHIBIT B

INTENTIONALLY OMITTED

B-1

EXHIBIT C

FORM OF CREDIT CARD BANK PAYMENT DIRECTION LETTER

[BORROWER LETTERHEAD]

[_____________]. 201[_]

[Addressee]
[_______________]
[_______________]
[_______________]

Re: Payment Direction Letter for [BORROWER]
[PROPERTY NAME]

Dear [______]:

[BORROWER] (“Owner”), the owner of the above captioned property (the “Property”), has mortgaged the Property to [LENDER] (together with its successors and assigns, “Lender”) and has agreed that all receipts received for the Property will be paid directly to a bank selected by Lender. Therefore, from and after the date hereof (until you are otherwise notified as provided below), please remit all credit card receipts cleared by you and due to the Owner [under that certain [REFERENCE AGREEMENT], dated [___], [____] (the “Agreement”) between the Owner and you,] by the ACH system or wire transfer to the following account:

Bank Name
ABA# [_______________]
Attn:   [_______________]
Fax:    [_______________]
Account   [_______________]

These payment instructions cannot be withdrawn or modified without the prior written consent of Lender or its agent (“Servicer”), or pursuant to a joint written instruction from Owner and Lender or its Servicer. Until you receive written instructions from Lender or Servicer, continue to send all payments due under the Agreement as directed above. All such payments due under the Agreement must be remitted no later than the day on which such amounts are due under the Agreement.

C-1

If you have any questions concerning this letter, please contact the persons identified for notice purposes in the Agreement. We appreciate your cooperation in this matter.

OWNER:

[______________________________]

By:

Name:

Title:

C-2

EXHIBIT D

FORM OF CREDIT CARD COMPANY PAYMENT DIRECTION LETTER

[BORROWER LETTERHEAD]

[_____________]. 201[_]

[Addressee]
[_______________]
[_______________]
[_______________]

Re: Payment Direction Letter for [BORROWER]
[PROPERTY NAME]

Dear [______]:

[BORROWER] (“Owner”), the owner of the above captioned property (the “Property”), has mortgaged the Property to [LENDER] (together with its successors and assigns, “Lender”) and has agreed that all receipts received for the Property will be paid directly to a bank selected by Lender. Therefore, from and after the date hereof (until you are otherwise notified as provided below), please remit all payments due to the [Owner] [Lessee] [Manager] under that certain [REFERENCE AGREEMENT], dated [___], [____] (the “Agreement”) between the [Owner] [Lessee] [Manager] and you, as follows:

Bank Name
ABA# [_______________]
Attn:  [_______________]
Fax:   [_______________]
Account   [_______________]

These payment instructions cannot be withdrawn or modified without the prior written consent of Lender or its agent (“Servicer”), or pursuant to a joint written instruction from Owner and Lender or its Servicer. Until you receive written instructions from Lender or Servicer, continue to send all payments due under the Agreement as directed above. All such payments due under the Agreement must be remitted no later than the day on which such amounts are due under the Agreement.

D-1

If you have any questions concerning this letter, please contact the persons identified for notice purposes in the Agreement. We appreciate your cooperation in this matter.

OWNER:

[______________________________]

By:

Name:

Title:

D-2

EXHIBIT P-1

PIP Plans

Sch. 3.1.31-1

EXHIBIT P-2

PIP Budgets

Sch. 3.1.31-2

EXHIBIT P-3

PIP Timeline

Sch. 3.1.31-3

EX-10.28

Exhibit 10.28

BAD BOY GUARANTY

This BAD BOY GUARANTY (this “Guaranty”) is executed as of February 27, 2015, by American Realty Capital Hospitality Operating Partnership, L.P., a Delaware limited partnership, AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC., a Maryland corporation, having an office at c/o American Realty Capital, 405 Park Avenue, New York, New York 10022, Nicholas S. Schorsch, an individual, William M. Kahane, an individual, Edward M. Weil, Jr., an individual, and Peter M. Budko, an individual (each of the foregoing, a “Guarantor”, and collectively, “Guarantors”), for the benefit of W2007 EQUITY INNS SENIOR MEZZ, LLC, a Delaware limited liability company, having an office at c/o Goldman Sachs Realty Management, L.P., 6011 Connection Drive, Irving, Texas 75039 (together with its successors and/or assigns, the “Class A Member”).

WITNESSETH:

WHEREAS, the Class A Member is prepared to make an investment (the “Investment”) in ARC Hospitality Portfolio I Holdco, LLC, a Delaware limited liability company (the “Company”), in the amount of $347,298,021.00 as described in the Amended and Restated Limited Liability Company Agreement of the Company, of even date herewith, among the Class A Member, American Realty Capital Hospitality Portfolio Member LP, a Delaware limited partnership (the “Class B Member”), and William G. Popeo, as special member (as the same may be amended, modified or supplemented from time to time, the “Operating Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Operating Agreement;

WHEREAS, each Guarantor acknowledges receipt and approval of copies of the Operating Agreement and the other Transaction Documents;

WHEREAS, each Guarantor acknowledges that it owns, either directly or indirectly, a beneficial interest in the Class B Member and, as a result of such beneficial interest, will receive substantial economic and other benefits from the Class A Member making the Investment in the Company; and

WHEREAS, the Class A Member is unwilling to make the Investment or to enter into the Operating Agreement unless Guarantors agree to provide the indemnification, representations, warranties, covenants and other matters described in this Guaranty for the benefit of the Class A Member.

NOW, THEREFORE, as an inducement to the Class A Member to make the Investment, enter into the Operating Agreement and become a Member of the Company, and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:

ARTICLE 1
NATURE AND SCOPE OF GUARANTY

Section 1.1          Guaranty of Obligation.

(a)          Subject to Section 1.10 hereof, each Guarantor hereby irrevocably and unconditionally guarantees to the Class A Member and its successors and assigns the payment and performance of the Guaranteed Obligations (as defined below) as and when the same shall be due and payable, whether by lapse of time, by acceleration of maturity or otherwise. Each Guarantor hereby irrevocably and unconditionally covenants and agrees that it is liable for the Guaranteed Obligations as a primary obligor.

(b)          As used herein, the term “Guaranteed Obligations” means (i) the Recourse Liabilities and (ii) from and after the date that any Springing Recourse Event occurs, payment of the Redemption Price.

(c)          For purposes hereof, the “Recourse Liabilities” shall mean any actual loss, damage, out-of-pocket cost or expense, liability, claim or other obligation incurred by the Class A Member (including reasonable outside attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:

(i)          fraud or intentional misrepresentation committed by the Company, the Class B Member, any Guarantor or any of their respective Affiliates in connection with the Investment;

(ii)         wrongful removal of personal property from the Properties after a Changeover Event by the Company, the Class B Member, any Guarantor or any of their respective Affiliates, unless replaced with personal property of substantially the same or greater utility and of the same or greater value;

(iii)        any intentional physical waste at any Property committed by the Company, the Class B Member, any Guarantor or any of their respective Affiliates;

(iv)        the misappropriation by the Company, the Class B Member, any Guarantor or any of their respective Affiliates of any proceeds (including proceeds of Capital Contributions, Capital Event Proceeds and Protective Capital) or other funds (including any proceeds paid by reason of any Casualty to any Property and any awards in connection with the Condemnation of any Property), revenues, rents, income, security deposits or other amounts;

(v)         failure to obtain and maintain the fully paid for insurance policies in accordance with Section 5.7 of the Operating Agreement to the extent that adequate funds were available to the Company and its Subsidiaries from the income of the Properties for the payment of the premiums thereof;

(vi)        if the Class B Member, the Company or any of the Subsidiaries fails to maintain its status as a single purpose entity in accordance with the terms of Section 5.15(a) of the Operating Agreement and such failure does not result in the substantive

-2-

consolidation of the assets and liabilities of the Class B Member, the Company or any of the Subsidiaries with any other Person as a result of such breach; and/or

(vii)       the modification of any ground lease affecting any Property if such modification is prohibited under the Operating Agreement or any of the other Transaction Documents and such modification has a material adverse effect on the related Property or the leasehold interest therein (including the value or operation thereof) or the Class A Member’s ability to exercise its rights and remedies under the Transaction Documents.

(d)          For purposes hereof, each of the following shall constitute a Springing Recourse Event:

(i)          if the Company fails to obtain the Class A Member’s prior written consent to any financing for borrowed money, whether secured or unsecured, in violation of the terms of the Operating Agreement or any of the other Transaction Documents;

(ii)         if the Class B Member, the Company or any of the Subsidiaries fails to obtain the Class A Member’s prior written consent to any voluntary mortgage, deed of trust, security deed, security agreement or similar grant by the Company or any of its Subsidiaries of a voluntary Lien upon any Property, or any voluntary granting of a security interest in, voluntary pledge of or other voluntary Lien upon any direct or indirect equity interest in the Company or any of the Subsidiaries, in each case, as security for any obligations or liabilities that is not permitted under the Operating Agreement or any of the other Transaction Documents;

(iii)        if the Class B Member, the Company or any of the Subsidiaries fails to obtain the Class A Member’s prior written consent to any voluntary transfer of any Property or any of the equity interests in the Subsidiaries that is not permitted under the Operating Agreement or any of the other Transaction Documents;

(iv)        if the Class B Member ceases to be Controlled, directly or indirectly, by ARC OP, or if ARC OP ceases to be Controlled, directly or indirectly by the REIT, or if the REIT ceases to be Controlled, directly or indirectly, by AR Capital, LLC;

(v)         the Class B Member, the Company or any of the Subsidiaries files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law;

(vi)        the filing of an involuntary petition against the Class B Member, the Company or any of the Subsidiaries under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which the Class B Member, the Company, any Subsidiary or any of their respective Affiliates colludes with or otherwise assists such Person, and/or the Class B Member, the Company, any Subsidiary or any of their respective Affiliates solicits or causes to be solicited petitioning creditors for any involuntary petition against the Class B Member, the Company or any of the Subsidiaries by any Person;

-3-

(vii)       if the Class B Member, the Company or any of the Subsidiaries files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law;

(viii)      if the Class B Member, the Company, any Subsidiary or any of their respective Affiliates consents to, or joins in, an application for the appointment of a custodian, receiver, trustee or examiner for the Class B Member, the Company or any of the Subsidiaries and/or any portion of any Property;

(ix)         if the Class B Member, the Company or any of the Subsidiaries makes an assignment for the benefit of creditors or admits, in any legal proceeding, its insolvency or inability to pay its debts as they become due; or

(x)          if the Class B Member, the Company or any of the Subsidiaries fails to maintain its status as a single purpose entity in accordance with the terms of Section 5.15(a) of the Operating Agreement and such failure results in the substantive consolidation of the assets and liabilities of the Class B Member, the Company or any of the Subsidiaries with any other Person in a bankruptcy or similar proceeding under the Bankruptcy Code or any other federal or state bankruptcy or insolvency law.

(e)          Notwithstanding anything to the contrary in this Guaranty or in any of the other Transaction Documents, then Class A Member shall not be deemed to have waived any right which the Class A Member may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Redemption Price or to require that all collateral shall continue to secure all of the obligations owed to the Class A Member in accordance with the Transaction Documents.

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

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

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

Section 1.5           No Duty To Pursue Others. It shall not be necessary for the Class A Member (and each Guarantor hereby waives any rights which such Guarantor may have to require the Class A Member), in order to enforce the obligations of Guarantors hereunder, first to (i) institute suit or exhaust its remedies against the Company or others liable for the Guaranteed Obligations or any other Person, including, without limitation, any general partner of any of the foregoing which is a partnership, (ii) declare a Changeover Event, (iii) enforce the Class A Member’s rights against any collateral which shall ever have been given to secure the obligations owed to the Class A Member under the Operating Agreement or the other Transaction Documents, (iv) enforce the Class A Member’s rights against any other guarantors of the Guaranteed Obligations, including, without limitation, any general partner of any of the foregoing which is a partnership, (v) join the Class B Member, the Company or any others liable on the Guaranteed Obligations in any action seeking to enforce this Guaranty, (vi) exhaust any remedies available to the Class A Member under the Transaction Documents, or (vii) resort to any other means of obtaining payment of the Guaranteed Obligations, including, to the extent California law is deemed to apply notwithstanding the choice of law set forth herein, any of the foregoing which may be available to the Class A Member by virtue of California Civil Code Sections 2845, 2849, and 2850. The Class A Member shall not be required to mitigate damages or take any other action to reduce, collect or enforce the Guaranteed Obligations.

Section 1.6           Waivers. Each Guarantor acknowledges receipt of copies of the Operating Agreement and the other Transaction Documents and hereby waives notice of (i) any loans or advances (including advances of Protective Capital) made by the Class A Member to the Company, (ii) acceptance of this Guaranty, (iii) any amendment of any Transaction Document or extension of the Mandatory Redemption Date, (iv) the occurrence of any breach by the Class B Member or the Company under the Operating Agreement or the other Transaction Documents or the declaration of a Changeover Event, (v) the Class A Member’s transfer or disposition of the Guaranteed Obligations, or any part thereof, (vi) protest, proof of non-payment or default by the Class B Member or the Company, or (vii) any other action at any time taken or omitted by the Class A Member and, generally, all demands and notices of every kind in connection with this Guaranty, the Transaction Documents, any documents or agreements evidencing, securing or relating to any of the Guaranteed Obligations and/or the obligations hereby guaranteed.

Section 1.7           Payment of Expenses. In the event that any Guarantor shall breach or fail to timely perform any provisions of this Guaranty, Guarantors shall, immediately upon demand by the Class A Member, pay the Class A Member all reasonable out-of-pocket costs and

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expenses (including court costs and reasonable attorneys’ fees) incurred by the Class A Member in the enforcement hereof or the preservation of the Class A Member’s rights hereunder. The covenant contained in this Section shall survive the payment and performance of the Guaranteed Obligations.

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

Section 1.9          Waiver and Postponement of Subrogation, Reimbursement and Contribution. Notwithstanding anything to the contrary contained in this Guaranty, each Guarantor hereby unconditionally and irrevocably agrees to postpone the exercise of and, until the Redemption Price has been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty), does hereby irrevocably waive and defer any and all rights it may now or hereafter have under any agreement, at law or in equity (including, without limitation, any law subrogating Guarantors’ rights to the rights of the Class A Member), to assert any claim against or seek contribution, indemnification or any other form of reimbursement from the Company or any of its Subsidiaries or any other party liable to the Class A Member for the payment of any or all of the Guaranteed Obligations for any payment made by Guarantors under or in connection with this Guaranty or otherwise; provided that, for clarity, such postponement and waiver shall only be in effect until the Redemption Price has been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty).

Section 1.10        Limitations on Liability of Guarantors.

(a)          As used herein, a “Guarantor Affiliate” shall mean any Guarantor, the Class B Member and/or any other Person that either (or both) (a) is in Control of, is Controlled by or is under common Control with (i) any Guarantor or (ii) any general partner or managing member of, or other Person or Persons Controlling, any Guarantor (each a “Clause (a) Person”), or (b) is either (1) a Person that owns directly or indirectly thirty-five percent (35%) or more of the direct or indirect equity interests in any Guarantor or any other Clause (a) Person, or (2) a Person with respect to which either (or a combination) of the Guarantors directly or indirectly owns thirty-five percent (35%) or more of the direct or indirect equity interests in such Person, or (3) a Person with respect to which any combination of Guarantors and Clause (a) Persons own, directly or indirectly, fifty-one percent (51%) or more of the direct or indirect voting equity interests in such Person. In addition to, and without limiting, the foregoing, if a direct or indirect interest in a loan secured by direct or indirect interests in the Company or any of its Subsidiaries is held by a Guarantor Affiliate, the related lender will be deemed a Guarantor Affiliate unless such Guarantor Affiliate is a Disabled Participant (as defined below) and one or more other holders of substantial interests in such loan that are not Guarantor Affiliates control the administration of such loan and the enforcement of the rights and remedies of such lender. A

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Guarantor Affiliate is a “Disabled Participant” with respect to a loan if it has no right to exercise any voting or other control rights with respect to such loan (other than the right to approve amendments to the material economic terms of such loan).

(b)          Notwithstanding anything to the contrary herein or in the other Transaction Documents, in the event of the declaration of a Changeover Event, then Guarantors shall not have any liability hereunder for any Losses arising from any circumstance, condition, action or event first occurring after the date of the declaration of a Changeover Event and not caused by the acts of either of the Guarantors or any other Guarantor Affiliate; provided that (i) Guarantors shall remain liable hereunder that arise from any action or event prior to the date of the declaration of a Changeover Event and (ii) if, following the declaration of a Changeover Event, an arbitration panel appointed pursuant to Section 12.10 of the Operating Agreement determines that such Changeover Event has not occurred pursuant to Section 3.5 of the Operating Agreement, then the Guarantors shall continue to be fully liable for all of its obligations hereunder (other than any liabilities caused solely by the actions of the Class A Member taken on behalf of the Company or any of its Subsidiaries following such declaration of a Changeover Event).

(c)          At any time prior to the declaration of a Changeover Event, Guarantors shall be entitled to request and Class A Member agrees to grant the release of any Guarantor from its obligations hereunder so long as, following such release, the remaining Guarantor(s) collectively and not individually continue(s) to satisfy the Net Worth Threshold and Liquid Assets Threshold requirements set forth in Section 5.2 hereof. In connection with any release of a Guarantor pursuant to this Section 1.10(c), the Class A Member shall execute and deliver a release of such Guarantor from all liability in respect of the Guaranteed Obligations.

(d)          Subject to the reinstatement of the Guarantors’ obligations hereunder pursuant to Section 6.14 hereof, this Guaranty shall terminate and be of no further force and effect upon the date of the payment in full of the Redemption Price; provided, however, that the Guaranteed Obligations shall survive such termination with respect to any and all such Guaranteed Obligations accruing prior to or arising out of or related to any circumstances, conditions, actions or events occurring or arising prior to the date of such repayment and satisfaction, even to the extent the applicable liability, loss, cost or expense does not occur or the applicable circumstance, condition, action or event is not discovered until after such date.

ARTICLE 2
EVENTS AND CIRCUMSTANCES NOT REDUCING
OR DISCHARGING GUARANTORS’ OBLIGATIONS

Subject to Section 1.10 hereof, to the extent permitted by applicable law, each Guarantor hereby consents and agrees to each of the following and agrees that such Guarantor’s obligations under this Guaranty shall not be released, diminished, impaired, reduced or adversely affected by any of the following and waives any common law, equitable, statutory or other rights (including, without limitation, rights to notice) which such Guarantor might otherwise have as a result of or in connection with any of the following:

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Section 2.1           Modifications. Any renewal, extension, increase, modification, alteration or rearrangement of all or any part of the Guaranteed Obligations, the Operating Agreement, the Transaction Documents or any other document, instrument, contract or understanding between Class B Member, any Guarantor or the Company and the Class A Member or any other parties pertaining to the Guaranteed Obligations or any failure of the Class A Member to notify Guarantors of any such action.

Section 2.2           Adjustment. Any adjustment, indulgence, forbearance or compromise that might be granted or given by the Class A Member to the Class B Member, the Company or any Guarantor.

Section 2.3           Condition of Relevant Entities. The insolvency, bankruptcy, arrangement, adjustment, composition, liquidation, disability, dissolution or lack of power of the Class B Member, the Company or any of its Subsidiaries, any Guarantor or any other Person at any time liable for the payment of all or part of the Guaranteed Obligations; or, subject to Section 1.10(b) hereof, any sale, lease or transfer of any or all of the assets of the Class B Member, any Guarantor, the Company or any of the Subsidiaries, or, subject to Section 1.10(b) hereof, any changes in the direct or indirect shareholders, partners or members, as applicable, of the Class B Member, any Guarantor or the Company or any of its Subsidiaries; or any reorganization of the Class B Member, any Guarantor or the Company or any of its Subsidiaries.

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

Section 2.5           Release of Obligors. Any full or partial release of the liability of the Class B Member or the Company for the Guaranteed Obligations or any part thereof, or of any co-guarantors, or of any other Person now or hereafter liable, whether directly or indirectly, jointly, severally, or jointly and severally, to pay, perform, guarantee or assure the payment of the Guaranteed Obligations, or any part thereof, it being recognized, acknowledged and agreed by each Guarantor that such Guarantor may be required to pay the Guaranteed Obligations in full

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without assistance or support from any other Person, and no Guarantor has been induced to enter into this Guaranty on the basis of a contemplation, belief, understanding or agreement that other Persons will be liable to pay or perform the Guaranteed Obligations or that the Class A Member will look to other Persons to pay or perform the Guaranteed Obligations.

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

Section 2.7           Release of Collateral. Any release, surrender, exchange, subordination, deterioration, waste, loss or impairment (including, without limitation, negligent, willful, unreasonable or unjustifiable impairment) of any collateral, property or security at any time existing in connection with, or assuring or securing payment of, all or any part of the Guaranteed Obligations, subject, however, to the terms of Section 1.10 hereof.

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

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

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

Section 2.11         Merger. The reorganization, merger or consolidation of the Class B Member, the Company or any of the Subsidiaries into or with any other Person.

Section 2.12         Preference. Any payment by the Class B Member, the Company or any Person to the Class A Member is held to constitute a preference under the Bankruptcy Code or for any reason the Class A Member is required to refund such payment or pay such amount to the Class B Member, the Company or such other Person.

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

ARTICLE 3
REPRESENTATIONS AND WARRANTIES

To induce the Class A Member to enter into the Transaction Documents and to invest in the Company, each Guarantor represents and warrants to the Class A Member as follows:

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

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

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

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

Section 3.5           Legality. The execution, delivery and performance by each Guarantor of this Guaranty and the consummation of the transactions contemplated hereunder do not and will not contravene or conflict with any law, statute or regulation whatsoever to which such Guarantor is subject, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the breach of, any indenture, mortgage, charge, lien, contract, agreement or other instrument to which such Guarantor is a party or which may be applicable to such Guarantor. This Guaranty is a legal and binding obligation of each

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Guarantor and is enforceable against such Guarantor in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to the enforcement of creditors’ rights.

Section 3.6           No Plan Assets. No Guarantor sponsors, is obligated to contribute to, or is itself an “employee benefit plan,” as defined in Section 3(3) of ERISA, subject to Title I of ERISA, and none of the assets of any Guarantor constitutes or will, until the Redemption Price has been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty), constitute “plan assets” of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. In addition, (a) no Guarantor is a “governmental plan” within the meaning of Section 3(32) of ERISA and (b) transactions by or with Guarantor are not subject to any state statute regulating investments of, or fiduciary obligations with respect to, governmental plans. As of the date hereof, none of the Guarantors, nor any member of a “controlled group of corporations” (within the meaning of Section 414 of the Code) maintains, sponsors or contributes to a “defined benefit plan” (within the meaning of Section 3(35) of ERISA) or a “multiemployer pension plan” (within the meaning of Section 3(37)(A) of ERISA).

Section 3.7           ERISA. No Guarantor shall engage in any transaction, other than a transaction contemplated hereunder, which would cause any obligation, or action taken or to be taken, hereunder (or the exercise by the Class A Member of any of its rights under the Operating Agreement or the other Transaction Documents) to be a non-exempt prohibited transaction under ERISA.

Section 3.8           Survival. All representations and warranties made by each Guarantor herein shall survive the execution hereof.

ARTICLE 4
SUBORDINATION OF CERTAIN INDEBTEDNESS

Section 4.1           Subordination of All Guarantor Claims. As used herein, the term “Guarantor Claims” shall mean all debts and liabilities of the Class B Member, the Company or any of the Subsidiaries to any one or more of the Guarantors, whether such debts and liabilities now exist or are hereafter incurred or arise, and whether the obligations of such Person thereon be direct, contingent, primary, secondary, several, joint and several, or otherwise, and irrespective of whether such debts or liabilities be evidenced by note, contract, open account, or otherwise, and irrespective of the Person or Persons in whose favor such debts or liabilities may, at their inception, have been, or may hereafter be, created, or the manner in which they have been, or may hereafter be, acquired by the applicable Guarantor or Guarantors. The Guarantor Claims shall include, without limitation, all rights and claims of any one or both of the Guarantors against the Class B Member, the Company or any of the Subsidiaries (arising as a result of subrogation or otherwise) as a result of payment of all or a portion of the Guaranteed Obligations by any Guarantor or the Guarantors. Until the Redemption Price shall have been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty), no Guarantor shall receive or collect, directly or indirectly, from e Class B Member, the Company, any of the Subsidiaries or any other Person obligated to the Class A Member any amount upon the Guarantor Claims.

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

Section 4.3           Payments Held in Trust. Notwithstanding anything to the contrary contained in this Guaranty, in the event that any Guarantor should receive any funds, payments, claims and/or distributions which are prohibited by this Guaranty, such Guarantor agrees to hold in trust for the Class A Member an amount equal to the amount of all funds, payments, claims and/or distributions so received and not previously paid to the Class A Member, and agrees that it shall have absolutely no dominion over the amount of such funds, payments, claims and/or distributions so received except to pay such funds, payments, claims and/or distributions promptly to the Class A Member, and such Guarantor covenants promptly to pay the same to the Class A Member.

Section 4.4           Liens Subordinate. Each Guarantor agrees that any liens, security interests, judgment liens, charges or other encumbrances upon the assets of the Class B Member, the Company or any of the Subsidiaries securing payment of the Guarantor Claims shall be and remain inferior and subordinate to any liens, security interests, judgment liens, charges or other encumbrances upon such Person’s assets securing payment of the Guaranteed Obligations, regardless of whether such encumbrances in favor of any Guarantor or the Class A Member presently exist or are hereafter created or attach. Without the prior written consent of the Class A Member, until the Redemption Price shall have been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty), no Guarantor shall (i) exercise or enforce any creditor’s rights it may have against the Class B Member, the Company or any of the Subsidiaries, or (ii) foreclose, repossess, sequester or otherwise take steps or institute any action or proceedings (judicial or otherwise, including, without limitation, the commencement of, or the joinder in, any liquidation, bankruptcy, rearrangement, debtor’s relief or insolvency proceeding) to enforce any liens, mortgages, deeds of trust, security interests, collateral rights, judgments or other encumbrances on the assets of the Class B Member, the Company or any of the Subsidiaries held by any Guarantor.

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ARTICLE 5
COVENANTS

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

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

(b)          “IFRS” shall mean the International Financial Reporting Standards.

(c)          “Liquid Assets” shall mean any of the following, but only to the extent owned individually, free of all security interests, liens, pledges, charges or any other encumbrance: (a) cash (excluding proceeds of the Properties that have not been distributed by the Company), (b) certificates of deposit (with a maturity of two years or less) issued by, or savings account with, any Approved Bank or other bank or other financial institution reasonably acceptable to the Class A Member, (c) marketable securities listed on a national or international exchange reasonably acceptable to the Class A Member (it being understood, without limitation of the foregoing, that the New York Stock Exchange and NASDAQ shall be deemed acceptable to the Class A Member), marked to market, (d) U.S. Obligations or (e) aggregate availability under unencumbered, unfunded capital commitments that any Guarantor may unconditionally draw from any of its partners.

(d)          “Net Worth” shall mean, as of a given date, (i) a Person’s total assets as of such date (without regard to the Properties or any equity therein) less (ii) such Person’s total liabilities as of such date (exclusive of any liability under the Mortgage Loan Documents and/or the First Mezzanine Loan Documents), determined in accordance with GAAP or IFRS.

Section 5.2          Covenants. Until the Redemption Price and the Guaranteed Obligations have been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty), Guarantors shall collectively and not individually maintain (x) an aggregate Net Worth of not less than $250,000,000.00 (the “Net Worth Threshold”) and (y) aggregate Liquid Assets of not less than $20,000,000.00 (the “Liquid Assets Threshold”).

Section 5.3          Intentionally Omitted.

Section 5.4          Financial Statements. Each Guarantor shall deliver to the Class A Member:

(a)          within 120 days after the end of each fiscal year of such Guarantor, a complete copy of such Guarantor’s annual financial statements in the form delivered to such guarantor’s limited partners, together with a certificate of the general partner of such Guarantor certifying that, to the best of the signer’s knowledge, such annual financial statements fairly present the financial condition and results of the operations of such Guarantor;

(b)          within 90 days after the end of each fiscal quarter of such Guarantor, financial statements in the form delivered to such Guarantor’s limited partners, together with a certificate of the general partner of such Guarantor certifying that, to the best of the signer’s

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knowledge, such quarterly financial statements fairly present the financial condition and results of the operations of such Guarantor in a manner consistent with GAAP (subject to year-end adjustments) or IFRS; and

(c)          20 days after request by the Class A Member, such other financial information with respect to such Guarantor as the Class A Member may reasonably request.

(d)          No individual Guarantor shall have any obligation to deliver financial statements under this Guaranty.

ARTICLE 6
MISCELLANEOUS

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

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

If to the Class A
Member:	c/o Goldman Sachs Realty Management, L.P.
	6011 Connection Drive
	Irving, Texas 75039
	Attn:  Greg Fay
	Facsimile No.:  (972) 368-3699
	Telephone No.:  (972) 368-2743

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with copies to:	Whitehall Street Global Real Estate Limited Partnership 2007
	c/o Goldman, Sachs & Co.
	200 West Street
	New York, New York 10282
	Attn:  Chief Financial Officer
	Facsimile No.:  (212) 357-5505
	Telephone No.: (212) 902-5520
and:	Sullivan & Cromwell LLP
	125 Broad Street
	New York, New York 10004
	Attention:  Anthony J. Colletta, Esq.
	Facsimile No. (212) 291-9029
If to Guarantors:	c/o American Realty Capital
	405 Park Avenue
	New York, New York 10022
	Attn: Jon Mehlman
	Facsimile No.:  (212) 421-5799
	Telephone No.: (646) 626-8857
with a copy to:	c/o American Realty Capital
	405 Park Avenue
	New York, New York 10022
	Attn: Michael Ead
	Facsimile No.:  (212) 421-5799
	Telephone No.: (646) 381-0604

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

Section 6.3           Governing Law; Jurisdiction; Service of Process. (a) THIS GUARANTY WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY EACH GUARANTOR AND ACCEPTED BY THE CLASS A MEMBER IN THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION RELATED HERETO, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS GUARANTY AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE

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UNITED STATES OF AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH GUARANTOR HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS GUARANTY AND/OR THE OTHER TRANSACTION DOCUMENTS, AND THIS GUARANTY AND THE OTHER TRANSACTION DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST THE CLASS A MEMBER OR ANY GUARANTOR ARISING OUT OF OR RELATING TO THIS GUARANTY MAY AT THE CLASS A MEMBER’S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND EACH GUARANTOR WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND EACH GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. EACH GUARANTOR AGREES THAT SERVICE OF PROCESS UPON SUCH GUARANTOR AT THE ADDRESS FOR SUCH GUARANTOR SET FORTH HEREIN AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO SUCH GUARANTOR IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON SUCH GUARANTOR IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. EACH GUARANTOR (I) SHALL GIVE PROMPT NOTICE TO THE CLASS A MEMBER OF ANY CHANGE IN THE ADDRESS FOR SUCH GUARANTOR SET FORTH HEREIN, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE AN AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE AN AUTHORIZED AGENT IF SUCH GUARANTOR CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF THE CLASS A MEMBER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY GUARANTOR IN ANY OTHER JURISDICTION.

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

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

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

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

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

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

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

Section 6.11         Entirety. THIS GUARANTY EMBODIES THE FINAL, ENTIRE AGREEMENT OF GUARANTORS AND THE CLASS A MEMBER WITH RESPECT TO GUARANTORS’ GUARANTY OF THE GUARANTEED OBLIGATIONS AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF. THIS GUARANTY IS INTENDED BY GUARANTORS AND THE CLASS A MEMBER AS A FINAL AND COMPLETE EXPRESSION OF THE TERMS OF THE GUARANTY, AND NO COURSE OF DEALING BETWEEN GUARANTORS AND THE CLASS A MEMBER, NO COURSE OF PERFORMANCE, NO TRADE PRACTICES AND NO EVIDENCE OF

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PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE SHALL BE USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS GUARANTY. THERE ARE NO ORAL AGREEMENTS BETWEEN GUARANTORS AND THE CLASS A MEMBER.

Section 6.12         Waiver of Right To Trial By Jury. EACH GUARANTOR AND THE CLASS A MEMBER EACH HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS GUARANTY, THE OPERATING AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY EACH GUARANTOR AND THE CLASS A MEMBER 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 PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE OTHER PARTIES.

Section 6.13         Cooperation. Each Guarantor acknowledges that the Class A Member and its successors and assigns may (subject to Section 9.2 of the Operating Agreement) (i) sell this Guaranty and the other Transaction Documents and/or the Class A Member’s Interest to one or more investors, (ii) deposit this Guaranty and the other Transaction Documents with a trust, which trust may sell certificates to investors evidencing an ownership interest in the trust assets, or (iii) otherwise sell the Class A Member’s Interest or one or more interests therein to investors (the transactions referred to in clauses (i) through (iii) are hereinafter each referred to as “Secondary MarketTransaction”). Each Guarantor shall at no cost to any Guarantor, cooperate with the Class A Member in effecting any such Secondary Market Transaction and shall provide (or cause the Class B Member, the Company and/or the Subsidiaries to provide) such information and materials as may be reasonably requested by the Class A Member in connection with such Secondary Market Transaction.

Section 6.14         Reinstatement in Certain Circumstances. If at any time any payment of the Class A Return, the Unrecovered Capital or any other amount payable by the Company or the Class B Member under the Operating Agreement or the other Transaction Documents is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Company or the Class B Member or otherwise, Guarantors’ obligations hereunder with respect to such payment shall be reinstated as though such payment had been due but not made at such time.

Section 6.15         Exculpation of Certain Persons. Notwithstanding anything to the contrary contained in this Guaranty or any other Transaction Document, no direct or indirect shareholder, partner, member, principal, Affiliate (other than the Class B Member and the Company), employee, officer, trustee, director, agent or other representative of a Guarantor and/or of any of its Affiliates (each, a “Related Party”) shall have any personal liability for, nor

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be joined as party to, any action with respect to payment, performance or discharge of any covenants, obligations, or undertakings of any Guarantor under this Guaranty, and by acceptance hereof, the Class A Member for itself and its successors and assigns irrevocably waives any and all right to sue for, seek or demand any such damages, money judgment, deficiency judgment or personal judgment against any Related Party under or by reason of or in connection with this Guaranty; except that any Related Party that is a party to any Transaction Document or any other separate written guaranty, indemnity or other agreement given by such Related Party in connection with the Investment shall remain fully liable therefor and the foregoing provisions shall not operate to limit or impair the liabilities and obligations of such Related Parties or the rights and remedies of the Class A Member thereunder.

Section 6.16        Gender; Number; General Definitions. Unless the context clearly indicates a contrary intent or unless otherwise specifically provided herein, (a) words used in this Guaranty may be used interchangeably in the singular or plural form, (b) any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, (c) the word “the Class A Member” shall mean “the Class A Member and any subsequent holder of the Class A Member’s Interest”, (d) the word “Properties” shall include any portion of any of the Properties and any interest therein, and (e) the phrases “attorneys’ fees”, “legal fees” and “counsel fees” shall include any and all attorneys’, paralegal and law clerk fees and disbursements, including, but not limited to, fees and disbursements at the pre-trial, trial and appellate levels, incurred or paid by the Class A Member in protecting its interest in the Company (including any Protective Capital advances by the Class A Member) and/or in enforcing its rights hereunder.

Section 6.17        Joint and Several. The obligations of each Guarantor hereunder are joint and several.

Section 6.18        Certain California State Specific Provisions.

(a)          To the extent California law applies, nothing herein shall be deemed to limit the right of the Class A Member to recover in accordance with California Code of Civil Procedure Section 736 (as such Section may be amended from time to time), any costs, expenses, liabilities or damages, including reasonable attorneys’ fees and costs, incurred by the Class A Member and arising from any covenant, obligation, liability, representation or warranty contained in any indemnity agreement given to the Class A Member, or any order, consent decree or settlement relating to the cleanup of Hazardous Substances (as defined in the Environmental Indemnity Agreement) or any other “environmental provision” (as defined in such Section 736) relating to any Property or any portion thereof.

(b)          To the extent California law applies, in addition to and not in lieu of any other provisions of this Guaranty (provided, however, that in the case of any conflict or inconsistency between the provisions of this Section 6.18(b) and the other provisions of this Guaranty as to any subject matter described in this Section 6.18(b), such other provisions shall control), each Guarantor represents, warrants and covenants as follows:

(c)          The obligations of each Guarantor under this Guaranty shall be performed without demand by the Class A Member and shall be unconditional irrespective of the genuineness, validity, regularity or enforceability of any of the Operating Agreement or any of

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the other Transaction Documents, and without regard to any other circumstance which might otherwise constitute a legal or equitable discharge of a surety or a guarantor. Each Guarantor hereby waives any and all benefits and defenses under California Civil Code Section 2810 and agrees that by doing so such Guarantor shall be liable even if neither the Company nor the Class B Member had no liability at the time of execution of the Transaction Documents, or thereafter ceases to be liable. Each Guarantor hereby waives any and all benefits and defenses under California Civil Code Section 2809 and agrees that by doing so such Guarantor’s liability may be larger in amount and more burdensome than that of the Company or any of its Subsidiaries. Each Guarantor hereby waives the benefit of all principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms of this Guaranty and agrees that such Guarantor’s obligations shall not be affected by any circumstances, whether or not referred to in this Guaranty which might otherwise constitute a legal or equitable discharge of a surety or a guarantor. Each Guarantor hereby waives the benefits of any right of discharge under any and all statutes or other laws relating to guarantors or sureties and any other rights of sureties and guarantors thereunder.

(d)          In accordance with Section 2856 of the California Civil Code, each Guarantor hereby waives all rights and defenses arising out of an election of remedies by the Class A Member even though that election of remedies, such as a nonjudicial foreclosure with respect to security for guaranteed obligations, has destroyed or otherwise impaired such Guarantor’s rights of subrogation and reimbursement against the principal by the operation of Section 580d of the California Code of Civil Procedure or otherwise. Each Guarantor hereby authorizes and empowers the Class A Member to exercise, in its sole and absolute discretion, any right or remedy, or any combination thereof, which may then be available, since it is the intent and purpose of each Guarantor that the obligations under this Guaranty shall be absolute, independent and unconditional under any and all circumstances. Specifically, and without in any way limiting the foregoing, each Guarantor hereby waives any rights of subrogation, indemnification, contribution or reimbursement arising under Sections 2846, 2847, 2848 and 2849 of the California Civil Code or any other right of recourse to or with respect to the Company or any of its Subsidiaries, any general partner, member or other constituent of the Company or any of its Subsidiaries, any other person obligated to the Class A Member with respect to the matters set forth herein, or the assets or property of any of the foregoing until the Redemption Price has been paid in full and all obligations of the Company and its Affiliates under the Transaction Documents have been fully performed, and there has expired the maximum possible period thereafter during which any payment made by the Company or others to the Class A Member with respect to such obligations could be deemed a preference under the United States Bankruptcy Code. In connection with the foregoing, subject to the foregoing limitations, each Guarantor expressly waives any and all rights of subrogation against the Company and each of its Subsidiaries, and each Guarantor hereby waives any rights to enforce any remedy which the Class A Member may have against the Company or any of its Subsidiaries.

(e)          In addition to and without in any way limiting the foregoing, each Guarantor hereby subordinates any and all indebtedness of the Company and each Subsidiary now or hereafter owed to any Guarantor to all the indebtedness of the Company or any Subsidiary to the Class A Member and agrees with the Class A Member that until the Redemption Price has been paid in full and all obligations owed to the Class A Member under

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the Transaction Documents have been fully performed, and there has expired the maximum possible period thereafter during which any payment made by the Company or others to the Class A Member with respect to such obligations could be deemed a preference under the United States Bankruptcy Code, no Guarantor shall demand or accept any payment of principal or interest from the Company or any of its Subsidiaries or claim any offset or other reduction of any Guarantor’s obligations hereunder because of any such indebtedness. If any amount shall nevertheless be paid to an Guarantor by the Company or any Subsidiary or another guarantor prior to payment in full of the Redemption Price, such amount shall be held in trust for the benefit of the Class A Member and shall forthwith be paid to the Class A Member to be credited and applied to the Unrecovered Capital. Further, no Guarantor shall have any right of recourse against the Class A Member by reason of any action the Class A Member may take or omit to take under the provisions of this Guaranty or under the provisions of any of the Transaction Documents. Without limiting the generality of the foregoing, each Guarantor hereby waives, to the fullest extent permitted by law, diligence in collecting the obligations owed to the Class A Member under the Transaction Documents, presentment, demand for payment, protest, all notices with respect to the Operating Agreement, this Guaranty, or any other Transaction Document which may be required by statute, rule of law or otherwise to preserve the Class A Member’s rights against such Guarantor under this Guaranty, including, but not limited to, notice of acceptance, notice of any amendment of the Transaction Documents, notice of the occurrence of any default, notice of intent to accelerate, notice of acceleration, notice of dishonor, notice of foreclosure, notice of protest, and notice of the incurring by the Company or any of its Subsidiaries of any obligation or indebtedness.

(f)          Without limiting the foregoing, but subject to the same limitations set forth above, each Guarantor waives (i) all rights of subrogation, reimbursement, indemnification, and contribution and any other rights and defenses that are or may become available to any Guarantor by reason of California Civil Code Sections 2787 to 2855, inclusive, including any and all rights or defenses such Guarantor may have by reason of protection afforded to the Company or any of its Subsidiaries with respect to any of the obligations of any Guarantor under this Guaranty by reason of a nonjudicial foreclosure or pursuant to the antideficiency or other laws of the State of California limiting or discharging the obligations of the Company or any of its Subsidiaries. Without limiting the generality of the foregoing, each Guarantor hereby expressly waives any and all benefits under California Code of Civil Procedure Section 726 (which Section, if such Guarantor had not given this waiver, among other things, would otherwise require the Class A Member to exhaust all of its security before a personal judgment could be obtained for a deficiency).

(g)          Likewise, each Guarantor waives (i) any and all rights and defenses available to such Guarantor under California Civil Code Sections 2899 and 3433; and (ii) any rights or defenses such Guarantor may have with respect to its obligations as a guarantor by reason of any election of remedies by the Class A Member. These rights and defenses include, but are not limited to, any rights or defenses based upon Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure.

[NO FURTHER TEXT ON THIS PAGE.]

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

GUARANTORS:
AMERICAN REALTY CAPITAL HOSPITALITY OPERATING PARTNERSHIP, L.P.
By:	American Realty Capital Hospitality Trust, Inc., its general partner
	By:
		Name:  Jonathan Mehlman
		Title: CEO and President
American Realty Capital Hospitality Trust, Inc.
By:
	Name:  Jonathan Mehlman
	Title: CEO and President

[Signatures continue on next page]

Signature Page to Bad Boy Guaranty

NICHOLAS S. SCHORCSH

Name: Nicholas S. Schorsch  

[Signatures continue on next page]

Signature Page to Bad Boy Guaranty

WILLIAM M. KAHANE

Name: William M. Kahane  

[Signatures continue on next page]

Signature Page to Bad Boy Guaranty

EDWARD M. WEIL, JR.

Name:  Edward M. Weil, Jr.

[Signatures continue on next page]

Signature Page to Bad Boy Guaranty

PETER M. BUDKO

Name:  Peter M. Budko

Signature Page to Bad Boy Guaranty

EX-10.29

Exhibit 10.29

BAD BOY GUARANTY

This BAD BOY GUARANTY (this “Guaranty”) is executed as of February 27, 2015, by American Realty Capital Hospitality Operating Partnership, L.P., a Delaware limited partnership, AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC., a Maryland corporation, having an office at c/o American Realty Capital, 405 Park Avenue, New York, New York 10022, Nicholas S. Schorsch, an individual, William M. Kahane, an individual, Edward M. Weil, Jr., an individual, and Peter M. Budko, an individual (each of the foregoing, a “Guarantor”, and collectively, “Guarantors”), for the benefit of W2007 EQUITY INNS PARTNERSHIP, L.P., a Tennessee limited partnership, and W2007 EQUITY INNS TRUST, a Maryland trust, each having an office at c/o Goldman Sachs Realty Management, L.P., 6011 Connection Drive, Irving, Texas 75039 (collectively, and together with their respective successors and/or assigns, the “Class A Member”).

WITNESSETH:

WHEREAS, the Class A Member is prepared to make an investment (the “Investment”) in ARC Hospitality Portfolio II Holdco, LLC, a Delaware limited liability company (the “Company”), in the amount of $99,799,180.00 as described in the Amended and Restated Limited Liability Company Agreement of the Company, of even date herewith, among the Class A Member, American Realty Capital Hospitality Portfolio Member LP, a Delaware limited partnership (the “Class B Member”), and William G. Popeo, as special member (as the same may be amended, modified or supplemented from time to time, the “Operating Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Operating Agreement;

WHEREAS, each Guarantor acknowledges receipt and approval of copies of the Operating Agreement and the other Transaction Documents;

WHEREAS, each Guarantor acknowledges that it owns, either directly or indirectly, a beneficial interest in the Class B Member and, as a result of such beneficial interest, will receive substantial economic and other benefits from the Class A Member making the Investment in the Company; and

WHEREAS, the Class A Member is unwilling to make the Investment or to enter into the Operating Agreement unless Guarantors agree to provide the indemnification, representations, warranties, covenants and other matters described in this Guaranty for the benefit of the Class A Member.

NOW, THEREFORE, as an inducement to the Class A Member to make the Investment, enter into the Operating Agreement and become a Member of the Company, and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:

ARTICLE 1
NATURE AND SCOPE OF GUARANTY

Section 1.1          Guaranty of Obligation.

(a)          Subject to Section 1.10 hereof, each Guarantor hereby irrevocably and unconditionally guarantees to the Class A Member and its successors and assigns the payment and performance of the Guaranteed Obligations (as defined below) as and when the same shall be due and payable, whether by lapse of time, by acceleration of maturity or otherwise. Each Guarantor hereby irrevocably and unconditionally covenants and agrees that it is liable for the Guaranteed Obligations as a primary obligor.

(b)          As used herein, the term “Guaranteed Obligations” means (i) the Recourse Liabilities and (ii) from and after the date that any Springing Recourse Event occurs, payment of the Redemption Price.

(c)          For purposes hereof, the “Recourse Liabilities” shall mean any actual loss, damage, out-of-pocket cost or expense, liability, claim or other obligation incurred by the Class A Member (including reasonable outside attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:

(i)          fraud or intentional misrepresentation committed by the Company, the Class B Member, any Guarantor or any of their respective Affiliates in connection with the Investment;

(ii)         wrongful removal of personal property from the Properties after a Changeover Event by the Company, the Class B Member, any Guarantor or any of their respective Affiliates, unless replaced with personal property of substantially the same or greater utility and of the same or greater value;

(iii)        any intentional physical waste at any Property committed by the Company, the Class B Member, any Guarantor or any of their respective Affiliates;

(iv)        the misappropriation by the Company, the Class B Member, any Guarantor or any of their respective Affiliates of any proceeds (including proceeds of Capital Contributions, Capital Event Proceeds and Protective Capital) or other funds (including any proceeds paid by reason of any Casualty to any Property and any awards in connection with the Condemnation of any Property), revenues, rents, income, security deposits or other amounts;

(v)         failure to obtain and maintain the fully paid for insurance policies in accordance with Section 5.7 of the Operating Agreement to the extent that adequate funds were available to the Company and its Subsidiaries from the income of the Properties for the payment of the premiums thereof;

(vi)        if the Class B Member, the Company or any of the Subsidiaries fails to maintain its status as a single purpose entity in accordance with the terms of Section 5.15(a) of the Operating Agreement and such failure does not result in the substantive

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consolidation of the assets and liabilities of the Class B Member, the Company or any of the Subsidiaries with any other Person as a result of such breach; and/or

(vii)       the modification of any ground lease affecting any Property if such modification is prohibited under the Operating Agreement or any of the other Transaction Documents and such modification has a material adverse effect on the related Property or the leasehold interest therein (including the value or operation thereof) or the Class A Member’s ability to exercise its rights and remedies under the Transaction Documents.

(d)          For purposes hereof, each of the following shall constitute a Springing Recourse Event:

(i)          if the Company fails to obtain the Class A Member’s prior written consent to any financing for borrowed money, whether secured or unsecured, in violation of the terms of the Operating Agreement or any of the other Transaction Documents;

(ii)         if the Class B Member, the Company or any of the Subsidiaries fails to obtain the Class A Member’s prior written consent to any voluntary mortgage, deed of trust, security deed, security agreement or similar grant by the Company or any of its Subsidiaries of a voluntary Lien upon any Property, or any voluntary granting of a security interest in, voluntary pledge of or other voluntary Lien upon any direct or indirect equity interest in the Company or any of the Subsidiaries, in each case, as security for any obligations or liabilities that is not permitted under the Operating Agreement or any of the other Transaction Documents;

(iii)        if the Class B Member, the Company or any of the Subsidiaries fails to obtain the Class A Member’s prior written consent to any voluntary transfer of any Property or any of the equity interests in the Subsidiaries that is not permitted under the Operating Agreement or any of the other Transaction Documents;

(iv)        if the Class B Member ceases to be Controlled, directly or indirectly, by ARC OP, or if ARC OP ceases to be Controlled, directly or indirectly by the REIT, or if the REIT ceases to be Controlled, directly or indirectly, by AR Capital, LLC;

(v)         the Class B Member, the Company or any of the Subsidiaries files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law;

(vi)        the filing of an involuntary petition against the Class B Member, the Company or any of the Subsidiaries under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by any other Person in which the Class B Member, the Company, any Subsidiary or any of their respective Affiliates colludes with or otherwise assists such Person, and/or the Class B Member, the Company, any Subsidiary or any of their respective Affiliates solicits or causes to be solicited petitioning creditors for any involuntary petition against the Class B Member, the Company or any of the Subsidiaries by any Person;

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(vii)       if the Class B Member, the Company or any of the Subsidiaries files an answer consenting to, or joining in, any involuntary petition filed against it by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law;

(viii)      if the Class B Member, the Company, any Subsidiary or any of their respective Affiliates consents to, or joins in, an application for the appointment of a custodian, receiver, trustee or examiner for the Class B Member, the Company or any of the Subsidiaries and/or any portion of any Property;

(ix)         if the Class B Member, the Company or any of the Subsidiaries makes an assignment for the benefit of creditors or admits, in any legal proceeding, its insolvency or inability to pay its debts as they become due; or

(x)          if the Class B Member, the Company or any of the Subsidiaries fails to maintain its status as a single purpose entity in accordance with the terms of Section 5.15(a) of the Operating Agreement and such failure results in the substantive consolidation of the assets and liabilities of the Class B Member, the Company or any of the Subsidiaries with any other Person in a bankruptcy or similar proceeding under the Bankruptcy Code or any other federal or state bankruptcy or insolvency law.

(e)          Notwithstanding anything to the contrary in this Guaranty or in any of the other Transaction Documents, then Class A Member shall not be deemed to have waived any right which the Class A Member may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Redemption Price or to require that all collateral shall continue to secure all of the obligations owed to the Class A Member in accordance with the Transaction Documents.

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

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

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

Section 1.5           No Duty To Pursue Others. It shall not be necessary for the Class A Member (and each Guarantor hereby waives any rights which such Guarantor may have to require the Class A Member), in order to enforce the obligations of Guarantors hereunder, first to (i) institute suit or exhaust its remedies against the Company or others liable for the Guaranteed Obligations or any other Person, including, without limitation, any general partner of any of the foregoing which is a partnership, (ii) declare a Changeover Event, (iii) enforce the Class A Member’s rights against any collateral which shall ever have been given to secure the obligations owed to the Class A Member under the Operating Agreement or the other Transaction Documents, (iv) enforce the Class A Member’s rights against any other guarantors of the Guaranteed Obligations, including, without limitation, any general partner of any of the foregoing which is a partnership, (v) join the Class B Member, the Company or any others liable on the Guaranteed Obligations in any action seeking to enforce this Guaranty, (vi) exhaust any remedies available to the Class A Member under the Transaction Documents, or (vii) resort to any other means of obtaining payment of the Guaranteed Obligations, including, to the extent California law is deemed to apply notwithstanding the choice of law set forth herein, any of the foregoing which may be available to the Class A Member by virtue of California Civil Code Sections 2845, 2849, and 2850. The Class A Member shall not be required to mitigate damages or take any other action to reduce, collect or enforce the Guaranteed Obligations.

Section 1.6           Waivers. Each Guarantor acknowledges receipt of copies of the Operating Agreement and the other Transaction Documents and hereby waives notice of (i) any loans or advances (including advances of Protective Capital) made by the Class A Member to the Company, (ii) acceptance of this Guaranty, (iii) any amendment of any Transaction Document or extension of the Mandatory Redemption Date, (iv) the occurrence of any breach by the Class B Member or the Company under the Operating Agreement or the other Transaction Documents or the declaration of a Changeover Event, (v) the Class A Member’s transfer or disposition of the Guaranteed Obligations, or any part thereof, (vi) protest, proof of non-payment or default by the Class B Member or the Company, or (vii) any other action at any time taken or omitted by the Class A Member and, generally, all demands and notices of every kind in connection with this Guaranty, the Transaction Documents, any documents or agreements evidencing, securing or relating to any of the Guaranteed Obligations and/or the obligations hereby guaranteed.

Section 1.7           Payment of Expenses. In the event that any Guarantor shall breach or fail to timely perform any provisions of this Guaranty, Guarantors shall, immediately upon demand by the Class A Member, pay the Class A Member all reasonable out-of-pocket costs and

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expenses (including court costs and reasonable attorneys’ fees) incurred by the Class A Member in the enforcement hereof or the preservation of the Class A Member’s rights hereunder. The covenant contained in this Section shall survive the payment and performance of the Guaranteed Obligations.

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

Section 1.9          Waiver and Postponement of Subrogation, Reimbursement and Contribution. Notwithstanding anything to the contrary contained in this Guaranty, each Guarantor hereby unconditionally and irrevocably agrees to postpone the exercise of and, until the Redemption Price has been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty), does hereby irrevocably waive and defer any and all rights it may now or hereafter have under any agreement, at law or in equity (including, without limitation, any law subrogating Guarantors’ rights to the rights of the Class A Member), to assert any claim against or seek contribution, indemnification or any other form of reimbursement from the Company or any of its Subsidiaries or any other party liable to the Class A Member for the payment of any or all of the Guaranteed Obligations for any payment made by Guarantors under or in connection with this Guaranty or otherwise; provided that, for clarity, such postponement and waiver shall only be in effect until the Redemption Price has been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty).

Section 1.10        Limitations on Liability of Guarantors.

(a)          As used herein, a “Guarantor Affiliate” shall mean any Guarantor, the Class B Member and/or any other Person that either (or both) (a) is in Control of, is Controlled by or is under common Control with (i) any Guarantor or (ii) any general partner or managing member of, or other Person or Persons Controlling, any Guarantor (each a “Clause (a) Person”), or (b) is either (1) a Person that owns directly or indirectly thirty-five percent (35%) or more of the direct or indirect equity interests in any Guarantor or any other Clause (a) Person, or (2) a Person with respect to which either (or a combination) of the Guarantors directly or indirectly owns thirty-five percent (35%) or more of the direct or indirect equity interests in such Person, or (3) a Person with respect to which any combination of Guarantors and Clause (a) Persons own, directly or indirectly, fifty-one percent (51%) or more of the direct or indirect voting equity interests in such Person. In addition to, and without limiting, the foregoing, if a direct or indirect interest in a loan secured by direct or indirect interests in the Company or any of its Subsidiaries is held by a Guarantor Affiliate, the related lender will be deemed a Guarantor Affiliate unless such Guarantor Affiliate is a Disabled Participant (as defined below) and one or more other holders of substantial interests in such loan that are not Guarantor Affiliates control the administration of such loan and the enforcement of the rights and remedies of such lender. A

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Guarantor Affiliate is a “Disabled Participant” with respect to a loan if it has no right to exercise any voting or other control rights with respect to such loan (other than the right to approve amendments to the material economic terms of such loan).

(b)          Notwithstanding anything to the contrary herein or in the other Transaction Documents, in the event of the declaration of a Changeover Event, then Guarantors shall not have any liability hereunder for any Losses arising from any circumstance, condition, action or event first occurring after the date of the declaration of a Changeover Event and not caused by the acts of either of the Guarantors or any other Guarantor Affiliate; provided that (i) Guarantors shall remain liable hereunder that arise from any action or event prior to the date of the declaration of a Changeover Event and (ii) if, following the declaration of a Changeover Event, an arbitration panel appointed pursuant to Section 12.10 of the Operating Agreement determines that such Changeover Event has not occurred pursuant to Section 3.5 of the Operating Agreement, then the Guarantors shall continue to be fully liable for all of its obligations hereunder (other than any liabilities caused solely by the actions of the Class A Member taken on behalf of the Company or any of its Subsidiaries following such declaration of a Changeover Event).

(c)          At any time prior to the declaration of a Changeover Event, Guarantors shall be entitled to request and Class A Member agrees to grant the release of any Guarantor from its obligations hereunder so long as, following such release, the remaining Guarantor(s) collectively and not individually continue(s) to satisfy the Net Worth Threshold and Liquid Assets Threshold requirements set forth in Section 5.2 hereof. In connection with any release of a Guarantor pursuant to this Section 1.10(c), the Class A Member shall execute and deliver a release of such Guarantor from all liability in respect of the Guaranteed Obligations.

(d)          Subject to the reinstatement of the Guarantors’ obligations hereunder pursuant to Section 6.14 hereof, this Guaranty shall terminate and be of no further force and effect upon the date of the payment in full of the Redemption Price; provided, however, that the Guaranteed Obligations shall survive such termination with respect to any and all such Guaranteed Obligations accruing prior to or arising out of or related to any circumstances, conditions, actions or events occurring or arising prior to the date of such repayment and satisfaction, even to the extent the applicable liability, loss, cost or expense does not occur or the applicable circumstance, condition, action or event is not discovered until after such date.

ARTICLE 2
EVENTS AND CIRCUMSTANCES NOT REDUCING
OR DISCHARGING GUARANTORS’ OBLIGATIONS

Subject to Section 1.10 hereof, to the extent permitted by applicable law, each Guarantor hereby consents and agrees to each of the following and agrees that such Guarantor’s obligations under this Guaranty shall not be released, diminished, impaired, reduced or adversely affected by any of the following and waives any common law, equitable, statutory or other rights (including, without limitation, rights to notice) which such Guarantor might otherwise have as a result of or in connection with any of the following:

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Section 2.1           Modifications. Any renewal, extension, increase, modification, alteration or rearrangement of all or any part of the Guaranteed Obligations, the Operating Agreement, the Transaction Documents or any other document, instrument, contract or understanding between Class B Member, any Guarantor or the Company and the Class A Member or any other parties pertaining to the Guaranteed Obligations or any failure of the Class A Member to notify Guarantors of any such action.

Section 2.2           Adjustment. Any adjustment, indulgence, forbearance or compromise that might be granted or given by the Class A Member to the Class B Member, the Company or any Guarantor.

Section 2.3           Condition of Relevant Entities. The insolvency, bankruptcy, arrangement, adjustment, composition, liquidation, disability, dissolution or lack of power of the Class B Member, the Company or any of its Subsidiaries, any Guarantor or any other Person at any time liable for the payment of all or part of the Guaranteed Obligations; or, subject to Section 1.10(b) hereof, any sale, lease or transfer of any or all of the assets of the Class B Member, any Guarantor, the Company or any of the Subsidiaries, or, subject to Section 1.10(b) hereof, any changes in the direct or indirect shareholders, partners or members, as applicable, of the Class B Member, any Guarantor or the Company or any of its Subsidiaries; or any reorganization of the Class B Member, any Guarantor or the Company or any of its Subsidiaries.

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

Section 2.5           Release of Obligors. Any full or partial release of the liability of the Class B Member or the Company for the Guaranteed Obligations or any part thereof, or of any co-guarantors, or of any other Person now or hereafter liable, whether directly or indirectly, jointly, severally, or jointly and severally, to pay, perform, guarantee or assure the payment of the Guaranteed Obligations, or any part thereof, it being recognized, acknowledged and agreed by each Guarantor that such Guarantor may be required to pay the Guaranteed Obligations in full

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without assistance or support from any other Person, and no Guarantor has been induced to enter into this Guaranty on the basis of a contemplation, belief, understanding or agreement that other Persons will be liable to pay or perform the Guaranteed Obligations or that the Class A Member will look to other Persons to pay or perform the Guaranteed Obligations.

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

Section 2.7           Release of Collateral. Any release, surrender, exchange, subordination, deterioration, waste, loss or impairment (including, without limitation, negligent, willful, unreasonable or unjustifiable impairment) of any collateral, property or security at any time existing in connection with, or assuring or securing payment of, all or any part of the Guaranteed Obligations, subject, however, to the terms of Section 1.10 hereof.

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

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

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

Section 2.11         Merger. The reorganization, merger or consolidation of the Class B Member, the Company or any of the Subsidiaries into or with any other Person.

Section 2.12         Preference. Any payment by the Class B Member, the Company or any Person to the Class A Member is held to constitute a preference under the Bankruptcy Code or for any reason the Class A Member is required to refund such payment or pay such amount to the Class B Member, the Company or such other Person.

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

ARTICLE 3
REPRESENTATIONS AND WARRANTIES

To induce the Class A Member to enter into the Transaction Documents and to invest in the Company, each Guarantor represents and warrants to the Class A Member as follows:

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

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

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

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

Section 3.5           Legality. The execution, delivery and performance by each Guarantor of this Guaranty and the consummation of the transactions contemplated hereunder do not and will not contravene or conflict with any law, statute or regulation whatsoever to which such Guarantor is subject, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the breach of, any indenture, mortgage, charge, lien, contract, agreement or other instrument to which such Guarantor is a party or which may be applicable to such Guarantor. This Guaranty is a legal and binding obligation of each

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Guarantor and is enforceable against such Guarantor in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to the enforcement of creditors’ rights.

Section 3.6           No Plan Assets. No Guarantor sponsors, is obligated to contribute to, or is itself an “employee benefit plan,” as defined in Section 3(3) of ERISA, subject to Title I of ERISA, and none of the assets of any Guarantor constitutes or will, until the Redemption Price has been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty), constitute “plan assets” of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. In addition, (a) no Guarantor is a “governmental plan” within the meaning of Section 3(32) of ERISA and (b) transactions by or with Guarantor are not subject to any state statute regulating investments of, or fiduciary obligations with respect to, governmental plans. As of the date hereof, none of the Guarantors, nor any member of a “controlled group of corporations” (within the meaning of Section 414 of the Code) maintains, sponsors or contributes to a “defined benefit plan” (within the meaning of Section 3(35) of ERISA) or a “multiemployer pension plan” (within the meaning of Section 3(37)(A) of ERISA).

Section 3.7           ERISA. No Guarantor shall engage in any transaction, other than a transaction contemplated hereunder, which would cause any obligation, or action taken or to be taken, hereunder (or the exercise by the Class A Member of any of its rights under the Operating Agreement or the other Transaction Documents) to be a non-exempt prohibited transaction under ERISA.

Section 3.8           Survival. All representations and warranties made by each Guarantor herein shall survive the execution hereof.

ARTICLE 4
SUBORDINATION OF CERTAIN INDEBTEDNESS

Section 4.1           Subordination of All Guarantor Claims. As used herein, the term “Guarantor Claims” shall mean all debts and liabilities of the Class B Member, the Company or any of the Subsidiaries to any one or more of the Guarantors, whether such debts and liabilities now exist or are hereafter incurred or arise, and whether the obligations of such Person thereon be direct, contingent, primary, secondary, several, joint and several, or otherwise, and irrespective of whether such debts or liabilities be evidenced by note, contract, open account, or otherwise, and irrespective of the Person or Persons in whose favor such debts or liabilities may, at their inception, have been, or may hereafter be, created, or the manner in which they have been, or may hereafter be, acquired by the applicable Guarantor or Guarantors. The Guarantor Claims shall include, without limitation, all rights and claims of any one or both of the Guarantors against the Class B Member, the Company or any of the Subsidiaries (arising as a result of subrogation or otherwise) as a result of payment of all or a portion of the Guaranteed Obligations by any Guarantor or the Guarantors. Until the Redemption Price shall have been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty), no Guarantor shall receive or collect, directly or indirectly, from e Class B Member, the Company, any of the Subsidiaries or any other Person obligated to the Class A Member any amount upon the Guarantor Claims.

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

Section 4.3           Payments Held in Trust. Notwithstanding anything to the contrary contained in this Guaranty, in the event that any Guarantor should receive any funds, payments, claims and/or distributions which are prohibited by this Guaranty, such Guarantor agrees to hold in trust for the Class A Member an amount equal to the amount of all funds, payments, claims and/or distributions so received and not previously paid to the Class A Member, and agrees that it shall have absolutely no dominion over the amount of such funds, payments, claims and/or distributions so received except to pay such funds, payments, claims and/or distributions promptly to the Class A Member, and such Guarantor covenants promptly to pay the same to the Class A Member.

Section 4.4           Liens Subordinate. Each Guarantor agrees that any liens, security interests, judgment liens, charges or other encumbrances upon the assets of the Class B Member, the Company or any of the Subsidiaries securing payment of the Guarantor Claims shall be and remain inferior and subordinate to any liens, security interests, judgment liens, charges or other encumbrances upon such Person’s assets securing payment of the Guaranteed Obligations, regardless of whether such encumbrances in favor of any Guarantor or the Class A Member presently exist or are hereafter created or attach. Without the prior written consent of the Class A Member, until the Redemption Price shall have been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty), no Guarantor shall (i) exercise or enforce any creditor’s rights it may have against the Class B Member, the Company or any of the Subsidiaries, or (ii) foreclose, repossess, sequester or otherwise take steps or institute any action or proceedings (judicial or otherwise, including, without limitation, the commencement of, or the joinder in, any liquidation, bankruptcy, rearrangement, debtor’s relief or insolvency proceeding) to enforce any liens, mortgages, deeds of trust, security interests, collateral rights, judgments or other encumbrances on the assets of the Class B Member, the Company or any of the Subsidiaries held by any Guarantor.

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ARTICLE 5
COVENANTS

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

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

(b)          “IFRS” shall mean the International Financial Reporting Standards.

(c)          “Liquid Assets” shall mean any of the following, but only to the extent owned individually, free of all security interests, liens, pledges, charges or any other encumbrance: (a) cash (excluding proceeds of the Properties that have not been distributed by the Company), (b) certificates of deposit (with a maturity of two years or less) issued by, or savings account with, any Approved Bank or other bank or other financial institution reasonably acceptable to the Class A Member, (c) marketable securities listed on a national or international exchange reasonably acceptable to the Class A Member (it being understood, without limitation of the foregoing, that the New York Stock Exchange and NASDAQ shall be deemed acceptable to the Class A Member), marked to market, (d) U.S. Obligations or (e) aggregate availability under unencumbered, unfunded capital commitments that any Guarantor may unconditionally draw from any of its partners.

(d)          “Net Worth” shall mean, as of a given date, (i) a Person’s total assets as of such date (without regard to the Properties or any equity therein) less (ii) such Person’s total liabilities as of such date (exclusive of any liability under the Mortgage Loan Documents), determined in accordance with GAAP or IFRS.

Section 5.2          Covenants. Until the Redemption Price and the Guaranteed Obligations have been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty), Guarantors shall collectively and not individually maintain (x) an aggregate Net Worth of not less than $250,000,000.00 (the “Net Worth Threshold”) and (y) aggregate Liquid Assets of not less than $20,000,000.00 (the “Liquid Assets Threshold”).

Section 5.3          Intentionally Omitted.

Section 5.4          Financial Statements. Each Guarantor shall deliver to the Class A Member:

(a)          within 120 days after the end of each fiscal year of such Guarantor, a complete copy of such Guarantor’s annual financial statements in the form delivered to such guarantor’s limited partners, together with a certificate of the general partner of such Guarantor certifying that, to the best of the signer’s knowledge, such annual financial statements fairly present the financial condition and results of the operations of such Guarantor;

(b)          within 90 days after the end of each fiscal quarter of such Guarantor, financial statements in the form delivered to such Guarantor’s limited partners, together with a certificate of the general partner of such Guarantor certifying that, to the best of the signer’s

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knowledge, such quarterly financial statements fairly present the financial condition and results of the operations of such Guarantor in a manner consistent with GAAP (subject to year-end adjustments) or IFRS; and

(c)          20 days after request by the Class A Member, such other financial information with respect to such Guarantor as the Class A Member may reasonably request.

(d)          No individual Guarantor shall have any obligation to deliver financial statements under this Guaranty.

ARTICLE 6
MISCELLANEOUS

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

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

If to the Class A
Member:	c/o Goldman Sachs Realty Management, L.P.
	6011 Connection Drive
	Irving, Texas 75039
	Attn:  Greg Fay
	Facsimile No.:  (972) 368-3699
	Telephone No.:  (972) 368-2743

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with copies to:	Whitehall Street Global Real Estate Limited Partnership 2007
	c/o Goldman, Sachs & Co.
	200 West Street
	New York, New York 10282
	Attn:  Chief Financial Officer
	Facsimile No.:  (212) 357-5505
	Telephone No.: (212) 902-5520
and:	Sullivan & Cromwell LLP
	125 Broad Street
	New York, New York 10004
	Attention:  Anthony J. Colletta, Esq.
	Facsimile No. (212) 291-9029
If to Guarantors:	c/o American Realty Capital
	405 Park Avenue
	New York, New York 10022
	Attn: Jon Mehlman
	Facsimile No.:  (212) 421-5799
	Telephone No.: (646) 626-8857
with a copy to:	c/o American Realty Capital
	405 Park Avenue
	New York, New York 10022
	Attn: Michael Ead
	Facsimile No.:  (212) 421-5799
	Telephone No.: (646) 381-0604

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

Section 6.3           Governing Law; Jurisdiction; Service of Process. (a) THIS GUARANTY WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY EACH GUARANTOR AND ACCEPTED BY THE CLASS A MEMBER IN THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION RELATED HERETO, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS GUARANTY AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE

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UNITED STATES OF AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH GUARANTOR HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS GUARANTY AND/OR THE OTHER TRANSACTION DOCUMENTS, AND THIS GUARANTY AND THE OTHER TRANSACTION DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST THE CLASS A MEMBER OR ANY GUARANTOR ARISING OUT OF OR RELATING TO THIS GUARANTY MAY AT THE CLASS A MEMBER’S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND EACH GUARANTOR WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND EACH GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. EACH GUARANTOR AGREES THAT SERVICE OF PROCESS UPON SUCH GUARANTOR AT THE ADDRESS FOR SUCH GUARANTOR SET FORTH HEREIN AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO SUCH GUARANTOR IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON SUCH GUARANTOR IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. EACH GUARANTOR (I) SHALL GIVE PROMPT NOTICE TO THE CLASS A MEMBER OF ANY CHANGE IN THE ADDRESS FOR SUCH GUARANTOR SET FORTH HEREIN, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE AN AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE AN AUTHORIZED AGENT IF SUCH GUARANTOR CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF THE CLASS A MEMBER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY GUARANTOR IN ANY OTHER JURISDICTION.

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

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

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

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

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

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

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

Section 6.11         Entirety. THIS GUARANTY EMBODIES THE FINAL, ENTIRE AGREEMENT OF GUARANTORS AND THE CLASS A MEMBER WITH RESPECT TO GUARANTORS’ GUARANTY OF THE GUARANTEED OBLIGATIONS AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF. THIS GUARANTY IS INTENDED BY GUARANTORS AND THE CLASS A MEMBER AS A FINAL AND COMPLETE EXPRESSION OF THE TERMS OF THE GUARANTY, AND NO COURSE OF DEALING BETWEEN GUARANTORS AND THE CLASS A MEMBER, NO COURSE OF PERFORMANCE, NO TRADE PRACTICES AND NO EVIDENCE OF

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PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE SHALL BE USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS GUARANTY. THERE ARE NO ORAL AGREEMENTS BETWEEN GUARANTORS AND THE CLASS A MEMBER.

Section 6.12         Waiver of Right To Trial By Jury. EACH GUARANTOR AND THE CLASS A MEMBER EACH HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS GUARANTY, THE OPERATING AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY EACH GUARANTOR AND THE CLASS A MEMBER 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 PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE OTHER PARTIES.

Section 6.13         Cooperation. Each Guarantor acknowledges that the Class A Member and its successors and assigns may (subject to Section 9.2 of the Operating Agreement) (i) sell this Guaranty and the other Transaction Documents and/or the Class A Member’s Interest to one or more investors, (ii) deposit this Guaranty and the other Transaction Documents with a trust, which trust may sell certificates to investors evidencing an ownership interest in the trust assets, or (iii) otherwise sell the Class A Member’s Interest or one or more interests therein to investors (the transactions referred to in clauses (i) through (iii) are hereinafter each referred to as “Secondary MarketTransaction”). Each Guarantor shall at no cost to any Guarantor, cooperate with the Class A Member in effecting any such Secondary Market Transaction and shall provide (or cause the Class B Member, the Company and/or the Subsidiaries to provide) such information and materials as may be reasonably requested by the Class A Member in connection with such Secondary Market Transaction.

Section 6.14         Reinstatement in Certain Circumstances. If at any time any payment of the Class A Return, the Unrecovered Capital or any other amount payable by the Company or the Class B Member under the Operating Agreement or the other Transaction Documents is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Company or the Class B Member or otherwise, Guarantors’ obligations hereunder with respect to such payment shall be reinstated as though such payment had been due but not made at such time.

Section 6.15         Exculpation of Certain Persons. Notwithstanding anything to the contrary contained in this Guaranty or any other Transaction Document, no direct or indirect shareholder, partner, member, principal, Affiliate (other than the Class B Member and the Company), employee, officer, trustee, director, agent or other representative of a Guarantor and/or of any of its Affiliates (each, a “Related Party”) shall have any personal liability for, nor

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be joined as party to, any action with respect to payment, performance or discharge of any covenants, obligations, or undertakings of any Guarantor under this Guaranty, and by acceptance hereof, the Class A Member for itself and its successors and assigns irrevocably waives any and all right to sue for, seek or demand any such damages, money judgment, deficiency judgment or personal judgment against any Related Party under or by reason of or in connection with this Guaranty; except that any Related Party that is a party to any Transaction Document or any other separate written guaranty, indemnity or other agreement given by such Related Party in connection with the Investment shall remain fully liable therefor and the foregoing provisions shall not operate to limit or impair the liabilities and obligations of such Related Parties or the rights and remedies of the Class A Member thereunder.

Section 6.16        Gender; Number; General Definitions. Unless the context clearly indicates a contrary intent or unless otherwise specifically provided herein, (a) words used in this Guaranty may be used interchangeably in the singular or plural form, (b) any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, (c) the word “the Class A Member” shall mean “the Class A Member and any subsequent holder of the Class A Member’s Interest”, (d) the word “Properties” shall include any portion of any of the Properties and any interest therein, and (e) the phrases “attorneys’ fees”, “legal fees” and “counsel fees” shall include any and all attorneys’, paralegal and law clerk fees and disbursements, including, but not limited to, fees and disbursements at the pre-trial, trial and appellate levels, incurred or paid by the Class A Member in protecting its interest in the Company (including any Protective Capital advances by the Class A Member) and/or in enforcing its rights hereunder.

Section 6.17        Joint and Several. The obligations of each Guarantor hereunder are joint and several.

Section 6.18        Certain California State Specific Provisions.

(a)          To the extent California law applies, nothing herein shall be deemed to limit the right of the Class A Member to recover in accordance with California Code of Civil Procedure Section 736 (as such Section may be amended from time to time), any costs, expenses, liabilities or damages, including reasonable attorneys’ fees and costs, incurred by the Class A Member and arising from any covenant, obligation, liability, representation or warranty contained in any indemnity agreement given to the Class A Member, or any order, consent decree or settlement relating to the cleanup of Hazardous Substances (as defined in the Environmental Indemnity Agreement) or any other “environmental provision” (as defined in such Section 736) relating to any Property or any portion thereof.

(b)          To the extent California law applies, in addition to and not in lieu of any other provisions of this Guaranty (provided, however, that in the case of any conflict or inconsistency between the provisions of this Section 6.18(b) and the other provisions of this Guaranty as to any subject matter described in this Section 6.18(b), such other provisions shall control), each Guarantor represents, warrants and covenants as follows:

(c)          The obligations of each Guarantor under this Guaranty shall be performed without demand by the Class A Member and shall be unconditional irrespective of the genuineness, validity, regularity or enforceability of any of the Operating Agreement or any of

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the other Transaction Documents, and without regard to any other circumstance which might otherwise constitute a legal or equitable discharge of a surety or a guarantor. Each Guarantor hereby waives any and all benefits and defenses under California Civil Code Section 2810 and agrees that by doing so such Guarantor shall be liable even if neither the Company nor the Class B Member had no liability at the time of execution of the Transaction Documents, or thereafter ceases to be liable. Each Guarantor hereby waives any and all benefits and defenses under California Civil Code Section 2809 and agrees that by doing so such Guarantor’s liability may be larger in amount and more burdensome than that of the Company or any of its Subsidiaries. Each Guarantor hereby waives the benefit of all principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms of this Guaranty and agrees that such Guarantor’s obligations shall not be affected by any circumstances, whether or not referred to in this Guaranty which might otherwise constitute a legal or equitable discharge of a surety or a guarantor. Each Guarantor hereby waives the benefits of any right of discharge under any and all statutes or other laws relating to guarantors or sureties and any other rights of sureties and guarantors thereunder.

(d)          In accordance with Section 2856 of the California Civil Code, each Guarantor hereby waives all rights and defenses arising out of an election of remedies by the Class A Member even though that election of remedies, such as a nonjudicial foreclosure with respect to security for guaranteed obligations, has destroyed or otherwise impaired such Guarantor’s rights of subrogation and reimbursement against the principal by the operation of Section 580d of the California Code of Civil Procedure or otherwise. Each Guarantor hereby authorizes and empowers the Class A Member to exercise, in its sole and absolute discretion, any right or remedy, or any combination thereof, which may then be available, since it is the intent and purpose of each Guarantor that the obligations under this Guaranty shall be absolute, independent and unconditional under any and all circumstances. Specifically, and without in any way limiting the foregoing, each Guarantor hereby waives any rights of subrogation, indemnification, contribution or reimbursement arising under Sections 2846, 2847, 2848 and 2849 of the California Civil Code or any other right of recourse to or with respect to the Company or any of its Subsidiaries, any general partner, member or other constituent of the Company or any of its Subsidiaries, any other person obligated to the Class A Member with respect to the matters set forth herein, or the assets or property of any of the foregoing until the Redemption Price has been paid in full and all obligations of the Company and its Affiliates under the Transaction Documents have been fully performed, and there has expired the maximum possible period thereafter during which any payment made by the Company or others to the Class A Member with respect to such obligations could be deemed a preference under the United States Bankruptcy Code. In connection with the foregoing, subject to the foregoing limitations, each Guarantor expressly waives any and all rights of subrogation against the Company and each of its Subsidiaries, and each Guarantor hereby waives any rights to enforce any remedy which the Class A Member may have against the Company or any of its Subsidiaries.

(e)          In addition to and without in any way limiting the foregoing, each Guarantor hereby subordinates any and all indebtedness of the Company and each Subsidiary now or hereafter owed to any Guarantor to all the indebtedness of the Company or any Subsidiary to the Class A Member and agrees with the Class A Member that until the Redemption Price has been paid in full and all obligations owed to the Class A Member under

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the Transaction Documents have been fully performed, and there has expired the maximum possible period thereafter during which any payment made by the Company or others to the Class A Member with respect to such obligations could be deemed a preference under the United States Bankruptcy Code, no Guarantor shall demand or accept any payment of principal or interest from the Company or any of its Subsidiaries or claim any offset or other reduction of any Guarantor’s obligations hereunder because of any such indebtedness. If any amount shall nevertheless be paid to an Guarantor by the Company or any Subsidiary or another guarantor prior to payment in full of the Redemption Price, such amount shall be held in trust for the benefit of the Class A Member and shall forthwith be paid to the Class A Member to be credited and applied to the Unrecovered Capital. Further, no Guarantor shall have any right of recourse against the Class A Member by reason of any action the Class A Member may take or omit to take under the provisions of this Guaranty or under the provisions of any of the Transaction Documents. Without limiting the generality of the foregoing, each Guarantor hereby waives, to the fullest extent permitted by law, diligence in collecting the obligations owed to the Class A Member under the Transaction Documents, presentment, demand for payment, protest, all notices with respect to the Operating Agreement, this Guaranty, or any other Transaction Document which may be required by statute, rule of law or otherwise to preserve the Class A Member’s rights against such Guarantor under this Guaranty, including, but not limited to, notice of acceptance, notice of any amendment of the Transaction Documents, notice of the occurrence of any default, notice of intent to accelerate, notice of acceleration, notice of dishonor, notice of foreclosure, notice of protest, and notice of the incurring by the Company or any of its Subsidiaries of any obligation or indebtedness.

(f)          Without limiting the foregoing, but subject to the same limitations set forth above, each Guarantor waives (i) all rights of subrogation, reimbursement, indemnification, and contribution and any other rights and defenses that are or may become available to any Guarantor by reason of California Civil Code Sections 2787 to 2855, inclusive, including any and all rights or defenses such Guarantor may have by reason of protection afforded to the Company or any of its Subsidiaries with respect to any of the obligations of any Guarantor under this Guaranty by reason of a nonjudicial foreclosure or pursuant to the antideficiency or other laws of the State of California limiting or discharging the obligations of the Company or any of its Subsidiaries. Without limiting the generality of the foregoing, each Guarantor hereby expressly waives any and all benefits under California Code of Civil Procedure Section 726 (which Section, if such Guarantor had not given this waiver, among other things, would otherwise require the Class A Member to exhaust all of its security before a personal judgment could be obtained for a deficiency).

(g)          Likewise, each Guarantor waives (i) any and all rights and defenses available to such Guarantor under California Civil Code Sections 2899 and 3433; and (ii) any rights or defenses such Guarantor may have with respect to its obligations as a guarantor by reason of any election of remedies by the Class A Member. These rights and defenses include, but are not limited to, any rights or defenses based upon Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure.

[NO FURTHER TEXT ON THIS PAGE.]

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

GUARANTORS:
AMERICAN REALTY CAPITAL HOSPITALITY OPERATING PARTNERSHIP, L.P.
By:	American Realty Capital Hospitality Trust, Inc., its general partner
	By:
		Name:  Jonathan Mehlman
		Title: CEO and President
American Realty Capital Hospitality Trust, Inc.
By:
	Name:  Jonathan Mehlman
	Title: CEO and President

[Signatures continue on next page]

Signature Page to Bad Boy Guaranty – Portfolio II

NICHOLAS S. SCHORCSH

Name: Nicholas S. Schorsch  

[Signatures continue on next page]

Signature Page to Bad Boy Guaranty – Portfolio II

WILLIAM M. KAHANE

Name: William M. Kahane  

[Signatures continue on next page]

Signature Page to Bad Boy Guaranty – Portfolio II

EDWARD M. WEIL, JR.

Name:  Edward M. Weil, Jr.

[Signatures continue on next page]

Signature Page to Bad Boy Guaranty – Portfolio II

PETER M. BUDKO

Name:  Peter M. Budko

Signature Page to Bad Boy Guaranty – Portfolio II

EX-10.30

Exhibit 10.30

ENVIRONMENTAL INDEMNITY AGREEMENT

THIS ENVIRONMENTAL INDEMNITY AGREEMENT (this “Agreement”) is made as of February 27, 2015, by AMERICAN REALTY CAPITAL HOSPITALITY OPERATING PARTNERSHIP, L.P., a Delaware limited partnership, having an office at c/o American Realty Capital, 405 Park Avenue, New York, New York 10022, AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC., a Maryland corporation, having an office at c/o American Realty Capital, 405 Park Avenue, New York, New York 10022, Nicholas S. Schorsch, an individual, William M. Kahane, an individual, Edward M. Weil, Jr., an individual, and Peter M. Budko, an individual (each of the foregoing, an “Indemnitor”, and together with their respective permitted successors and assigns, collectively, “Indemnitors”), in favor of W2007 EQUITY INNS SENIOR MEZZ, LLC, a Delaware limited liability company, having an office at c/o Goldman Sachs Realty Management, L.P., 6011 Connection Drive, Irving, Texas 75039 (together with its successors and/or assigns, “Indemnitee”) and the other Indemnified Parties (defined below).

RECITALS

A.           Indemnitee is prepared to make an investment (the “Investment”) in ARC Hospitality Portfolio I Holdco, LLC, a Delaware limited liability company (the “Company”), in the amount of $347,298,021.00 as described in the Amended and Restated Limited Liability Company Agreement of the Company, of even date herewith, among Indemnitee, American Realty Capital Hospitality Portfolio Member, LP, a Delaware limited partnership (the “Class B Member”), and William G. Popeo, as special member (as the same may be amended, modified or supplemented from time to time, the “Operating Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Operating Agreement.

B.           Each Indemnitor acknowledges receipt and approval of copies of the Operating Agreement and the other Transaction Documents.

C.           Each Indemnitor acknowledges that it owns, either directly or indirectly, a beneficial interest in the Class B Member and, as a result of such beneficial interest, will receive substantial economic and other benefits from Indemnitee making the Investment in the Company.

D.           Indemnitee is unwilling to make the Investment or to enter into the Operating Agreement unless Indemnitors agree to provide the indemnification, representations, warranties, covenants and other matters described in this Agreement for the benefit of the Indemnified Parties.

E.           Indemnitors are entering into this Agreement to induce Indemnitee to make the Investment, enter into the Operating Agreement and become a Member of the Company.

AGREEMENT

NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Indemnitors hereby represent, warrant, covenant and agree for the benefit of the Indemnified Parties as follows:

1.          Environmental Covenants. Each Indemnitor covenants and agrees that (a) all uses and operations on or of each Property, whether by any of the Indemnitors or any other Person, shall be in compliance with all Environmental Laws and permits issued pursuant thereto; (b) there shall be no Releases of Hazardous Substances in, on, under or from any Property (except in compliance with all applicable Environmental Laws and with permits issued pursuant thereto); (c) there shall be no Hazardous Substances in, on or under any Property, except those that are both (i) in compliance with all applicable Environmental Laws and with any necessary permits issued pursuant thereto and (ii) fully disclosed to Indemnitee in writing; (d) Indemnitors shall keep each Property free and clear of all liens and other encumbrances imposed pursuant to any Environmental Law, whether due to any act or omission of any of the Indemnitors or any other Person (the “Environmental Liens”); provided, that after prior notice to Indemnitee, Indemnitors, at their own expense, may contest the amount or validity of any Environmental Liens in accordance with the terms of the Senior Loan Documents; (e) Indemnitors shall, at their sole cost and expense, fully and in a timely manner cooperate in all activities pursuant to Section 2 of this Agreement, including, but not limited to, providing all relevant information and making knowledgeable Persons available for interviews upon reasonable advance written request and at reasonable times and places; (f) Indemnitors shall, at their sole cost and expense, perform any environmental site assessment or other investigation of environmental conditions in connection with any Property, pursuant to any reasonable written request of Indemnitee made in consideration of any environmental event or condition reasonably believed by Indemnitee to have occurred or to exist at any Property (which request shall briefly describe the basis for Indemnitee’s belief) (including, but not limited to, sampling, testing and analysis of soil, water, air, building materials and other materials and substances whether solid, liquid or gas, such assessment or investigation to be in scope and nature appropriate to the suspected event or condition) that would be reasonably expected to have an adverse effect on any Property or on the business or condition (financial or otherwise) of the Class B Member, the Company or any of its Subsidiaries, and share with Indemnitee the reports and other results thereof, and Indemnitee and the other Indemnified Parties shall be entitled to rely on such reports and other results thereof; (g) Indemnitors shall, at their sole cost and expense, comply with all reasonable written requests of Indemnitee to (i) effectuate any required Remediation of any condition (including, but not limited to, a Release of a Hazardous Substance) in, on, under or from any Property; (ii) comply with any applicable Environmental Law; and/or (iii) comply with any directive from any Governmental Authority having jurisdiction over the applicable Property requiring any action relating to any environmental condition in, on, under, from or migrating toward such Property; provided, that with respect to clauses (g)(ii) and (iii), after notice to Indemnitee, Indemnitors may, at their own expense, contest the applicability of any Environmental Law in accordance with the terms of the Senior Loan Documents; (h) none of the Indemnitors shall do or knowingly allow any tenant or other user of any Property to do any act that is in non-compliance with any applicable Environmental Law, impairs or may impair the value of any Property, is contrary to any requirement of any insurer, constitutes a public or private nuisance, constitutes waste or

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violates any covenant, condition, agreement or easement applicable to any Property; (i) if following the date hereof, it is determined that any Property contains paint containing more than 0.5% lead by dry weight (“Lead Based Paint”), present in violation of any Environmental Law, Indemnitors agree, at their sole cost and expense and within forty-five (45) days thereafter, to cause to be prepared an assessment report describing the location and condition of the Lead Based Paint (a “Lead Based Paint Report”), prepared by an expert, and in form, scope and substance, acceptable to Indemnitee; (j) if following the date hereof, it is determined that any Property contains asbestos or asbestos-containing material (“Asbestos”) present in violation of any Environmental Law, the Indemnitors shall, at their sole cost and expense and within forty-five (45) days thereafter, cause the Company to cause to be prepared an assessment report describing the location and condition of the Asbestos (an “Asbestos Report”), prepared by an expert, and in form, scope and substance, acceptable to Indemnitee; (k) if a Lead Based Paint Report or Asbestos Report is required to be prepared pursuant to clauses (i) or (j) of this Section 1, on or before thirty (30) days following the preparation of such report, Indemnitors shall, at their sole cost and expense, develop and implement an operations and maintenance plan to manage such condition(s) on the applicable Property, which plan shall be prepared by an expert, and be in form, scope and substance, acceptable to Indemnitee (together with any Lead Based Paint Report and/or Asbestos Report, as applicable, the “O&M Plan”), and if an O&M Plan has been prepared prior to the date hereof, Indemnitors agree to diligently and continually carry out (or cause to be carried out) the provisions thereof, it being understood and agreed that compliance with the O&M Plan shall require or be deemed to require, without limitation, the proper preparation and maintenance of all records, papers and forms required under the Environmental Laws; (l) in the event that any inspection or audit reveals the presence of Toxic Mold in the indoor air of any Property at concentrations for which any Legal Requirement applicable to such Property requires removal thereof by remediation professionals, Indemnitors shall promptly remediate the Toxic Mold and perform post-remedial clearance sampling in accordance with said Legal Requirement and applicable Environmental Law, following which abatement of the Toxic Mold, Indemnitors shall prepare and implement an Operations and Maintenance Plan for Toxic Mold and Moisture reasonably acceptable to Indemnitee and in accordance with the guidelines issued by the National Multi Housing Council; and (m) Indemnitors shall promptly notify Indemnitee in writing of (A) any presence or Release or threatened Release of Hazardous Substances in, on, under, from or migrating towards any Property in material violation of, or as might be reasonably expected to result in material liability under, any Environmental Law; (B)  material non-compliance with any Environmental Laws related in any way to any Property; (C) any actual or threatened Environmental Lien; (D) any required or proposed Remediation of environmental conditions relating to any Property; and/or (E) any written or oral notice or other communication of which any Indemnitor becomes aware from any source whatsoever (including, but not limited to, any Governmental Authority) relating to a material or unlawful Release, or threatened Release, of Hazardous Substances or Remediation thereof, possible liability of any Person pursuant to any Environmental Law concerning any Property, other environmental conditions in connection with any Property or any actual or threatened administrative or judicial proceedings in connection with any environmental matters referred to in this Agreement.

2.          Indemnified Rights/Cooperation and Access. In the event the Indemnified Parties have a reasonable basis to believe that an environmental hazard exists on any Property that does not (a) endanger any tenants or other occupants of such Property or their guests or the

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general public, or (b) materially and adversely affect the value of such Property, upon reasonable written notice from the Indemnitee, describing in reasonable detail the basis for such belief, Indemnitors shall, at Indemnitors’ sole cost and expense, promptly cause an engineer or consultant reasonably satisfactory to the Indemnified Parties to conduct an environmental assessment or audit of such hazard (the scope of which shall be determined in the reasonable discretion of the Indemnified Parties) and take any samples of soil, groundwater or other water, air or building materials or any other invasive testing reasonably determined by Indemnitee to be required to assess such condition and promptly deliver to Indemnitee the results of any such assessment, audit, sampling or other testing; provided, however, if such results are not delivered to Indemnitee within a reasonable period or if the Indemnified Parties have reason to believe that an environmental hazard exists on such Property that endangers any tenant or other occupant of such Property or their guests or the general public or may materially and adversely affect the value of such Property, upon reasonable notice to Indemnitors, the Indemnified Parties and any other Person designated by the Indemnified Parties, including, but not limited to, any receiver, any representative of any Governmental Authority and/or any environmental consultant, shall have the right, but not the obligation, to enter upon such Property at all reasonable times (subject to the rights of tenants) to assess any and all aspects of the environmental condition of such Property and its use, including, but not limited to, conducting any environmental assessment or audit (the scope of which shall be determined in the sole, but good faith discretion of the Indemnified Parties) and taking samples of soil, groundwater or other water, air or building materials and reasonably conducting other invasive testing, reasonably determined by the Indemnified Parties to be required to assess the condition. Indemnitors shall cooperate with and provide, upon advance notice to each of them, the Indemnified Parties and any such Person designated by the Indemnified Parties with access to each Property.

3.          Indemnification. Indemnitors covenant and agree, at their sole cost and expense, to protect, defend, indemnify, release and hold Indemnified Parties harmless from and against any and all Losses (defined below) imposed upon, or incurred by, or asserted against, any Indemnified Parties and directly or indirectly arising out of or relating to any one or more of the following: (a) any presence of any Hazardous Substances in, on, above or under any Property; (b) any past, present or threatened Release of Hazardous Substances in, on, above, under or from any Property; (c) any activity by any of the Indemnitors, any Person affiliated with any of the Indemnitors and/or any tenant or other user of any Property in connection with any actual, proposed or threatened use, treatment, storage, holding, existence, disposition or other Release, generation, production, manufacturing, processing, refining, control, management, abatement, removal, handling, transfer or transportation to or from such Property of any Hazardous Substances at any time located in, under, on or above such Property; (d) any activity by any of the Indemnitors, any Person affiliated with any of the Indemnitors and/or any tenant or other user of any Property in connection with any actual or proposed Remediation of any Hazardous Substances at any time located in, under, on or above such Property, whether or not such Remediation is voluntary or pursuant to court or administrative order, including, but not limited to, any removal, remedial or corrective action; (e) any past, present or threatened non-compliance or violation of any Environmental Law (or of any permit issued pursuant to any Environmental Law) in connection with any Property or operations thereon, including, but not limited to, any failure by any of the Indemnitors, any Person affiliated with any of the Indemnitors and/or any tenant or other user of such Property to comply with any order of any Governmental Authority in connection with any Environmental Laws; (f) the imposition,

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recording or filing or the threatened imposition, recording or filing of any Environmental Lien encumbering any Property; (g) any administrative processes or proceedings or judicial proceedings in any way connected with any matter addressed in this Agreement; (h) [intentionally omitted]; (i) any acts of any of the Indemnitors, any Person affiliated with any of the Indemnitors and/or any tenant or other user of any Property in arranging for the disposal or treatment, or arranging with a transporter for transport for the disposal or treatment, of Hazardous Substances in, on, above or under any Property at any facility or incineration vessel containing such or similar Hazardous Substances; (j) any acts of any of the Indemnitors, any Person affiliated with any of the Indemnitors and/or any tenant or other user of any Property in accepting any Hazardous Substances in, on, above or under any Property for transport to disposal or treatment facilities, incineration vessels or sites from which there is a Release or a threatened Release of any Hazardous Substance which causes the incurrence of costs for Remediation; (k) any personal injury, wrongful death or property or other damage arising under any statutory or common law or tort law theory, in each case, with respect to environmental matters concerning any Property, including, but not limited to, damages assessed for private or public nuisance or for the conducting of an abnormally dangerous activity on or near any Property; and (l) any misrepresentation or inaccuracy in any representation or warranty contained in this Agreement or material breach or failure to perform any covenants or other obligations pursuant to this Agreement.

Notwithstanding any provisions of this Agreement to the contrary, (x) the foregoing indemnity shall not apply to Losses caused solely by the gross negligence or willful misconduct of any Indemnified Party and (y) the foregoing indemnity shall only apply to Losses resulting from any circumstance, condition, action or event first occurring after the date hereof (subject to the other limitations set forth herein).

4.          Duty to Defend and Attorneys’ and Other Fees and Expenses. Upon written request by any Indemnified Party, Indemnitors shall defend such Indemnified Party(ies) against any claim for which indemnification is required hereunder (if requested by any Indemnified Party, in the name of the Indemnified Party), by attorneys and other professionals reasonably approved by the Indemnified Parties. Notwithstanding the foregoing, if the defendants in a claim include an Indemnitor (or any affiliate of an Indemnitor) and any Indemnified Party shall have reasonably concluded that (A) there are legal defenses available to it that are materially different from or in addition to those available to such Indemnitor (or such Affiliate of such Indemnitor), or (B) the use of the attorneys engaged by such Indemnitor (or such affiliate of Indemnitor) would present such attorneys with a conflict of interest, Indemnified Parties may, in their sole and absolute discretion, engage their own attorneys and other professionals to defend or assist them, and, at the option of Indemnified Parties, their attorneys shall control the resolution of any claim or proceeding; provided that no compromise or settlement shall be entered without Indemnitors’ consent, which consent shall not be unreasonably withheld. Upon demand, Indemnitors shall pay or, in the sole and absolute discretion of the Indemnified Parties, reimburse, the Indemnified Parties for the payment of the reasonable fees and disbursements of attorneys, engineers, environmental consultants, laboratories and other professionals in connection therewith.

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5.            Definitions. As used in this Agreement, the following terms shall have the following meanings:

The term “Environmental Laws” means any present and future federal, state and local laws, statutes, ordinances, rules, regulations and the like, as well as common law, relating to protection of human health or the environment, relating to Hazardous Substances and/or relating to liability for or costs of other actual or threatened danger to human health or the environment. The term “Environmental Laws” includes, but is not limited to, the following statutes, as amended, any successor thereto, and any regulations promulgated pursuant thereto, and any state or local statutes, ordinances, rules, regulations and the like addressing similar issues: the Comprehensive Environmental Response, Compensation and Liability Act; the Emergency Planning and Community Right-to-Know Act; the Hazardous Substances Transportation Act; the Resource Conservation and Recovery Act (including, but not limited to, Subtitle I relating to underground storage tanks); the Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking Water Act; the Occupational Safety and Health Act; the Federal Water Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the National Environmental Policy Act; the River and Harbors Appropriation Act; and those relating to Lead Based Paint. The term “Environmental Laws” also includes, but is not limited to, any present and future federal, state and local laws, statutes, ordinances, rules, regulations and the like, as well as common law, conditioning transfer of property upon a negative declaration or other approval of a Governmental Authority of the environmental condition of any Property; requiring notification or disclosure of Releases of Hazardous Substances or other environmental condition of a property to any Governmental Authority or other Person, whether or not in connection with any transfer of title to or interest in such property; imposing conditions or requirements in connection with environmental permits or other environmental authorization for lawful activity; relating to nuisance, trespass or other causes of action related to the physical condition or use of any Property; and relating to wrongful death, personal injury or property or other damage in connection with any physical condition or use of any Property.

The term “Hazardous Substances” includes, but is not limited to, any and all substances (whether solid, liquid or gas) defined, listed or otherwise classified as pollutants, hazardous wastes, hazardous substances, hazardous materials, extremely hazardous wastes or words of similar meaning or regulatory effect under any present or future Environmental Laws or that may have a negative impact on human health or the environment, including, but not limited to, petroleum and petroleum products, asbestos and asbestos-containing materials, polychlorinated biphenyls, lead, and lead-containing materials, radon, radioactive materials, flammables and explosives, Lead Based Paint and Toxic Mold. Notwithstanding anything to the contrary contained herein, the term “Hazardous Substances” will not include substances which otherwise would be included in such definition but which are of kinds and in amounts ordinarily and customarily used or stored in similar properties, including, without limitation substances used for the purposes of cleaning, maintenance, or operations, substances typically used in construction, and typical products used in properties like the Properties, and which are otherwise in compliance with all Environmental Laws. Furthermore, the term “Hazardous Substances” will not include substances which otherwise would be included in such definition but which are of kinds and in amounts ordinarily and customarily stocked and sold by tenants operating retail

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businesses of the types operated by the tenants of any Property and which are otherwise in compliance with all Environmental Laws.

The term “Indemnified Parties” means Indemnitee, its affiliates, Persons who may hold or acquire or will have held a full or partial interest in Indemnitee’s Interest in accordance with Section 9.2 of the Operating Agreement (including, but not limited to, Investors (as hereinafter defined) and/or prospective Investors, as well as custodians, trustees and other fiduciaries who hold or have held a full or partial interest in the Investment for the benefit of third parties) as well as the respective directors, officers, shareholders, partners, employees, agents, servants, representatives, contractors, subcontractors, affiliates, subsidiaries, successors and assigns of any and all of the foregoing, and any successors by merger, consolidation or acquisition of all or a substantial portion of Indemnitee’s assets and business.

The term “Investor” means each purchaser, transferee, assignee or investor in the Class A Member’s Interest.

The term “Legal Action” means any claim, suit or proceeding, whether administrative or judicial in nature.

The term “Losses” includes any actual losses, damages, costs, fees, expenses, claims, suits, judgments, awards, liabilities (including, but not limited to, strict liabilities), obligations, debts, diminutions in value, fines, penalties, charges, costs of Remediation (whether or not performed voluntarily), amounts paid in settlement, foreseeable and unforeseeable consequential damages, litigation costs, reasonable fees of attorneys, engineers and environmental consultants and investigation costs (including, but not limited to, costs for sampling, testing and analysis of soil, water, air, building materials and other materials and substances, whether solid, liquid or gas), of whatever kind or nature, and whether or not incurred in connection with any judicial or administrative proceedings, actions, claims, suits, judgments or awards.

The term “Indemnitor Affiliate” shall mean any Indemnitor, the Class B Member and/or any other Person that either (or both) (a) is in Control of, is Controlled by or is under common Control with (i) any Indemnitor or (ii) any general partner or managing member of, or other Person or Persons Controlling, any Indemnitor (each a “Clause (a) Person”), or (b) is either (1) a Person that owns directly or indirectly thirty-five percent (35%) or more of the direct or indirect equity interests in any Indemnitor or any other Clause (a) Person, or (2) a Person with respect to which either (or a combination) of the Indemnitors directly or indirectly owns thirty-five percent (35%) or more of the direct or indirect equity interests in such Person, or (3) a Person with respect to which any combination of Indemnitors and Clause (a) Persons own, directly or indirectly, fifty-one percent (51%) or more of the direct or indirect voting equity interests in such Person. In addition to, and without limiting, the foregoing, if a direct or indirect interest in a loan secured by direct or indirect interests in the Company or any of its Subsidiaries is held by an Indemnitor Affiliate, the related lender will be deemed an Indemnitor Affiliate unless such Indemnitor Affiliate is a Disabled Participant (as defined below) and one or more other holders of substantial interests in such loan that are not Indemnitor Affiliates control the administration of such loan and the enforcement of the rights and remedies of such lender. An Indemnitor Affiliate is a “Disabled Participant” with respect to a loan if it has no right to exercise any

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voting or other control rights with respect to such loan (other than the right to approve amendments to the material economic terms of such loan).

The term “Release” with respect to any Hazardous Substance includes, but is not limited to, any release, deposit, discharge, emission, leaking, leaching, spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing or other movement of Hazardous Substances.

The term “Remediation” includes, but is not limited to, any response, remedial, removal, or corrective action; any activity to clean up, detoxify, decontaminate, contain or otherwise remediate any Hazardous Substance; any actions to prevent, cure or mitigate any Release of any Hazardous Substance (including, with respect to Toxic Mold, providing any moisture control systems at any Property); any action to comply with any Environmental Laws or with any permits issued pursuant thereto; any inspection, investigation, study, monitoring, assessment, audit, sampling and testing or laboratory or other analysis or evaluation relating to any Hazardous Substances or to any environmental matter referred to herein.

The term “Toxic Mold” means fungi that reproduces through the release of spores or the splitting of cells or other means that may pose a risk to human health or the environment or negatively affect the value of any Property, including, but not limited to, mold, mildew, fungi, fungal spores, fragments and metabolites such as mycotoxins and microbial volatile organic compounds.

6.          Unimpaired Liability. The liability of Indemnitors under this Agreement shall in no way be limited or impaired by, and each Indemnitor hereby consents to and agrees to be bound by, any amendment or modification of the provisions of the Operating Agreement or any of the other Transaction Documents by any Indemnitor or any Person who succeeds any Indemnitor or any Person as owner of any of the Properties. In addition, the liability of Indemnitors under this Agreement shall in no way be limited or impaired by (i) any extension of the Mandatory Redemption Date or any other extension of the time for performance required by the Operating Agreement or any of the other Transaction Documents, (ii) any sale or transfer of all or part of any Property, or any sale or other assignment by any Indemnitor of its direct or indirect ownership interests in the Class B Member or the Company, (iii) except as provided herein, any exculpatory provision in the Operating Agreement or any of the other Transaction Documents, (iv) the accuracy or inaccuracy of the representations and warranties made by the Class B Member, the Company or any Indemnitor under the Operating Agreement or any of the other Transaction Documents (including this Agreement), or (v) the release of any Indemnitor or any other Person from performance or observance of any of the agreements, covenants, terms or condition contained in the Operating Agreement or any of the other Transaction Documents by operation of law, Indemnitee’s voluntary act, or otherwise.

7.          Enforcement. The Indemnified Parties may enforce the obligations of Indemnitors without first declaring a Changeover Event, provided, however, that nothing herein shall inhibit or prevent Indemnitee from declaring a Changeover Event, or exercising any other rights and remedies under the other Transaction Documents. It is not necessary for a Changeover Event to have occurred for Indemnified Parties to exercise their rights pursuant to this Agreement. Notwithstanding any provision of the Operating Agreement or any other

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Transaction Document to the contrary, the obligations of each Indemnitor pursuant to this Agreement are exceptions to any non-recourse or exculpation provision of the Operating Agreement or any other Transaction Document; and each Indemnitor expressly acknowledges and agrees that it is fully and personally liable for such obligations, and such liability is not limited to the Unrecovered Capital or the value of the Properties.

8.           Limitations on Liability of Indemnitors.

(a)          Notwithstanding anything to the contrary herein or in the other Transaction Documents, in the event of the declaration of a Changeover Event, then Indemnitors shall not have any liability hereunder for any Losses arising from any circumstance, condition, action or event first occurring after the date of the declaration of a Changeover Event and not caused by the acts of either of the Indemnitors or any other Indemnitor Affiliate; provided that (i) Indemnitors shall remain liable hereunder for any Losses to the extent arising from any action or event prior to the date of the declaration of a Changeover Event and (ii) if, following the declaration of a Changeover Event, an arbitration panel appointed pursuant to Section 12.10 of the Operating Agreement determines that such Changeover Event has not occurred pursuant to Section 3.5 of the Operating Agreement, then the Indemnitors shall continue to be fully liable for all of its obligations hereunder and for all Losses (other than any such Losses caused solely by the actions of the Indemnitee taken on behalf of the Company or any of its Subsidiaries following such declaration of a Changeover Event).

9.           Survival. The obligations and liabilities of each Indemnitor under this Agreement shall fully survive indefinitely. Notwithstanding the foregoing, the indemnification obligations of Indemnitor hereunder shall terminate three (3) years after the payment in full (or, if later, after the delivery of the Phase I environmental report described in this sentence), in accordance with the Operating Agreement and the other Transaction Documents, of the Unrecovered Capital solely as to an Property as to which at the time of such payment (or at any time thereafter) Indemnitee has been furnished a Phase I environmental report in form and substance, and from an environmental consultant, reasonably acceptable to Indemnitee, which Phase I environmental report discloses, as of the date of such repayment (or, if later, the date of the delivery thereof), no actual or threatened (A) non-compliance with or violation of applicable Environmental Laws (or permits issued pursuant to Environmental Laws) in connection with any Property or operations thereon, which has not been cured in accordance with applicable Environmental Laws, (B) Environmental Liens encumbering any Property, (C) administrative processes or proceedings or judicial proceedings concerning any environmental matter addressed in this Agreement, or (D) unlawful presence or Release of Hazardous Substances in, on, above or under any Property that has not been fully remediated as required by applicable Environmental Laws. Notwithstanding the foregoing, at any time prior to the declaration of a Changeover Event, Indemnitors shall be entitled to request and Indemnitee agrees to grant the release of any Indemnitor from its obligations hereunder so long as, following such release, the remaining Indemnitor(s) continue(s) to collectively and no individually satisfy the Net Worth Threshold and Liquid Assets Threshold (as each such term is defined in the Guarantees) (for the avoidance of doubt excluding the Net Worth and Liquid Assets of the Guarantor being released) and, in connection with any release of an Indemnitor pursuant to this Section 9, the Class A Member shall execute and deliver a release of such Indemnitor from all liability hereunder.

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10.         Interest. Any amounts payable to any Indemnified Parties under this Agreement shall become immediately due and payable on demand and, if not paid within thirty (30) days of such demand therefor, shall bear interest at the Increased Rate.

11.         Waivers.

(a)          Each Indemnitor hereby waives and relinquishes (i) any right or claim of right to cause a marshaling of any Indemnitor’s assets or to cause Indemnitee or any other Indemnified Party to attempt to enforce any other remedy before proceeding under this Agreement against any Indemnitor; (ii) all rights and remedies accorded by applicable law to indemnitors or guarantors generally, including any rights of subrogation which any Indemnitor may have, provided that the indemnity provided for hereunder shall neither be contingent upon the existence of any such rights of subrogation nor subject to any claims or defenses whatsoever which may be asserted in connection with the enforcement or attempted enforcement of such subrogation rights, including, without limitation, any claim that such subrogation rights were abrogated by any acts of Indemnitee or any other Indemnified Party; (iii) the right to assert a counterclaim, other than a mandatory or compulsory counterclaim, in any action or proceeding brought against or by Indemnitee or any other Indemnified Party; (iv) notice of acceptance hereof and of any action taken or omitted in reliance hereon; (v) presentment for payment, demand of payment, protest or notice of nonpayment or failure to perform or observe, or other proof, or notice or demand; and (vi) all homestead exemption rights against the obligations hereunder and the benefits of any statutes of limitations or repose. Notwithstanding anything to the contrary contained herein, each Indemnitor hereby agrees to postpone the exercise of any rights of subrogation until the Redemption Price shall have been paid in full.

(b)          EACH INDEMNITOR AND EACH INDEMNIFIED PARTY, BY ITS ACCEPTANCE OF THE BENEFITS HEREOF, HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND FOREVER WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST, WITH REGARD TO THIS AGREEMENT, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY EACH INDEMNITOR AND INDEMNIFIED PARTY 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 PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY EACH INDEMNITOR AND INDEMNIFIED PARTY.

12.         Subrogation. Each Indemnitor hereby agrees that it shall take any and all commercially reasonable actions, including the institution of legal action against third parties, necessary or appropriate to obtain reimbursement, payment or compensation from such Persons responsible for the presence of any Hazardous Substances at, in, on, under or near any Property or otherwise obligated by law to bear the cost. The Indemnified Parties shall be and hereby are subrogated to all of each Indemnitor’s rights now or hereafter in such claims.

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13.         Indemnitors’ Representations and Warranties. Each Indemnitor represents and warrants that:

(a)          it has the full power and authority to execute and deliver this Agreement and to perform its obligations hereunder; the execution, delivery and performance of this Agreement by such Indemnitor has been duly and validly authorized; and all requisite action has been taken by such Indemnitor to make this Agreement valid and binding upon such Indemnitor, enforceable in accordance with its terms;

(b)          its execution of, and compliance with, this Agreement is in the ordinary course of business of such Indemnitor and will not result in the breach of any term or provision of the charter, by-laws, partnership, operating or trust agreement or other governing instrument of such Indemnitor or result in the breach of any term or provision of, or conflict with or constitute a default under, or result in the acceleration of any obligation under, any agreement, indenture or loan or credit agreement or other instrument to which such Indemnitor or any Property is subject, or result in the violation of any law, rule, regulation, order, judgment or decree to which such Indemnitor or any Property is subject;

(c)          to the best of such Indemnitor’s knowledge, there is no action, suit, proceeding or investigation pending or threatened against it which, either in any one instance or in the aggregate, would be reasonably likely to result in any material adverse change in the business, operations, financial condition, properties or assets of such Indemnitor, or in any material impairment of the right or ability of such Indemnitor to carry on its business substantially as now conducted, or in any material liability on the part of such Indemnitor, or which would draw into question the validity of this Agreement or of any action taken or to be taken in connection with the obligations of such Indemnitor contemplated herein, or which would be likely to impair materially the ability of such Indemnitor to perform under the terms of this Agreement;

(d)          it does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in this Agreement;

(e)          to the best of such Indemnitor’s knowledge, no approval, authorization, order, license or consent of, or registration or filing with, any Governmental Authority or other Person, and no approval, authorization or consent of any other Person, that has not been obtained as of the execution hereof, is required in connection with this Agreement; and

(f)          this Agreement constitutes a valid, legal and binding obligation of such Indemnitor, enforceable against it in accordance with the terms hereof, subject to bankruptcy, insolvency and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

14.         No Waiver. No delay by any Indemnified Party in exercising any right, power or privilege under this Agreement shall operate as a waiver of any such privilege, power or right.

15.         Notice of Legal Actions. Each party hereto shall, within five (5) Business Days of receipt thereof, give written notice to the other parties hereto of (i) any notice, advice or other communication from any Governmental Authority or any source whatsoever with respect to the

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presence or potential presence of Hazardous Substances on, from or affecting any Property in violation of applicable Environmental Laws, and (ii) any legal action brought against such party or related to any Property, with respect to which Indemnitors may have liability under this Agreement. Such notice shall comply with the provisions of Section 16 hereof.

16.         Notices. All notices, demands, requests, consents, approvals or other communications (any of the foregoing, a “Notice”) required, permitted or desired to be given hereunder shall be in writing and shall be sent by telefax (with answer back acknowledged) or by registered or certified mail, postage prepaid, return receipt requested, or delivered by hand or by reputable overnight courier, addressed to the party to be so notified at its address hereinafter set forth, or to such other address as such party may hereafter specify in accordance with the provisions of this Section 16. Any Notice shall be deemed to have been received: (a) three (3) days after the date such Notice is mailed, (b) on the date of sending by telefax if sent during business hours on a Business Day (otherwise on the next Business Day), (c) on the date of delivery by hand if delivered during business hours on a Business Day (otherwise on the next Business Day), and (d) on the next Business Day if sent by an overnight commercial courier, in each case addressed to the parties as follows:

If to Indemnitee:	c/o Goldman Sachs Realty Management, L.P.
	6011 Connection Drive
	Irving, Texas 75039
	Attn:  Greg Fay
	Facsimile No.:  (972) 368-3699
	Telephone No.:  (972) 368-2743
with copies to:	Whitehall Street Global Real Estate Limited Partnership 2007
	c/o Goldman, Sachs & Co.
	200 West Street
	New York, New York 10282
	Attn:  Chief Financial Officer
	Facsimile No.:  (212) 357-5505
	Telephone No.: (212) 902-5520
and:	Sullivan & Cromwell LLP
	125 Broad Street
	New York, New York 10004
	Attention:  Anthony J. Colletta, Esq.
	Facsimile No. (212) 291-9029
If to
Indemnitors:	c/o American Realty Capital
	405 Park Avenue
	New York, New York 10022
	Attn: Jon Mehlman
	Facsimile No.:  (212) 421-5799
	Telephone No.: (646) 626-8857

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with a copy to:	c/o American Realty Capital
	405 Park Avenue
	New York, New York 10022
	Attn: Michael Ead
	Facsimile No.:  (212) 421-5799
	Telephone No.: (646) 381-0604

Any party may change the address to which any such Notice is to be delivered by furnishing ten (10) days’ written notice of such change to the other parties in accordance with the provisions of this Section 16. Notices shall be deemed to have been given on the date set forth above, even if there is an inability to actually deliver any Notice because of a changed address of which no Notice was given or there is a rejection or refusal to accept any Notice offered for delivery. Notice for any party may be given by its respective counsel. Additionally, Notice from Indemnitee may also be given by Servicer.

17.         Duplicate Originals; Counterparts. This Agreement may be executed in any number of duplicate originals and each duplicate original shall be deemed to be an original. This Agreement may be executed in several counterparts, each of which counterparts shall be deemed an original instrument and all of which together shall constitute a single Agreement. The failure of any party hereto to execute this Agreement, or any counterpart hereof, shall not relieve the other signatories from their obligations hereunder.

18.         No Oral Change. This Agreement, and any provisions hereof, may not be modified, amended, waived, extended, changed, discharged or terminated orally or by any act or failure to act on the part of any Indemnitor or any Indemnified Party, but only by an agreement in writing signed by the party or parties against whom enforcement of any modification, amendment, waiver, extension, change, discharge or termination is sought.

19.         Headings, Etc. The headings and captions of various sections of this Agreement are for convenience of reference only and are not to be construed as defining or limiting, in any way, the scope or intent of the provisions hereof.

20.         Number and Gender/Successors and Assigns. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the Person or Persons referred to may require. Without limiting the effect of specific references in any provision of this Agreement, the term “Indemnitor” shall be deemed to refer to each and every Person constituting an Indemnitor from time to time, as the sense of a particular provision may require, and to include the heirs, executors, administrators, legal representatives, successors and permitted assigns of each Indemnitor, all of whom shall be bound by the provisions of this Agreement. Each reference herein to Indemnitee shall be deemed to include its successors and assigns; provided that no obligation of any Indemnitor may be assigned except with the prior written consent of Indemnitee. This Agreement shall inure to the benefit of the Indemnified Parties and their respective successors, permitted assigns, heirs and legal representatives forever. Any assignee or transferee of Indemnitee (and the other Indemnified Parties) shall be entitled to all the benefits afforded to Indemnitee (and the other Indemnified

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Parties) under this Agreement. No Indemnitor shall have the right to assign or transfer its rights or obligations under this Agreement without the prior written consent of Indemnitee, and any attempted assignment without such consent shall be null and void.

21.         Release of Liability. Any one or more parties liable upon or in respect of this Agreement may be released without affecting the liability of any party not so released.

22.         Rights Cumulative. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies which Indemnitee has under the Operating Agreement or any of the other Transaction Documents or would otherwise have at law or in equity.

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

24.         Governing Law; Jurisdiction; Service of Process.

(a)          THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY EACH INDEMNITOR AND ACCEPTED BY INDEMNITEE IN THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION RELATED HERETO, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH INDEMNITOR HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND/OR THE OTHER TRANSACTION DOCUMENTS, AND THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

(b)          ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST INDEMNITEE OR ANY INDEMNITOR ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT INDEMNITEE’S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW

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YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND EACH INDEMNITOR WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND EACH INDEMNITOR HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. EACH INDEMNITOR AGREES THAT SERVICE OF PROCESS UPON SUCH INDEMNITOR AT THE ADDRESS FOR SUCH INDEMNITOR SET FORTH HEREIN AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO SUCH INDEMNITOR IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON SUCH INDEMNITOR IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. EACH INDEMNITOR (I) SHALL GIVE PROMPT NOTICE TO INDEMNITEE OF ANY CHANGE IN THE ADDRESS FOR SUCH INDEMNITOR SET FORTH HEREIN, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE AN AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE AN AUTHORIZED AGENT IF SUCH INDEMNITOR CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF INDEMNITEE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY INDEMNITOR IN ANY OTHER JURISDICTION.

25.         Miscellaneous.

(a)          Wherever pursuant to this Agreement (i) Indemnitee (or any other Indemnified Party) exercises any right given to it to approve or disapprove any matter, (ii) any arrangement or term is to be satisfactory to Indemnitee (or any other Indemnified Party), or (iii) any other decision or determination is to be made by Indemnitee (or any other Indemnified Party), the decision of Indemnitee (or such other Indemnified Party) to approve or disapprove such matter, all decisions that arrangements or terms are satisfactory or not satisfactory to Indemnitee (or such other Indemnified Party) and all other decisions and determinations made by Indemnitee (or such other Indemnified Party), shall be in the sole and absolute discretion of Indemnitee (or such other Indemnified Party) and shall be final and conclusive, except as may be otherwise expressly and specifically provided herein.

(b)          Wherever pursuant to this Agreement it is provided that any Indemnitor pay any costs and expenses, such costs and expenses shall include, but not be limited to, reasonable out-of-pocket legal fees and disbursements of Indemnitee and the other Indemnified Parties, whether incurred by retained outside law firms, or as reimbursements for the expenses of in-house legal staff, or otherwise.

26.         Joint and Several Liability. The obligations and liabilities of the Indemnitors hereunder are joint and several.

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27.         Recitals. The recitals hereof are a part hereof, form a basis for this Agreement and shall be considered prima facie evidence of the facts and documents referred to therein.

28.         California State Specific Provisions.

(a)          Environmental Provisions. To the extent California law applies, nothing herein shall be deemed to limit the right of Indemnitee to recover in accordance with California Code of Civil Procedure Section 736 (as such Section may be amended from time to time), any out-of-pocket costs, expenses, liabilities or damages, including reasonable attorneys’ fees and costs, incurred by Indemnitee and arising from any covenant, obligation, liability, representation or warranty contained in any indemnity agreement given to Indemnitee, or any order, consent decree or settlement relating to the cleanup of Hazardous Substances or any other “environmental provision” (as defined in such Section 736) relating to any Property or any portion thereof.

(b)          Additional Indemnitor Waivers. To the extent California law applies, in addition to and not in lieu of any other provisions of this Agreement, each Indemnitor represents, warrants and covenants as follows:

(i)          The obligations of each Indemnitor under this Agreement shall be performed without demand by Indemnitee and shall be unconditional irrespective of the genuineness, validity, regularity or enforceability of any of the Operating Agreement or any of the other Transaction Documents, and without regard to any other circumstance which might otherwise constitute a legal or equitable discharge of a surety or a guarantor. Each Indemnitor hereby waives any and all benefits and defenses under California Civil Code Section 2810 and agrees that by doing so such Indemnitor shall be liable even if neither the Company nor the Class B Member had no liability at the time of execution of the Transaction Documents, or thereafter ceases to be liable. Each Indemnitor hereby waives any and all benefits and defenses under California Civil Code Section 2809 and agrees that by doing so such Indemnitor’s liability may be larger in amount and more burdensome than that of the Class B Member, the Company or any of the Subsidiaries. Each Indemnitor hereby waives the benefit of all principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms of this Agreement and agrees that such Indemnitor’s obligations shall not be affected by any circumstances, whether or not referred to in this Agreement which might otherwise constitute a legal or equitable discharge of a surety or a guarantor. Each Indemnitor hereby waives the benefits of any right of discharge under any and all statutes or other laws relating to guarantors or sureties and any other rights of sureties and guarantors thereunder.

(ii)         In accordance with Section 2856 of the California Civil Code, each Indemnitor hereby waives all rights and defenses arising out of an election of remedies by Indemnitee even though that election of remedies, such as a nonjudicial foreclosure with respect to security for guaranteed obligations, has destroyed or otherwise impaired such Indemnitor’s rights of subrogation and reimbursement against the principal by the operation of Section 580d of the California Code of Civil Procedure or otherwise. Each Indemnitor hereby authorizes and empowers Indemnitee to exercise, in its sole and absolute discretion, any right or remedy, or any combination thereof, which may then be

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available, since it is the intent and purpose of each Indemnitor that the obligations under this Agreement shall be absolute, independent and unconditional under any and all circumstances. Specifically, and without in any way limiting the foregoing, each Indemnitor hereby waives any rights of subrogation, indemnification, contribution or reimbursement arising under Sections 2846, 2847, 2848 and 2849 of the California Civil Code or any other right of recourse to or with respect to the Class B Member, the Company or any of the Subsidiaries, any general partner, member or other constituent of the Class B Member, the Company or any of the Subsidiaries, any other person obligated to Indemnitee with respect to the matters set forth herein, or the assets or property of any of the foregoing until the Redemption Price has been paid in full and all obligations of the Class B Member, the Company and its Affiliates under the Transaction Documents have been fully performed, and there has expired the maximum possible period thereafter during which any payment made by the Company or others to Indemnitee with respect to such obligations could be deemed a preference under the United States Bankruptcy Code. In connection with the foregoing, subject to the foregoing limitations, each Indemnitor expressly waives any and all rights of subrogation against the Company and each of its Subsidiaries, and each Indemnitor hereby waives any rights to enforce any remedy which Indemnitee may have against the Company or any of its Subsidiaries.

(iii)        In addition to and without in any way limiting the foregoing, each Indemnitor hereby subordinates any and all indebtedness of the Class B Member, the Company and each Subsidiary now or hereafter owed to any Indemnitor to all the indebtedness of the Class B Member and the Company to Indemnitee and agrees with Indemnitee that until the Redemption Price has been paid in full and all obligations owed to Indemnitee under the Transaction Documents have been fully performed, and there has expired the maximum possible period thereafter during which any payment made by the Company or others to Indemnitee with respect to such obligations could be deemed a preference under the United States Bankruptcy Code, no Indemnitor shall demand or accept any payment of principal or interest from the Class B Member, the Company or any of the Subsidiaries or claim any offset or other reduction of any Indemnitor’s obligations hereunder because of any such indebtedness. If any amount shall nevertheless be paid to an Indemnitor by the Class B Member, the Company or any Subsidiary or another guarantor prior to payment in full of the Redemption Price, such amount shall be held in trust for the benefit of Indemnitee and shall forthwith be paid to Indemnitee to be credited and applied to the Unrecovered Capital. Further, no Indemnitor shall have any right of recourse against Indemnitee by reason of any action Indemnitee may take or omit to take under the provisions of this Agreement or under the provisions of any of the Transaction Documents. Without limiting the generality of the foregoing, each Indemnitor hereby waives, to the fullest extent permitted by law, diligence in collecting the obligations owed to Indemnitee under the Transaction Documents, presentment, demand for payment, protest, all notices with respect to the Operating Agreement, this Agreement, or any other Transaction Document which may be required by statute, rule of law or otherwise to preserve Indemnitee’s rights against such Indemnitor under this Agreement, including, but not limited to, notice of acceptance, notice of any amendment of the Transaction Documents, notice of the occurrence of any default, notice of intent to accelerate, notice of acceleration, notice of dishonor, notice of

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foreclosure, notice of protest, and notice of the incurring by the Class B Member, the Company or any of the Subsidiaries of any obligation or indebtedness.

(iv)        Without limiting the foregoing, but subject to the same limitations set forth above, each Indemnitor waives (i) all rights of subrogation, reimbursement, indemnification, and contribution and any other rights and defenses that are or may become available to any Indemnitor by reason of California Civil Code Sections 2787 to 2855, inclusive, including any and all rights or defenses such Indemnitor may have by reason of protection afforded to the Class B Member, the Company or any of the Subsidiaries with respect to any of the obligations of any Indemnitor under this Agreement by reason of a nonjudicial foreclosure or pursuant to the antideficiency or other laws of the State of California limiting or discharging the obligations of the Class B Member, the Company or any of the Subsidiaries. Without limiting the generality of the foregoing, each Indemnitor hereby expressly waives any and all benefits under California Code of Civil Procedure Section 726 (which Section, if such Indemnitor had not given this waiver, among other things, would otherwise require Indemnitee to exhaust all of its security before a personal judgment could be obtained for a deficiency).

(v)         Likewise, each Indemnitor waives (i) any and all rights and defenses available to such Indemnitor under California Civil Code Sections 2899 and 3433; and (ii) any rights or defenses such Indemnitor may have with respect to its obligations as a guarantor by reason of any election of remedies by Indemnitee. These rights and defenses include, but are not limited to, any rights or defenses based upon Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure.

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IN WITNESS WHEREOF, this Agreement has been executed by Indemnitors and is effective as of the day and year first above written.

INDEMNITORS:
AMERICAN REALTY CAPITAL HOSPITALITY OPERATING PARTNERSHIP, L.P.
By:	American Realty Capital Hospitality Trust, Inc., its general partner
	By:
		Name:  Jonathan Mehlman
		Title: CEO and President
American Realty Capital Hospitality Trust, Inc.
By:
	Name:  Jonathan Mehlman
	Title: CEO and President

[Signatures continue on next page]

Signature Page to Environmental Indemnity

NICHOLAS S. SCHORCSH

Name: Nicholas S. Schorsch  

[Signatures continue on next page]

Signature Page to Environmental Indemnity

WILLIAM M. KAHANE

Name: William M. Kahane  

[Signatures continue on next page]

Signature Page to Environmental Indemnity

EDWARD M. WEIL, JR.

Name:  Edward M. Weil, Jr.

[Signatures continue on next page]

Signature Page to Environmental Indemnity

PETER M. BUDKO

Name:  Peter M. Budko

Signature Page to Environmental Indemnity

EX-10.31

Exhibit 10.31

ENVIRONMENTAL INDEMNITY AGREEMENT

THIS ENVIRONMENTAL INDEMNITY AGREEMENT (this “Agreement”) is made as of February 27, 2015, by AMERICAN REALTY CAPITAL HOSPITALITY OPERATING PARTNERSHIP, L.P., a Delaware limited partnership, having an office at c/o American Realty Capital, 405 Park Avenue, New York, New York 10022, AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC., a Maryland corporation, having an office at c/o American Realty Capital, 405 Park Avenue, New York, New York 10022, Nicholas S. Schorsch, an individual, William M. Kahane, an individual, Edward M. Weil, Jr., an individual, and Peter M. Budko, an individual (each of the foregoing, an “Indemnitor”, and together with their respective permitted successors and assigns, collectively, “Indemnitors”), in favor of W2007 EQUITY INNS PARTNERSHIP, L.P., a Tennessee limited partnership, and W2007 EQUITY INNS TRUST, a Maryland trust, each having an office at c/o Goldman Sachs Realty Management, L.P., 6011 Connection Drive, Irving, Texas 75039 (collectively, and together with their respective successors and/or assigns, “Indemnitee”) and the other Indemnified Parties (defined below).

RECITALS

A.           Indemnitee is prepared to make an investment (the “Investment”) in ARC Hospitality Portfolio II Holdco, LLC, a Delaware limited liability company (the “Company”), in the amount of $99,799,180 as described in the Amended and Restated Limited Liability Company Agreement of the Company, of even date herewith, among Indemnitee, American Realty Capital Hospitality Portfolio Member, LP, a Delaware limited partnership (the “Class B Member”), and William G. Popeo, as special member (as the same may be amended, modified or supplemented from time to time, the “Operating Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Operating Agreement.

B.           Each Indemnitor acknowledges receipt and approval of copies of the Operating Agreement and the other Transaction Documents.

C.           Each Indemnitor acknowledges that it owns, either directly or indirectly, a beneficial interest in the Class B Member and, as a result of such beneficial interest, will receive substantial economic and other benefits from Indemnitee making the Investment in the Company.

D.           Indemnitee is unwilling to make the Investment or to enter into the Operating Agreement unless Indemnitors agree to provide the indemnification, representations, warranties, covenants and other matters described in this Agreement for the benefit of the Indemnified Parties.

E.           Indemnitors are entering into this Agreement to induce Indemnitee to make the Investment, enter into the Operating Agreement and become a Member of the Company.

AGREEMENT

NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Indemnitors hereby represent, warrant, covenant and agree for the benefit of the Indemnified Parties as follows:

1.          Environmental Covenants. Each Indemnitor covenants and agrees that (a) all uses and operations on or of each Property, whether by any of the Indemnitors or any other Person, shall be in compliance with all Environmental Laws and permits issued pursuant thereto; (b) there shall be no Releases of Hazardous Substances in, on, under or from any Property (except in compliance with all applicable Environmental Laws and with permits issued pursuant thereto); (c) there shall be no Hazardous Substances in, on or under any Property, except those that are both (i) in compliance with all applicable Environmental Laws and with any necessary permits issued pursuant thereto and (ii) fully disclosed to Indemnitee in writing; (d) Indemnitors shall keep each Property free and clear of all liens and other encumbrances imposed pursuant to any Environmental Law, whether due to any act or omission of any of the Indemnitors or any other Person (the “Environmental Liens”); provided, that after prior notice to Indemnitee, Indemnitors, at their own expense, may contest the amount or validity of any Environmental Liens in accordance with the terms of the Senior Loan Documents; (e) Indemnitors shall, at their sole cost and expense, fully and in a timely manner cooperate in all activities pursuant to Section 2 of this Agreement, including, but not limited to, providing all relevant information and making knowledgeable Persons available for interviews upon reasonable advance written request and at reasonable times and places; (f) Indemnitors shall, at their sole cost and expense, perform any environmental site assessment or other investigation of environmental conditions in connection with any Property, pursuant to any reasonable written request of Indemnitee made in consideration of any environmental event or condition reasonably believed by Indemnitee to have occurred or to exist at any Property (which request shall briefly describe the basis for Indemnitee’s belief) (including, but not limited to, sampling, testing and analysis of soil, water, air, building materials and other materials and substances whether solid, liquid or gas, such assessment or investigation to be in scope and nature appropriate to the suspected event or condition) that would be reasonably expected to have an adverse effect on any Property or on the business or condition (financial or otherwise) of the Class B Member, the Company or any of its Subsidiaries, and share with Indemnitee the reports and other results thereof, and Indemnitee and the other Indemnified Parties shall be entitled to rely on such reports and other results thereof; (g) Indemnitors shall, at their sole cost and expense, comply with all reasonable written requests of Indemnitee to (i) effectuate any required Remediation of any condition (including, but not limited to, a Release of a Hazardous Substance) in, on, under or from any Property; (ii) comply with any applicable Environmental Law; and/or (iii) comply with any directive from any Governmental Authority having jurisdiction over the applicable Property requiring any action relating to any environmental condition in, on, under, from or migrating toward such Property; provided, that with respect to clauses (g)(ii) and (iii), after notice to Indemnitee, Indemnitors may, at their own expense, contest the applicability of any Environmental Law in accordance with the terms of the Senior Loan Documents; (h) none of the Indemnitors shall do or knowingly allow any tenant or other user of any Property to do any act that is in non-compliance with any applicable Environmental Law, impairs or may impair the value of any Property, is contrary to any requirement of any insurer, constitutes a public or private nuisance, constitutes waste or

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violates any covenant, condition, agreement or easement applicable to any Property; (i) if following the date hereof, it is determined that any Property contains paint containing more than 0.5% lead by dry weight (“Lead Based Paint”), present in violation of any Environmental Law, Indemnitors agree, at their sole cost and expense and within forty-five (45) days thereafter, to cause to be prepared an assessment report describing the location and condition of the Lead Based Paint (a “Lead Based Paint Report”), prepared by an expert, and in form, scope and substance, acceptable to Indemnitee; (j) if following the date hereof, it is determined that any Property contains asbestos or asbestos-containing material (“Asbestos”) present in violation of any Environmental Law, the Indemnitors shall, at their sole cost and expense and within forty-five (45) days thereafter, cause the Company to cause to be prepared an assessment report describing the location and condition of the Asbestos (an “Asbestos Report”), prepared by an expert, and in form, scope and substance, acceptable to Indemnitee; (k) if a Lead Based Paint Report or Asbestos Report is required to be prepared pursuant to clauses (i) or (j) of this Section 1, on or before thirty (30) days following the preparation of such report, Indemnitors shall, at their sole cost and expense, develop and implement an operations and maintenance plan to manage such condition(s) on the applicable Property, which plan shall be prepared by an expert, and be in form, scope and substance, acceptable to Indemnitee (together with any Lead Based Paint Report and/or Asbestos Report, as applicable, the “O&M Plan”), and if an O&M Plan has been prepared prior to the date hereof, Indemnitors agree to diligently and continually carry out (or cause to be carried out) the provisions thereof, it being understood and agreed that compliance with the O&M Plan shall require or be deemed to require, without limitation, the proper preparation and maintenance of all records, papers and forms required under the Environmental Laws; (l) in the event that any inspection or audit reveals the presence of Toxic Mold in the indoor air of any Property at concentrations for which any Legal Requirement applicable to such Property requires removal thereof by remediation professionals, Indemnitors shall promptly remediate the Toxic Mold and perform post-remedial clearance sampling in accordance with said Legal Requirement and applicable Environmental Law, following which abatement of the Toxic Mold, Indemnitors shall prepare and implement an Operations and Maintenance Plan for Toxic Mold and Moisture reasonably acceptable to Indemnitee and in accordance with the guidelines issued by the National Multi Housing Council; and (m) Indemnitors shall promptly notify Indemnitee in writing of (A) any presence or Release or threatened Release of Hazardous Substances in, on, under, from or migrating towards any Property in material violation of, or as might be reasonably expected to result in material liability under, any Environmental Law; (B)  material non-compliance with any Environmental Laws related in any way to any Property; (C) any actual or threatened Environmental Lien; (D) any required or proposed Remediation of environmental conditions relating to any Property; and/or (E) any written or oral notice or other communication of which any Indemnitor becomes aware from any source whatsoever (including, but not limited to, any Governmental Authority) relating to a material or unlawful Release, or threatened Release, of Hazardous Substances or Remediation thereof, possible liability of any Person pursuant to any Environmental Law concerning any Property, other environmental conditions in connection with any Property or any actual or threatened administrative or judicial proceedings in connection with any environmental matters referred to in this Agreement.

2.          Indemnified Rights/Cooperation and Access. In the event the Indemnified Parties have a reasonable basis to believe that an environmental hazard exists on any Property that does not (a) endanger any tenants or other occupants of such Property or their guests or the

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general public, or (b) materially and adversely affect the value of such Property, upon reasonable written notice from the Indemnitee, describing in reasonable detail the basis for such belief, Indemnitors shall, at Indemnitors’ sole cost and expense, promptly cause an engineer or consultant reasonably satisfactory to the Indemnified Parties to conduct an environmental assessment or audit of such hazard (the scope of which shall be determined in the reasonable discretion of the Indemnified Parties) and take any samples of soil, groundwater or other water, air or building materials or any other invasive testing reasonably determined by Indemnitee to be required to assess such condition and promptly deliver to Indemnitee the results of any such assessment, audit, sampling or other testing; provided, however, if such results are not delivered to Indemnitee within a reasonable period or if the Indemnified Parties have reason to believe that an environmental hazard exists on such Property that endangers any tenant or other occupant of such Property or their guests or the general public or may materially and adversely affect the value of such Property, upon reasonable notice to Indemnitors, the Indemnified Parties and any other Person designated by the Indemnified Parties, including, but not limited to, any receiver, any representative of any Governmental Authority and/or any environmental consultant, shall have the right, but not the obligation, to enter upon such Property at all reasonable times (subject to the rights of tenants) to assess any and all aspects of the environmental condition of such Property and its use, including, but not limited to, conducting any environmental assessment or audit (the scope of which shall be determined in the sole, but good faith discretion of the Indemnified Parties) and taking samples of soil, groundwater or other water, air or building materials and reasonably conducting other invasive testing, reasonably determined by the Indemnified Parties to be required to assess the condition. Indemnitors shall cooperate with and provide, upon advance notice to each of them, the Indemnified Parties and any such Person designated by the Indemnified Parties with access to each Property.

3.          Indemnification. Indemnitors covenant and agree, at their sole cost and expense, to protect, defend, indemnify, release and hold Indemnified Parties harmless from and against any and all Losses (defined below) imposed upon, or incurred by, or asserted against, any Indemnified Parties and directly or indirectly arising out of or relating to any one or more of the following: (a) any presence of any Hazardous Substances in, on, above or under any Property; (b) any past, present or threatened Release of Hazardous Substances in, on, above, under or from any Property; (c) any activity by any of the Indemnitors, any Person affiliated with any of the Indemnitors and/or any tenant or other user of any Property in connection with any actual, proposed or threatened use, treatment, storage, holding, existence, disposition or other Release, generation, production, manufacturing, processing, refining, control, management, abatement, removal, handling, transfer or transportation to or from such Property of any Hazardous Substances at any time located in, under, on or above such Property; (d) any activity by any of the Indemnitors, any Person affiliated with any of the Indemnitors and/or any tenant or other user of any Property in connection with any actual or proposed Remediation of any Hazardous Substances at any time located in, under, on or above such Property, whether or not such Remediation is voluntary or pursuant to court or administrative order, including, but not limited to, any removal, remedial or corrective action; (e) any past, present or threatened non-compliance or violation of any Environmental Law (or of any permit issued pursuant to any Environmental Law) in connection with any Property or operations thereon, including, but not limited to, any failure by any of the Indemnitors, any Person affiliated with any of the Indemnitors and/or any tenant or other user of such Property to comply with any order of any Governmental Authority in connection with any Environmental Laws; (f) the imposition,

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recording or filing or the threatened imposition, recording or filing of any Environmental Lien encumbering any Property; (g) any administrative processes or proceedings or judicial proceedings in any way connected with any matter addressed in this Agreement; (h) [intentionally omitted]; (i) any acts of any of the Indemnitors, any Person affiliated with any of the Indemnitors and/or any tenant or other user of any Property in arranging for the disposal or treatment, or arranging with a transporter for transport for the disposal or treatment, of Hazardous Substances in, on, above or under any Property at any facility or incineration vessel containing such or similar Hazardous Substances; (j) any acts of any of the Indemnitors, any Person affiliated with any of the Indemnitors and/or any tenant or other user of any Property in accepting any Hazardous Substances in, on, above or under any Property for transport to disposal or treatment facilities, incineration vessels or sites from which there is a Release or a threatened Release of any Hazardous Substance which causes the incurrence of costs for Remediation; (k) any personal injury, wrongful death or property or other damage arising under any statutory or common law or tort law theory, in each case, with respect to environmental matters concerning any Property, including, but not limited to, damages assessed for private or public nuisance or for the conducting of an abnormally dangerous activity on or near any Property; and (l) any misrepresentation or inaccuracy in any representation or warranty contained in this Agreement or material breach or failure to perform any covenants or other obligations pursuant to this Agreement.

Notwithstanding any provisions of this Agreement to the contrary, (x) the foregoing indemnity shall not apply to Losses caused solely by the gross negligence or willful misconduct of any Indemnified Party and (y) the foregoing indemnity shall only apply to Losses resulting from any circumstance, condition, action or event first occurring after the date hereof (subject to the other limitations set forth herein).

4.          Duty to Defend and Attorneys’ and Other Fees and Expenses. Upon written request by any Indemnified Party, Indemnitors shall defend such Indemnified Party(ies) against any claim for which indemnification is required hereunder (if requested by any Indemnified Party, in the name of the Indemnified Party), by attorneys and other professionals reasonably approved by the Indemnified Parties. Notwithstanding the foregoing, if the defendants in a claim include an Indemnitor (or any affiliate of an Indemnitor) and any Indemnified Party shall have reasonably concluded that (A) there are legal defenses available to it that are materially different from or in addition to those available to such Indemnitor (or such Affiliate of such Indemnitor), or (B) the use of the attorneys engaged by such Indemnitor (or such affiliate of Indemnitor) would present such attorneys with a conflict of interest, Indemnified Parties may, in their sole and absolute discretion, engage their own attorneys and other professionals to defend or assist them, and, at the option of Indemnified Parties, their attorneys shall control the resolution of any claim or proceeding; provided that no compromise or settlement shall be entered without Indemnitors’ consent, which consent shall not be unreasonably withheld. Upon demand, Indemnitors shall pay or, in the sole and absolute discretion of the Indemnified Parties, reimburse, the Indemnified Parties for the payment of the reasonable fees and disbursements of attorneys, engineers, environmental consultants, laboratories and other professionals in connection therewith.

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5.            Definitions. As used in this Agreement, the following terms shall have the following meanings:

The term “Environmental Laws” means any present and future federal, state and local laws, statutes, ordinances, rules, regulations and the like, as well as common law, relating to protection of human health or the environment, relating to Hazardous Substances and/or relating to liability for or costs of other actual or threatened danger to human health or the environment. The term “Environmental Laws” includes, but is not limited to, the following statutes, as amended, any successor thereto, and any regulations promulgated pursuant thereto, and any state or local statutes, ordinances, rules, regulations and the like addressing similar issues: the Comprehensive Environmental Response, Compensation and Liability Act; the Emergency Planning and Community Right-to-Know Act; the Hazardous Substances Transportation Act; the Resource Conservation and Recovery Act (including, but not limited to, Subtitle I relating to underground storage tanks); the Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking Water Act; the Occupational Safety and Health Act; the Federal Water Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the National Environmental Policy Act; the River and Harbors Appropriation Act; and those relating to Lead Based Paint. The term “Environmental Laws” also includes, but is not limited to, any present and future federal, state and local laws, statutes, ordinances, rules, regulations and the like, as well as common law, conditioning transfer of property upon a negative declaration or other approval of a Governmental Authority of the environmental condition of any Property; requiring notification or disclosure of Releases of Hazardous Substances or other environmental condition of a property to any Governmental Authority or other Person, whether or not in connection with any transfer of title to or interest in such property; imposing conditions or requirements in connection with environmental permits or other environmental authorization for lawful activity; relating to nuisance, trespass or other causes of action related to the physical condition or use of any Property; and relating to wrongful death, personal injury or property or other damage in connection with any physical condition or use of any Property.

The term “Hazardous Substances” includes, but is not limited to, any and all substances (whether solid, liquid or gas) defined, listed or otherwise classified as pollutants, hazardous wastes, hazardous substances, hazardous materials, extremely hazardous wastes or words of similar meaning or regulatory effect under any present or future Environmental Laws or that may have a negative impact on human health or the environment, including, but not limited to, petroleum and petroleum products, asbestos and asbestos-containing materials, polychlorinated biphenyls, lead, and lead-containing materials, radon, radioactive materials, flammables and explosives, Lead Based Paint and Toxic Mold. Notwithstanding anything to the contrary contained herein, the term “Hazardous Substances” will not include substances which otherwise would be included in such definition but which are of kinds and in amounts ordinarily and customarily used or stored in similar properties, including, without limitation substances used for the purposes of cleaning, maintenance, or operations, substances typically used in construction, and typical products used in properties like the Properties, and which are otherwise in compliance with all Environmental Laws. Furthermore, the term “Hazardous Substances” will not include substances which otherwise would be included in such definition but which are of kinds and in amounts ordinarily and customarily stocked and sold by tenants operating retail

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businesses of the types operated by the tenants of any Property and which are otherwise in compliance with all Environmental Laws.

The term “Indemnified Parties” means Indemnitee, its affiliates, Persons who may hold or acquire or will have held a full or partial interest in Indemnitee’s Interest in accordance with Section 9.2 of the Operating Agreement (including, but not limited to, Investors (as hereinafter defined) and/or prospective Investors, as well as custodians, trustees and other fiduciaries who hold or have held a full or partial interest in the Investment for the benefit of third parties) as well as the respective directors, officers, shareholders, partners, employees, agents, servants, representatives, contractors, subcontractors, affiliates, subsidiaries, successors and assigns of any and all of the foregoing, and any successors by merger, consolidation or acquisition of all or a substantial portion of Indemnitee’s assets and business.

The term “Investor” means each purchaser, transferee, assignee or investor in the Class A Member’s Interest.

The term “Legal Action” means any claim, suit or proceeding, whether administrative or judicial in nature.

The term “Losses” includes any actual losses, damages, costs, fees, expenses, claims, suits, judgments, awards, liabilities (including, but not limited to, strict liabilities), obligations, debts, diminutions in value, fines, penalties, charges, costs of Remediation (whether or not performed voluntarily), amounts paid in settlement, foreseeable and unforeseeable consequential damages, litigation costs, reasonable fees of attorneys, engineers and environmental consultants and investigation costs (including, but not limited to, costs for sampling, testing and analysis of soil, water, air, building materials and other materials and substances, whether solid, liquid or gas), of whatever kind or nature, and whether or not incurred in connection with any judicial or administrative proceedings, actions, claims, suits, judgments or awards.

The term “Indemnitor Affiliate” shall mean any Indemnitor, the Class B Member and/or any other Person that either (or both) (a) is in Control of, is Controlled by or is under common Control with (i) any Indemnitor or (ii) any general partner or managing member of, or other Person or Persons Controlling, any Indemnitor (each a “Clause (a) Person”), or (b) is either (1) a Person that owns directly or indirectly thirty-five percent (35%) or more of the direct or indirect equity interests in any Indemnitor or any other Clause (a) Person, or (2) a Person with respect to which either (or a combination) of the Indemnitors directly or indirectly owns thirty-five percent (35%) or more of the direct or indirect equity interests in such Person, or (3) a Person with respect to which any combination of Indemnitors and Clause (a) Persons own, directly or indirectly, fifty-one percent (51%) or more of the direct or indirect voting equity interests in such Person. In addition to, and without limiting, the foregoing, if a direct or indirect interest in a loan secured by direct or indirect interests in the Company or any of its Subsidiaries is held by an Indemnitor Affiliate, the related lender will be deemed an Indemnitor Affiliate unless such Indemnitor Affiliate is a Disabled Participant (as defined below) and one or more other holders of substantial interests in such loan that are not Indemnitor Affiliates control the administration of such loan and the enforcement of the rights and remedies of such lender. An Indemnitor Affiliate is a “Disabled Participant” with respect to a loan if it has no right to exercise any

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voting or other control rights with respect to such loan (other than the right to approve amendments to the material economic terms of such loan).

The term “Release” with respect to any Hazardous Substance includes, but is not limited to, any release, deposit, discharge, emission, leaking, leaching, spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing or other movement of Hazardous Substances.

The term “Remediation” includes, but is not limited to, any response, remedial, removal, or corrective action; any activity to clean up, detoxify, decontaminate, contain or otherwise remediate any Hazardous Substance; any actions to prevent, cure or mitigate any Release of any Hazardous Substance (including, with respect to Toxic Mold, providing any moisture control systems at any Property); any action to comply with any Environmental Laws or with any permits issued pursuant thereto; any inspection, investigation, study, monitoring, assessment, audit, sampling and testing or laboratory or other analysis or evaluation relating to any Hazardous Substances or to any environmental matter referred to herein.

The term “Toxic Mold” means fungi that reproduces through the release of spores or the splitting of cells or other means that may pose a risk to human health or the environment or negatively affect the value of any Property, including, but not limited to, mold, mildew, fungi, fungal spores, fragments and metabolites such as mycotoxins and microbial volatile organic compounds.

6.          Unimpaired Liability. The liability of Indemnitors under this Agreement shall in no way be limited or impaired by, and each Indemnitor hereby consents to and agrees to be bound by, any amendment or modification of the provisions of the Operating Agreement or any of the other Transaction Documents by any Indemnitor or any Person who succeeds any Indemnitor or any Person as owner of any of the Properties. In addition, the liability of Indemnitors under this Agreement shall in no way be limited or impaired by (i) any extension of the Mandatory Redemption Date or any other extension of the time for performance required by the Operating Agreement or any of the other Transaction Documents, (ii) any sale or transfer of all or part of any Property, or any sale or other assignment by any Indemnitor of its direct or indirect ownership interests in the Class B Member or the Company, (iii) except as provided herein, any exculpatory provision in the Operating Agreement or any of the other Transaction Documents, (iv) the accuracy or inaccuracy of the representations and warranties made by the Class B Member, the Company or any Indemnitor under the Operating Agreement or any of the other Transaction Documents (including this Agreement), or (v) the release of any Indemnitor or any other Person from performance or observance of any of the agreements, covenants, terms or condition contained in the Operating Agreement or any of the other Transaction Documents by operation of law, Indemnitee’s voluntary act, or otherwise.

7.          Enforcement. The Indemnified Parties may enforce the obligations of Indemnitors without first declaring a Changeover Event, provided, however, that nothing herein shall inhibit or prevent Indemnitee from declaring a Changeover Event, or exercising any other rights and remedies under the other Transaction Documents. It is not necessary for a Changeover Event to have occurred for Indemnified Parties to exercise their rights pursuant to this Agreement. Notwithstanding any provision of the Operating Agreement or any other

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Transaction Document to the contrary, the obligations of each Indemnitor pursuant to this Agreement are exceptions to any non-recourse or exculpation provision of the Operating Agreement or any other Transaction Document; and each Indemnitor expressly acknowledges and agrees that it is fully and personally liable for such obligations, and such liability is not limited to the Unrecovered Capital or the value of the Properties.

8.           Limitations on Liability of Indemnitors.

(a)          Notwithstanding anything to the contrary herein or in the other Transaction Documents, in the event of the declaration of a Changeover Event, then Indemnitors shall not have any liability hereunder for any Losses arising from any circumstance, condition, action or event first occurring after the date of the declaration of a Changeover Event and not caused by the acts of either of the Indemnitors or any other Indemnitor Affiliate; provided that (i) Indemnitors shall remain liable hereunder for any Losses to the extent arising from any action or event prior to the date of the declaration of a Changeover Event and (ii) if, following the declaration of a Changeover Event, an arbitration panel appointed pursuant to Section 12.10 of the Operating Agreement determines that such Changeover Event has not occurred pursuant to Section 3.5 of the Operating Agreement, then the Indemnitors shall continue to be fully liable for all of its obligations hereunder and for all Losses (other than any such Losses caused solely by the actions of the Indemnitee taken on behalf of the Company or any of its Subsidiaries following such declaration of a Changeover Event).

9.           Survival. The obligations and liabilities of each Indemnitor under this Agreement shall fully survive indefinitely. Notwithstanding the foregoing, the indemnification obligations of Indemnitor hereunder shall terminate three (3) years after the payment in full (or, if later, after the delivery of the Phase I environmental report described in this sentence), in accordance with the Operating Agreement and the other Transaction Documents, of the Unrecovered Capital solely as to an Property as to which at the time of such payment (or at any time thereafter) Indemnitee has been furnished a Phase I environmental report in form and substance, and from an environmental consultant, reasonably acceptable to Indemnitee, which Phase I environmental report discloses, as of the date of such repayment (or, if later, the date of the delivery thereof), no actual or threatened (A) non-compliance with or violation of applicable Environmental Laws (or permits issued pursuant to Environmental Laws) in connection with any Property or operations thereon, which has not been cured in accordance with applicable Environmental Laws, (B) Environmental Liens encumbering any Property, (C) administrative processes or proceedings or judicial proceedings concerning any environmental matter addressed in this Agreement, or (D) unlawful presence or Release of Hazardous Substances in, on, above or under any Property that has not been fully remediated as required by applicable Environmental Laws. Notwithstanding the foregoing, at any time prior to the declaration of a Changeover Event, Indemnitors shall be entitled to request and Indemnitee agrees to grant the release of any Indemnitor from its obligations hereunder so long as, following such release, the remaining Indemnitor(s) continue(s) to collectively and no individually satisfy the Net Worth Threshold and Liquid Assets Threshold (as each such term is defined in the Guarantees) (for the avoidance of doubt excluding the Net Worth and Liquid Assets of the Guarantor being released) and, in connection with any release of an Indemnitor pursuant to this Section 9, the Class A Member shall execute and deliver a release of such Indemnitor from all liability hereunder.

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10.         Interest. Any amounts payable to any Indemnified Parties under this Agreement shall become immediately due and payable on demand and, if not paid within thirty (30) days of such demand therefor, shall bear interest at the Increased Rate.

11.         Waivers.

(a)          Each Indemnitor hereby waives and relinquishes (i) any right or claim of right to cause a marshaling of any Indemnitor’s assets or to cause Indemnitee or any other Indemnified Party to attempt to enforce any other remedy before proceeding under this Agreement against any Indemnitor; (ii) all rights and remedies accorded by applicable law to indemnitors or guarantors generally, including any rights of subrogation which any Indemnitor may have, provided that the indemnity provided for hereunder shall neither be contingent upon the existence of any such rights of subrogation nor subject to any claims or defenses whatsoever which may be asserted in connection with the enforcement or attempted enforcement of such subrogation rights, including, without limitation, any claim that such subrogation rights were abrogated by any acts of Indemnitee or any other Indemnified Party; (iii) the right to assert a counterclaim, other than a mandatory or compulsory counterclaim, in any action or proceeding brought against or by Indemnitee or any other Indemnified Party; (iv) notice of acceptance hereof and of any action taken or omitted in reliance hereon; (v) presentment for payment, demand of payment, protest or notice of nonpayment or failure to perform or observe, or other proof, or notice or demand; and (vi) all homestead exemption rights against the obligations hereunder and the benefits of any statutes of limitations or repose. Notwithstanding anything to the contrary contained herein, each Indemnitor hereby agrees to postpone the exercise of any rights of subrogation until the Redemption Price shall have been paid in full.

(b)          EACH INDEMNITOR AND EACH INDEMNIFIED PARTY, BY ITS ACCEPTANCE OF THE BENEFITS HEREOF, HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND FOREVER WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST, WITH REGARD TO THIS AGREEMENT, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY EACH INDEMNITOR AND INDEMNIFIED PARTY 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 PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY EACH INDEMNITOR AND INDEMNIFIED PARTY.

12.         Subrogation. Each Indemnitor hereby agrees that it shall take any and all commercially reasonable actions, including the institution of legal action against third parties, necessary or appropriate to obtain reimbursement, payment or compensation from such Persons responsible for the presence of any Hazardous Substances at, in, on, under or near any Property or otherwise obligated by law to bear the cost. The Indemnified Parties shall be and hereby are subrogated to all of each Indemnitor’s rights now or hereafter in such claims.

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13.         Indemnitors’ Representations and Warranties. Each Indemnitor represents and warrants that:

(a)          it has the full power and authority to execute and deliver this Agreement and to perform its obligations hereunder; the execution, delivery and performance of this Agreement by such Indemnitor has been duly and validly authorized; and all requisite action has been taken by such Indemnitor to make this Agreement valid and binding upon such Indemnitor, enforceable in accordance with its terms;

(b)          its execution of, and compliance with, this Agreement is in the ordinary course of business of such Indemnitor and will not result in the breach of any term or provision of the charter, by-laws, partnership, operating or trust agreement or other governing instrument of such Indemnitor or result in the breach of any term or provision of, or conflict with or constitute a default under, or result in the acceleration of any obligation under, any agreement, indenture or loan or credit agreement or other instrument to which such Indemnitor or any Property is subject, or result in the violation of any law, rule, regulation, order, judgment or decree to which such Indemnitor or any Property is subject;

(c)          to the best of such Indemnitor’s knowledge, there is no action, suit, proceeding or investigation pending or threatened against it which, either in any one instance or in the aggregate, would be reasonably likely to result in any material adverse change in the business, operations, financial condition, properties or assets of such Indemnitor, or in any material impairment of the right or ability of such Indemnitor to carry on its business substantially as now conducted, or in any material liability on the part of such Indemnitor, or which would draw into question the validity of this Agreement or of any action taken or to be taken in connection with the obligations of such Indemnitor contemplated herein, or which would be likely to impair materially the ability of such Indemnitor to perform under the terms of this Agreement;

(d)          it does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in this Agreement;

(e)          to the best of such Indemnitor’s knowledge, no approval, authorization, order, license or consent of, or registration or filing with, any Governmental Authority or other Person, and no approval, authorization or consent of any other Person, that has not been obtained as of the execution hereof, is required in connection with this Agreement; and

(f)          this Agreement constitutes a valid, legal and binding obligation of such Indemnitor, enforceable against it in accordance with the terms hereof, subject to bankruptcy, insolvency and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

14.         No Waiver. No delay by any Indemnified Party in exercising any right, power or privilege under this Agreement shall operate as a waiver of any such privilege, power or right.

15.         Notice of Legal Actions. Each party hereto shall, within five (5) Business Days of receipt thereof, give written notice to the other parties hereto of (i) any notice, advice or other communication from any Governmental Authority or any source whatsoever with respect to the

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presence or potential presence of Hazardous Substances on, from or affecting any Property in violation of applicable Environmental Laws, and (ii) any legal action brought against such party or related to any Property, with respect to which Indemnitors may have liability under this Agreement. Such notice shall comply with the provisions of Section 16 hereof.

16.         Notices. All notices, demands, requests, consents, approvals or other communications (any of the foregoing, a “Notice”) required, permitted or desired to be given hereunder shall be in writing and shall be sent by telefax (with answer back acknowledged) or by registered or certified mail, postage prepaid, return receipt requested, or delivered by hand or by reputable overnight courier, addressed to the party to be so notified at its address hereinafter set forth, or to such other address as such party may hereafter specify in accordance with the provisions of this Section 16. Any Notice shall be deemed to have been received: (a) three (3) days after the date such Notice is mailed, (b) on the date of sending by telefax if sent during business hours on a Business Day (otherwise on the next Business Day), (c) on the date of delivery by hand if delivered during business hours on a Business Day (otherwise on the next Business Day), and (d) on the next Business Day if sent by an overnight commercial courier, in each case addressed to the parties as follows:

If to Indemnitee:	c/o Goldman Sachs Realty Management, L.P.
	6011 Connection Drive
	Irving, Texas 75039
	Attn:  Greg Fay
	Facsimile No.:  (972) 368-3699
	Telephone No.:  (972) 368-2743
with copies to:	Whitehall Street Global Real Estate Limited Partnership 2007
	c/o Goldman, Sachs & Co.
	200 West Street
	New York, New York 10282
	Attn:  Chief Financial Officer
	Facsimile No.:  (212) 357-5505
	Telephone No.: (212) 902-5520
and:	Sullivan & Cromwell LLP
	125 Broad Street
	New York, New York 10004
	Attention:  Anthony J. Colletta, Esq.
	Facsimile No. (212) 291-9029
If to
Indemnitors:	c/o American Realty Capital
	405 Park Avenue
	New York, New York 10022
	Attn: Jon Mehlman
	Facsimile No.:  (212) 421-5799
	Telephone No.: (646) 626-8857

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with a copy to:	c/o American Realty Capital
	405 Park Avenue
	New York, New York 10022
	Attn: Michael Ead
	Facsimile No.:  (212) 421-5799
	Telephone No.: (646) 381-0604

Any party may change the address to which any such Notice is to be delivered by furnishing ten (10) days’ written notice of such change to the other parties in accordance with the provisions of this Section 16. Notices shall be deemed to have been given on the date set forth above, even if there is an inability to actually deliver any Notice because of a changed address of which no Notice was given or there is a rejection or refusal to accept any Notice offered for delivery. Notice for any party may be given by its respective counsel. Additionally, Notice from Indemnitee may also be given by Servicer.

17.         Duplicate Originals; Counterparts. This Agreement may be executed in any number of duplicate originals and each duplicate original shall be deemed to be an original. This Agreement may be executed in several counterparts, each of which counterparts shall be deemed an original instrument and all of which together shall constitute a single Agreement. The failure of any party hereto to execute this Agreement, or any counterpart hereof, shall not relieve the other signatories from their obligations hereunder.

18.         No Oral Change. This Agreement, and any provisions hereof, may not be modified, amended, waived, extended, changed, discharged or terminated orally or by any act or failure to act on the part of any Indemnitor or any Indemnified Party, but only by an agreement in writing signed by the party or parties against whom enforcement of any modification, amendment, waiver, extension, change, discharge or termination is sought.

19.         Headings, Etc. The headings and captions of various sections of this Agreement are for convenience of reference only and are not to be construed as defining or limiting, in any way, the scope or intent of the provisions hereof.

20.         Number and Gender/Successors and Assigns. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the Person or Persons referred to may require. Without limiting the effect of specific references in any provision of this Agreement, the term “Indemnitor” shall be deemed to refer to each and every Person constituting an Indemnitor from time to time, as the sense of a particular provision may require, and to include the heirs, executors, administrators, legal representatives, successors and permitted assigns of each Indemnitor, all of whom shall be bound by the provisions of this Agreement. Each reference herein to Indemnitee shall be deemed to include its successors and assigns; provided that no obligation of any Indemnitor may be assigned except with the prior written consent of Indemnitee. This Agreement shall inure to the benefit of the Indemnified Parties and their respective successors, permitted assigns, heirs and legal representatives forever. Any assignee or transferee of Indemnitee (and the other Indemnified Parties) shall be entitled to all the benefits afforded to Indemnitee (and the other Indemnified

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Parties) under this Agreement. No Indemnitor shall have the right to assign or transfer its rights or obligations under this Agreement without the prior written consent of Indemnitee, and any attempted assignment without such consent shall be null and void.

21.         Release of Liability. Any one or more parties liable upon or in respect of this Agreement may be released without affecting the liability of any party not so released.

22.         Rights Cumulative. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies which Indemnitee has under the Operating Agreement or any of the other Transaction Documents or would otherwise have at law or in equity.

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

24.         Governing Law; Jurisdiction; Service of Process.

(a)          THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY EACH INDEMNITOR AND ACCEPTED BY INDEMNITEE IN THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION RELATED HERETO, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH INDEMNITOR HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND/OR THE OTHER TRANSACTION DOCUMENTS, AND THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

(b)          ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST INDEMNITEE OR ANY INDEMNITOR ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT INDEMNITEE’S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW

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YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND EACH INDEMNITOR WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND EACH INDEMNITOR HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. EACH INDEMNITOR AGREES THAT SERVICE OF PROCESS UPON SUCH INDEMNITOR AT THE ADDRESS FOR SUCH INDEMNITOR SET FORTH HEREIN AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO SUCH INDEMNITOR IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON SUCH INDEMNITOR IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. EACH INDEMNITOR (I) SHALL GIVE PROMPT NOTICE TO INDEMNITEE OF ANY CHANGE IN THE ADDRESS FOR SUCH INDEMNITOR SET FORTH HEREIN, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE AN AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE AN AUTHORIZED AGENT IF SUCH INDEMNITOR CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF INDEMNITEE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY INDEMNITOR IN ANY OTHER JURISDICTION.

25.         Miscellaneous.

(a)          Wherever pursuant to this Agreement (i) Indemnitee (or any other Indemnified Party) exercises any right given to it to approve or disapprove any matter, (ii) any arrangement or term is to be satisfactory to Indemnitee (or any other Indemnified Party), or (iii) any other decision or determination is to be made by Indemnitee (or any other Indemnified Party), the decision of Indemnitee (or such other Indemnified Party) to approve or disapprove such matter, all decisions that arrangements or terms are satisfactory or not satisfactory to Indemnitee (or such other Indemnified Party) and all other decisions and determinations made by Indemnitee (or such other Indemnified Party), shall be in the sole and absolute discretion of Indemnitee (or such other Indemnified Party) and shall be final and conclusive, except as may be otherwise expressly and specifically provided herein.

(b)          Wherever pursuant to this Agreement it is provided that any Indemnitor pay any costs and expenses, such costs and expenses shall include, but not be limited to, reasonable out-of-pocket legal fees and disbursements of Indemnitee and the other Indemnified Parties, whether incurred by retained outside law firms, or as reimbursements for the expenses of in-house legal staff, or otherwise.

26.         Joint and Several Liability. The obligations and liabilities of the Indemnitors hereunder are joint and several.

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27.         Recitals. The recitals hereof are a part hereof, form a basis for this Agreement and shall be considered prima facie evidence of the facts and documents referred to therein.

28.         California State Specific Provisions.

(a)          Environmental Provisions. To the extent California law applies, nothing herein shall be deemed to limit the right of Indemnitee to recover in accordance with California Code of Civil Procedure Section 736 (as such Section may be amended from time to time), any out-of-pocket costs, expenses, liabilities or damages, including reasonable attorneys’ fees and costs, incurred by Indemnitee and arising from any covenant, obligation, liability, representation or warranty contained in any indemnity agreement given to Indemnitee, or any order, consent decree or settlement relating to the cleanup of Hazardous Substances or any other “environmental provision” (as defined in such Section 736) relating to any Property or any portion thereof.

(b)          Additional Indemnitor Waivers. To the extent California law applies, in addition to and not in lieu of any other provisions of this Agreement, each Indemnitor represents, warrants and covenants as follows:

(i)          The obligations of each Indemnitor under this Agreement shall be performed without demand by Indemnitee and shall be unconditional irrespective of the genuineness, validity, regularity or enforceability of any of the Operating Agreement or any of the other Transaction Documents, and without regard to any other circumstance which might otherwise constitute a legal or equitable discharge of a surety or a guarantor. Each Indemnitor hereby waives any and all benefits and defenses under California Civil Code Section 2810 and agrees that by doing so such Indemnitor shall be liable even if neither the Company nor the Class B Member had no liability at the time of execution of the Transaction Documents, or thereafter ceases to be liable. Each Indemnitor hereby waives any and all benefits and defenses under California Civil Code Section 2809 and agrees that by doing so such Indemnitor’s liability may be larger in amount and more burdensome than that of the Class B Member, the Company or any of the Subsidiaries. Each Indemnitor hereby waives the benefit of all principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms of this Agreement and agrees that such Indemnitor’s obligations shall not be affected by any circumstances, whether or not referred to in this Agreement which might otherwise constitute a legal or equitable discharge of a surety or a guarantor. Each Indemnitor hereby waives the benefits of any right of discharge under any and all statutes or other laws relating to guarantors or sureties and any other rights of sureties and guarantors thereunder.

(ii)         In accordance with Section 2856 of the California Civil Code, each Indemnitor hereby waives all rights and defenses arising out of an election of remedies by Indemnitee even though that election of remedies, such as a nonjudicial foreclosure with respect to security for guaranteed obligations, has destroyed or otherwise impaired such Indemnitor’s rights of subrogation and reimbursement against the principal by the operation of Section 580d of the California Code of Civil Procedure or otherwise. Each Indemnitor hereby authorizes and empowers Indemnitee to exercise, in its sole and absolute discretion, any right or remedy, or any combination thereof, which may then be

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available, since it is the intent and purpose of each Indemnitor that the obligations under this Agreement shall be absolute, independent and unconditional under any and all circumstances. Specifically, and without in any way limiting the foregoing, each Indemnitor hereby waives any rights of subrogation, indemnification, contribution or reimbursement arising under Sections 2846, 2847, 2848 and 2849 of the California Civil Code or any other right of recourse to or with respect to the Class B Member, the Company or any of the Subsidiaries, any general partner, member or other constituent of the Class B Member, the Company or any of the Subsidiaries, any other person obligated to Indemnitee with respect to the matters set forth herein, or the assets or property of any of the foregoing until the Redemption Price has been paid in full and all obligations of the Class B Member, the Company and its Affiliates under the Transaction Documents have been fully performed, and there has expired the maximum possible period thereafter during which any payment made by the Company or others to Indemnitee with respect to such obligations could be deemed a preference under the United States Bankruptcy Code. In connection with the foregoing, subject to the foregoing limitations, each Indemnitor expressly waives any and all rights of subrogation against the Company and each of its Subsidiaries, and each Indemnitor hereby waives any rights to enforce any remedy which Indemnitee may have against the Company or any of its Subsidiaries.

(iii)        In addition to and without in any way limiting the foregoing, each Indemnitor hereby subordinates any and all indebtedness of the Class B Member, the Company and each Subsidiary now or hereafter owed to any Indemnitor to all the indebtedness of the Class B Member and the Company to Indemnitee and agrees with Indemnitee that until the Redemption Price has been paid in full and all obligations owed to Indemnitee under the Transaction Documents have been fully performed, and there has expired the maximum possible period thereafter during which any payment made by the Company or others to Indemnitee with respect to such obligations could be deemed a preference under the United States Bankruptcy Code, no Indemnitor shall demand or accept any payment of principal or interest from the Class B Member, the Company or any of the Subsidiaries or claim any offset or other reduction of any Indemnitor’s obligations hereunder because of any such indebtedness. If any amount shall nevertheless be paid to an Indemnitor by the Class B Member, the Company or any Subsidiary or another guarantor prior to payment in full of the Redemption Price, such amount shall be held in trust for the benefit of Indemnitee and shall forthwith be paid to Indemnitee to be credited and applied to the Unrecovered Capital. Further, no Indemnitor shall have any right of recourse against Indemnitee by reason of any action Indemnitee may take or omit to take under the provisions of this Agreement or under the provisions of any of the Transaction Documents. Without limiting the generality of the foregoing, each Indemnitor hereby waives, to the fullest extent permitted by law, diligence in collecting the obligations owed to Indemnitee under the Transaction Documents, presentment, demand for payment, protest, all notices with respect to the Operating Agreement, this Agreement, or any other Transaction Document which may be required by statute, rule of law or otherwise to preserve Indemnitee’s rights against such Indemnitor under this Agreement, including, but not limited to, notice of acceptance, notice of any amendment of the Transaction Documents, notice of the occurrence of any default, notice of intent to accelerate, notice of acceleration, notice of dishonor, notice of

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foreclosure, notice of protest, and notice of the incurring by the Class B Member, the Company or any of the Subsidiaries of any obligation or indebtedness.

(iv)        Without limiting the foregoing, but subject to the same limitations set forth above, each Indemnitor waives (i) all rights of subrogation, reimbursement, indemnification, and contribution and any other rights and defenses that are or may become available to any Indemnitor by reason of California Civil Code Sections 2787 to 2855, inclusive, including any and all rights or defenses such Indemnitor may have by reason of protection afforded to the Class B Member, the Company or any of the Subsidiaries with respect to any of the obligations of any Indemnitor under this Agreement by reason of a nonjudicial foreclosure or pursuant to the antideficiency or other laws of the State of California limiting or discharging the obligations of the Class B Member, the Company or any of the Subsidiaries. Without limiting the generality of the foregoing, each Indemnitor hereby expressly waives any and all benefits under California Code of Civil Procedure Section 726 (which Section, if such Indemnitor had not given this waiver, among other things, would otherwise require Indemnitee to exhaust all of its security before a personal judgment could be obtained for a deficiency).

(v)         Likewise, each Indemnitor waives (i) any and all rights and defenses available to such Indemnitor under California Civil Code Sections 2899 and 3433; and (ii) any rights or defenses such Indemnitor may have with respect to its obligations as a guarantor by reason of any election of remedies by Indemnitee. These rights and defenses include, but are not limited to, any rights or defenses based upon Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure.

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IN WITNESS WHEREOF, this Agreement has been executed by Indemnitors and is effective as of the day and year first above written.

INDEMNITORS:
AMERICAN REALTY CAPITAL HOSPITALITY OPERATING PARTNERSHIP, L.P.
By:	American Realty Capital Hospitality Trust, Inc., its general partner
	By:
		Name:  Jonathan Mehlman
		Title: CEO and President
American Realty Capital Hospitality Trust, Inc.
By:
	Name:  Jonathan Mehlman
	Title: CEO and President

[Signatures continue on next page]

Signature Page to Environmental Indemnity – Portfolio II

NICHOLAS S. SCHORCSH

Name: Nicholas S. Schorsch  

[Signatures continue on next page]

Signature Page to Environmental Indemnity – Portfolio II

WILLIAM M. KAHANE

Name: William M. Kahane  

[Signatures continue on next page]

Signature Page to Environmental Indemnity – Portfolio II

EDWARD M. WEIL, JR.

Name:  Edward M. Weil, Jr.

[Signatures continue on next page]

Signature Page to Environmental Indemnity – Portfolio II

PETER M. BUDKO

Name:  Peter M. Budko

Signature Page to Environmental Indemnity – Portfolio II

EX-10.32

Exhibit 10.32

MANDATORY REDEMPTION GUARANTY

This MANDATORY REDEMPTION GUARANTY (this “Guaranty”) is executed as of February 27, 2015, by AMERICAN REALTY CAPITAL HOSPITALITY OPERATING PARTNERSHIP, L.P., a Delaware limited partnership, AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC., a Maryland corporation, having an office at c/o American Realty Capital, 405 Park Avenue, New York, New York 10022, Nicholas S. Schorsch, an individual, William M. Kahane, an individual, Edward M. Weil, Jr., an individual, and Peter M. Budko, an individual(each of the foregoing, a “Guarantor”, and collectively, “Guarantors”), for the benefit of W2007 EQUITY INNS SENIOR MEZZ, LLC, a Delaware limited liability company, having an office at c/o Goldman Sachs Realty Management, L.P., 6011 Connection Drive, Irving, Texas 75039 (together with its successors and/or assigns, the “Class A Member”).

WITNESSETH:

WHEREAS, the Class A Member is prepared to make an investment (the “Investment”) in ARC Hospitality Portfolio I Holdco, LLC, a Delaware limited liability company (the “Company”), in the amount of $347,298,021.00 as described in the Amended and Restated Limited Liability Company Agreement of the Company, of even date herewith, among the Class A Member, American Realty Capital Hospitality Portfolio Member, LP, a Delaware limited partnership (the “Class B Member”), and William G. Popeo, as special member (as the same may be amended, modified or supplemented from time to time, the “Operating Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Operating Agreement;

WHEREAS, each Guarantor acknowledges receipt and approval of copies of the Operating Agreement and the other Transaction Documents;

WHEREAS, each Guarantor acknowledges that it owns, either directly or indirectly, a beneficial interest in the Class B Member and, as a result of such beneficial interest, will receive substantial economic and other benefits from the Class A Member making the Investment in the Company; and

WHEREAS, the Class A Member is unwilling to make the Investment or to enter into the Operating Agreement unless Guarantors agree to provide the indemnification, representations, warranties, covenants and other matters described in this Guaranty for the benefit of the Class A Member.

NOW, THEREFORE, as an inducement to the Class A Member to make the Investment, enter into the Operating Agreement and become a Member of the Company, and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:

ARTICLE 1
NATURE AND SCOPE OF GUARANTY

Section 1.1          Guaranty of Obligation.

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

(b)          As used herein, the term “Guaranteed Obligations” means (i) the obligation of the Company to redeem or cause to be redeemed the Class A Member’s Interest in full, and to pay in full the Redemption Price, upon the occurrence of a Prohibited Transfer or upon the Class B Member ceasing to be Controlled, directly or indirectly, by ARC OP, or ARC OP ceasing to be Controlled, directly or indirectly by the REIT, or the REIT ceasing to be Controlled, directly or indirectly, by AR Capital, LLC (excluding any Prohibited Transfer or change in Control resulting from the foreclosure by any Senior Lender on any of the Properties or any of the other collateral for the Senior Loans that is not consented to by the Company or any of its Subsidiaries); (ii) the obligation of the Company to pay to the Class A Member the QCR Redemption Amount in respect of any Qualified Capital Raise upon the consummation of such Qualified Capital Raise; and (iii) the obligation of the Company to pay to the Class A Member all of the Net Financing Proceeds from the incurrence of any Additional Mezzanine Loan by the Company or any of its Subsidiaries upon such incurrence; provided, however, that in no event shall the Guarantors be liable under this Agreement for an aggregate amount in excess of the sum of (i) the Redemption Price plus (ii) all amounts due to the Class A Member pursuant to Section 1.7 hereof.

(c)          Notwithstanding anything to the contrary in this Guaranty or in any of the other Transaction Documents, then Class A Member shall not be deemed to have waived any right which the Class A Member may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Redemption Price or to require that all collateral shall continue to secure all of the obligations owed to the Class A Member in accordance with the Transaction Documents.

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

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

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

Section 1.5           No Duty To Pursue Others. It shall not be necessary for the Class A Member (and each Guarantor hereby waives any rights which such Guarantor may have to require the Class A Member), in order to enforce the obligations of Guarantors hereunder, first to (i) institute suit or exhaust its remedies against the Company or others liable for the Guaranteed Obligations or any other Person, including, without limitation, any general partner of any of the foregoing which is a partnership, (ii) declare a Changeover Event, (iii) enforce the Class A Member’s rights against any collateral which shall ever have been given to secure the obligations owed to the Class A Member under the Operating Agreement or the other Transaction Documents, (iv) enforce the Class A Member’s rights against any other guarantors of the Guaranteed Obligations, including, without limitation, any general partner of any of the foregoing which is a partnership, (v) join the Class B Member, the Company or any others liable on the Guaranteed Obligations in any action seeking to enforce this Guaranty, (vi) exhaust any remedies available to the Class A Member under the Transaction Documents, or (vii) resort to any other means of obtaining payment of the Guaranteed Obligations, including, to the extent California law is deemed to apply notwithstanding the choice of law set forth herein, any of the foregoing which may be available to the Class A Member by virtue of California Civil Code Sections 2845, 2849, and 2850. The Class A Member shall not be required to mitigate damages or take any other action to reduce, collect or enforce the Guaranteed Obligations.

Section 1.6           Waivers. Each Guarantor acknowledges receipt of copies of the Operating Agreement and the other Transaction Documents and hereby waives notice of (i) any loans or advances (including advances of Protective Capital) made by the Class A Member to the Company, (ii) acceptance of this Guaranty, (iii) any amendment of any Transaction Document or extension of the Mandatory Redemption Date, (iv) the occurrence of any breach by the Class B Member or the Company under the Operating Agreement or the other Transaction Documents or the declaration of a Changeover Event, (v) the Class A Member’s transfer or disposition of the Guaranteed Obligations, or any part thereof, (vi) protest, proof of non-payment or default by the

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Class B Member or the Company, or (vii) any other action at any time taken or omitted by the Class A Member and, generally, all demands and notices of every kind in connection with this Guaranty, the Transaction Documents, any documents or agreements evidencing, securing or relating to any of the Guaranteed Obligations and/or the obligations hereby guaranteed.

Section 1.7           Payment of Expenses. In the event that any Guarantor shall breach or fail to timely perform any provisions of this Guaranty, Guarantors shall, immediately upon demand by the Class A Member, pay the Class A Member all reasonable out-of-pocket costs and expenses (including court costs and reasonable attorneys’ fees) incurred by the Class A Member in the enforcement hereof or the preservation of the Class A Member’s rights hereunder. The covenant contained in this Section shall survive the payment and performance of the Guaranteed Obligations.

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

Section 1.9           Waiver and Postponement of Subrogation, Reimbursement and Contribution. Notwithstanding anything to the contrary contained in this Guaranty, each Guarantor hereby unconditionally and irrevocably agrees to postpone the exercise of and, until the Redemption Price has been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty), does hereby irrevocably waive and defer any and all rights it may now or hereafter have under any agreement, at law or in equity (including, without limitation, any law subrogating Guarantors’ rights to the rights of the Class A Member), to assert any claim against or seek contribution, indemnification or any other form of reimbursement from the Company or any of its Subsidiaries or any other party liable to the Class A Member for the payment of any or all of the Guaranteed Obligations for any payment made by Guarantors under or in connection with this Guaranty or otherwise; provided that, for clarity, such postponement and waiver shall only be in effect until the Redemption Price has been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty).

ARTICLE 2
EVENTS AND CIRCUMSTANCES NOT REDUCING
OR DISCHARGING GUARANTORS’ OBLIGATIONS

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

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Section 2.1           Modifications. Any renewal, extension, increase, modification, alteration or rearrangement of all or any part of the Guaranteed Obligations, the Operating Agreement, the Transaction Documents or any other document, instrument, contract or understanding between Class B Member, any Guarantor or the Company and the Class A Member or any other parties pertaining to the Guaranteed Obligations or any failure of the Class A Member to notify Guarantors of any such action.

Section 2.2           Adjustment. Any adjustment, indulgence, forbearance or compromise that might be granted or given by the Class A Member to the Class B Member, the Company or any Guarantor.

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

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

Section 2.5           Release of Obligors. Any full or partial release of the liability of the Class B Member or the Company for the Guaranteed Obligations or any part thereof, or of any co-guarantors, or of any other Person now or hereafter liable, whether directly or indirectly, jointly, severally, or jointly and severally, to pay, perform, guarantee or assure the payment of the Guaranteed Obligations, or any part thereof, it being recognized, acknowledged and agreed by each Guarantor that such Guarantor may be required to pay the Guaranteed Obligations in full

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without assistance or support from any other Person, and no Guarantor has been induced to enter into this Guaranty on the basis of a contemplation, belief, understanding or agreement that other Persons will be liable to pay or perform the Guaranteed Obligations or that the Class A Member will look to other Persons to pay or perform the Guaranteed Obligations.

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

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

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

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

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

Section 2.11         Merger. The reorganization, merger or consolidation of the Class B Member, the Company or any of the Subsidiaries into or with any other Person.

Section 2.12         Preference. Any payment by the Class B Member, the Company or any Person to the Class A Member is held to constitute a preference under the Bankruptcy Code or for any reason the Class A Member is required to refund such payment or pay such amount to the Class B Member, the Company or such other Person.

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

ARTICLE 3
REPRESENTATIONS AND WARRANTIES

To induce the Class A Member to enter into the Transaction Documents and to invest in the Company, each Guarantor represents and warrants to the Class A Member as follows:

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

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

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

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

Section 3.5           Legality. The execution, delivery and performance by each Guarantor of this Guaranty and the consummation of the transactions contemplated hereunder do not and will not contravene or conflict with any law, statute or regulation whatsoever to which such Guarantor is subject, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the breach of, any indenture, mortgage, charge, lien, contract, agreement or other instrument to which such Guarantor is a party or which may be applicable to such Guarantor. This Guaranty is a legal and binding obligation of each

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Guarantor and is enforceable against such Guarantor in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to the enforcement of creditors’ rights.

Section 3.6           No Plan Assets. No Guarantor sponsors, is obligated to contribute to, or is itself an “employee benefit plan,” as defined in Section 3(3) of ERISA, subject to Title I of ERISA, and none of the assets of any Guarantor constitutes or will, until the Redemption Price has been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty), constitute “plan assets” of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. In addition, (a) no Guarantor is a “governmental plan” within the meaning of Section 3(32) of ERISA and (b) transactions by or with Guarantor are not subject to any state statute regulating investments of, or fiduciary obligations with respect to, governmental plans. As of the date hereof, none of the Guarantors, nor any member of a “controlled group of corporations” (within the meaning of Section 414 of the Code) maintains, sponsors or contributes to a “defined benefit plan” (within the meaning of Section 3(35) of ERISA) or a “multiemployer pension plan” (within the meaning of Section 3(37)(A) of ERISA).

Section 3.7           ERISA. No Guarantor shall engage in any transaction, other than a transaction contemplated hereunder, which would cause any obligation, or action taken or to be taken, hereunder (or the exercise by the Class A Member of any of its rights under the Operating Agreement or the other Transaction Documents) to be a non-exempt prohibited transaction under ERISA.

Section 3.8           Survival. All representations and warranties made by each Guarantor herein shall survive the execution hereof.

ARTICLE 4
SUBORDINATION OF CERTAIN INDEBTEDNESS

Section 4.1           Subordination of All Guarantor Claims. As used herein, the term “Guarantor Claims” shall mean all debts and liabilities of the Class B Member, the Company or any of the Subsidiaries to any one or more of the Guarantors, whether such debts and liabilities now exist or are hereafter incurred or arise, and whether the obligations of such Person thereon be direct, contingent, primary, secondary, several, joint and several, or otherwise, and irrespective of whether such debts or liabilities be evidenced by note, contract, open account, or otherwise, and irrespective of the Person or Persons in whose favor such debts or liabilities may, at their inception, have been, or may hereafter be, created, or the manner in which they have been, or may hereafter be, acquired by the applicable Guarantor or Guarantors. The Guarantor Claims shall include, without limitation, all rights and claims of any one or both of the Guarantors against the Class B Member, the Company or any of the Subsidiaries (arising as a result of subrogation or otherwise) as a result of payment of all or a portion of the Guaranteed Obligations by any Guarantor or the Guarantors. Until the Redemption Price shall have been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty), no Guarantor shall receive or collect, directly or indirectly, from e Class B Member, the Company, any of the Subsidiaries or any other Person obligated to the Class A Member any amount upon the Guarantor Claims.

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

Section 4.3           Payments Held in Trust. Notwithstanding anything to the contrary contained in this Guaranty, in the event that any Guarantor should receive any funds, payments, claims and/or distributions which are prohibited by this Guaranty, such Guarantor agrees to hold in trust for the Class A Member an amount equal to the amount of all funds, payments, claims and/or distributions so received and not previously paid to the Class A Member, and agrees that it shall have absolutely no dominion over the amount of such funds, payments, claims and/or distributions so received except to pay such funds, payments, claims and/or distributions promptly to the Class A Member, and such Guarantor covenants promptly to pay the same to the Class A Member.

Section 4.4           Liens Subordinate. Each Guarantor agrees that any liens, security interests, judgment liens, charges or other encumbrances upon the assets of the Class B Member, the Company or any of the Subsidiaries securing payment of the Guarantor Claims shall be and remain inferior and subordinate to any liens, security interests, judgment liens, charges or other encumbrances upon such Person’s assets securing payment of the Guaranteed Obligations, regardless of whether such encumbrances in favor of any Guarantor or the Class A Member presently exist or are hereafter created or attach. Without the prior written consent of the Class A Member, until the Redemption Price shall have been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty), no Guarantor shall (i) exercise or enforce any creditor’s rights it may have against the Class B Member, the Company or any of the Subsidiaries, or (ii) foreclose, repossess, sequester or otherwise take steps or institute any action or proceedings (judicial or otherwise, including, without limitation, the commencement of, or the joinder in, any liquidation, bankruptcy, rearrangement, debtor’s relief or insolvency proceeding) to enforce any liens, mortgages, deeds of trust, security interests, collateral rights, judgments or other encumbrances on the assets of the Class B Member, the Company or any of the Subsidiaries held by any Guarantor.

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ARTICLE 5
COVENANTS

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

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

(b)          “IFRS” shall mean the International Financial Reporting Standards.

(c)          “Liquid Assets” shall mean any of the following, but only to the extent owned individually, free of all security interests, liens, pledges, charges or any other encumbrance: (a) cash (excluding proceeds of the Properties that have not been distributed by the Company), (b) certificates of deposit (with a maturity of two years or less) issued by, or savings account with, any Approved Bank or other bank or other financial institution reasonably acceptable to the Class A Member, (c) marketable securities listed on a national or international exchange reasonably acceptable to the Class A Member (it being understood, without limitation of the foregoing, that the New York Stock Exchange and NASDAQ shall be deemed acceptable to the Class A Member), marked to market, (d) U.S. Obligations or (e) aggregate availability under unencumbered, unfunded capital commitments that any Guarantor may unconditionally draw from any of its partners.

(d)          “Net Worth” shall mean, as of a given date, (i) a Person’s total assets as of such date (without regard to the Properties or any equity therein) less (ii) such Person’s total liabilities as of such date (exclusive of any liability under the Mortgage Loan Documents and the First Mezzanine Loan Documents), determined in accordance with GAAP or IFRS.

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Section 5.2          Covenants. Until the Redemption Price and the Guaranteed Obligations have been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty), Guarantors shall collectively and not individually maintain (x) an aggregate Net Worth of not less than $250,000,000.00 (the “Net Worth Threshold”) and (y) aggregate Liquid Assets of not less than $20,000,000.00 (the “Liquid Assets Threshold”).

Section 5.3          Release of Guarantors. At any time prior to the declaration of a Changeover Event, Guarantors shall be entitled to request and the Class A Member agrees to grant the release of any Guarantor from its obligations hereunder so long as, following such release, the remaining Guarantor(s) collectively and not individually continue(s) to satisfy the Net Worth Threshold and Liquid Assets Threshold requirements set forth in Section 5.2 hereof (for the avoidance of doubt excluding the Net Worth and Liquid Assets of the Guarantor being released). In connection with any release of a Guarantor pursuant to this Section 5.3, the Class A Member shall execute and deliver a release of such Guarantor from all liability in respect of the Guaranteed Obligations.

Section 5.4          Financial Statements. Each Guarantor shall deliver to the Class A Member:

(a)          within 120 days after the end of each fiscal year of such Guarantor, a complete copy of such Guarantor’s annual financial statements in the form delivered to such guarantor’s limited partners, together with a certificate of the general partner of such Guarantor certifying that, to the best of the signer’s knowledge, such annual financial statements fairly present the financial condition and results of the operations of such Guarantor;

(b)          within 90 days after the end of each fiscal quarter of such Guarantor, financial statements in the form delivered to such Guarantor’s limited partners, together with a certificate of the general partner of such Guarantor certifying that, to the best of the signer’s knowledge, such quarterly financial statements fairly present the financial condition and results of the operations of such Guarantor in a manner consistent with GAAP (subject to year-end adjustments) or IFRS; and

(c)          20 days after request by the Class A Member, such other financial information with respect to such Guarantor as the Class A Member may reasonably request.

(d)          No individual Guarantor shall have any obligation to deliver financial statements under this Guaranty.

ARTICLE 6
MISCELLANEOUS

Section 6.1          Waiver. No failure to exercise, and no delay in exercising, on the part of the Class A Member, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right. The rights of the Class A Member hereunder shall be in addition to all other rights provided by law. No modification or waiver of any provision of this Guaranty, nor any consent to any departure therefrom, shall be effective unless in writing and no such consent or waiver shall extend beyond the particular case and purpose involved. No notice or demand given in any

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case shall constitute a waiver of the right to take other action in the same, similar or other instances without such notice or demand.

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

If to the Class A
Member:	c/o Goldman Sachs Realty Management, L.P.
	6011 Connection Drive
	Irving, Texas 75039
	Attn:  Greg Fay
	Facsimile No.:  (972) 368-3699
	Telephone No.:  (972) 368-2743
with copies to:	Whitehall Street Global Real Estate Limited Partnership 2007
	c/o Goldman, Sachs & Co.
	200 West Street
	New York, New York 10282
	Attn:  Chief Financial Officer
	Facsimile No.:  (212) 357-5505
	Telephone No.: (212) 902-5520
and:	Sullivan & Cromwell LLP
	125 Broad Street
	New York, New York 10004
	Attention:  Anthony J. Colletta, Esq.
	Facsimile No. (212) 291-9029
	Telephone No.:  (212) 558-4608
If to Guarantors:	c/o American Realty Capital
	405 Park Avenue
	New York, New York 10022
	Attn: Jon Mehlman
	Facsimile No.:  (212) 421-5799
	Telephone No.: (646) 626-8857

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with a copy to:	c/o American Realty Capital
	405 Park Avenue
	New York, New York 10022
	Attn: Michael Ead
	Facsimile No.:  (212) 421-5799
	Telephone No.: (646) 381-0604

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

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

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

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EACH GUARANTOR AGREES THAT SERVICE OF PROCESS UPON SUCH GUARANTOR AT THE ADDRESS FOR SUCH GUARANTOR SET FORTH HEREIN AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO SUCH GUARANTOR IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON SUCH GUARANTOR IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. EACH GUARANTOR (I) SHALL GIVE PROMPT NOTICE TO THE CLASS A MEMBER OF ANY CHANGE IN THE ADDRESS FOR SUCH GUARANTOR SET FORTH HEREIN, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE AN AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE AN AUTHORIZED AGENT IF SUCH GUARANTOR CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF THE CLASS A MEMBER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY GUARANTOR IN ANY OTHER JURISDICTION.

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

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

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

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

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

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

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

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

Section 6.12         Waiver of Right To Trial By Jury. EACH GUARANTOR AND THE CLASS A MEMBER EACH HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS GUARANTY, THE OPERATING AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY EACH GUARANTOR AND THE CLASS A MEMBER 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 PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH

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IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE OTHER PARTIES.

Section 6.13         Cooperation. Each Guarantor acknowledges that the Class A Member and its successors and assigns may (subject to Section 9.2 of the Operating Agreement) (i) sell this Guaranty and the other Transaction Documents and/or the Class A Member’s Interest to one or more investors, (ii) deposit this Guaranty and the other Transaction Documents with a trust, which trust may sell certificates to investors evidencing an ownership interest in the trust assets, or (iii) otherwise sell the Class A Member’s Interest or one or more interests therein to investors (the transactions referred to in clauses (i) through (iii) are hereinafter each referred to as “Secondary MarketTransaction”). Each Guarantor shall at no cost to any Guarantor, cooperate with the Class A Member in effecting any such Secondary Market Transaction and shall provide (or cause the Class B Member, the Company and/or the Subsidiaries to provide) such information and materials as may be reasonably requested by the Class A Member in connection with such Secondary Market Transaction.

Section 6.14         Reinstatement in Certain Circumstances. If at any time any payment of the Class A Return, the Unrecovered Capital or any other amount payable by the Company or the Class B Member under the Operating Agreement or the other Transaction Documents is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Company or the Class B Member or otherwise, Guarantors’ obligations hereunder with respect to such payment shall be reinstated as though such payment had been due but not made at such time.

Section 6.15         Exculpation of Certain Persons. Notwithstanding anything to the contrary contained in this Guaranty or any other Transaction Document, no direct or indirect shareholder, partner, member, principal, Affiliate (other than the Class B Member and the Company), employee, officer, trustee, director, agent or other representative of a Guarantor and/or of any of its Affiliates (each, a “Related Party”) shall have any personal liability for, nor be joined as party to, any action with respect to payment, performance or discharge of any covenants, obligations, or undertakings of any Guarantor under this Guaranty, and by acceptance hereof, the Class A Member for itself and its successors and assigns irrevocably waives any and all right to sue for, seek or demand any such damages, money judgment, deficiency judgment or personal judgment against any Related Party under or by reason of or in connection with this Guaranty; except that any Related Party that is a party to any Transaction Document or any other separate written guaranty, indemnity or other agreement given by such Related Party in connection with the Investment shall remain fully liable therefor and the foregoing provisions shall not operate to limit or impair the liabilities and obligations of such Related Parties or the rights and remedies of the Class A Member thereunder.

Section 6.16         Gender; Number; General Definitions. Unless the context clearly indicates a contrary intent or unless otherwise specifically provided herein, (a) words used in this Guaranty may be used interchangeably in the singular or plural form, (b) any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, (c) the word “the Class A Member” shall mean “the Class A Member and any subsequent holder of the Class A Member’s Interest”, (d) the word “Properties” shall include any portion of any of the Properties and any interest therein, and (e) the phrases “attorneys’ fees”, “legal fees” and “counsel fees”

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shall include any and all attorneys’, paralegal and law clerk fees and disbursements, including, but not limited to, fees and disbursements at the pre-trial, trial and appellate levels, incurred or paid by the Class A Member in protecting its interest in the Company (including any Protective Capital advances by the Class A Member) and/or in enforcing its rights hereunder.

Section 6.17        Joint and Several. The obligations of each Guarantor hereunder are joint and several.

Section 6.18        Certain California State Specific Provisions.

(a)          To the extent California law applies, nothing herein shall be deemed to limit the right of the Class A Member to recover in accordance with California Code of Civil Procedure Section 736 (as such Section may be amended from time to time), any costs, expenses, liabilities or damages, including reasonable attorneys’ fees and costs, incurred by the Class A Member and arising from any covenant, obligation, liability, representation or warranty contained in any indemnity agreement given to the Class A Member, or any order, consent decree or settlement relating to the cleanup of Hazardous Substances (as defined in the Environmental Indemnity Agreement) or any other “environmental provision” (as defined in such Section 736) relating to any Property or any portion thereof.

(b)          To the extent California law applies, in addition to and not in lieu of any other provisions of this Guaranty (provided, however, that in the case of any conflict or inconsistency between the provisions of this Section 6.18(b) and the other provisions of this Guaranty as to any subject matter described in this Section 6.18(b), such other provisions shall control), each Guarantor represents, warrants and covenants as follows:

(c)          The obligations of each Guarantor under this Guaranty shall be performed without demand by the Class A Member and shall be unconditional irrespective of the genuineness, validity, regularity or enforceability of any of the Operating Agreement or any of the other Transaction Documents, and without regard to any other circumstance which might otherwise constitute a legal or equitable discharge of a surety or a guarantor. Each Guarantor hereby waives any and all benefits and defenses under California Civil Code Section 2810 and agrees that by doing so such Guarantor shall be liable even if neither the Company nor the Class B Member had no liability at the time of execution of the Transaction Documents, or thereafter ceases to be liable. Each Guarantor hereby waives any and all benefits and defenses under California Civil Code Section 2809 and agrees that by doing so such Guarantor’s liability may be larger in amount and more burdensome than that of the Company or any of its Subsidiaries. Each Guarantor hereby waives the benefit of all principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms of this Guaranty and agrees that such Guarantor’s obligations shall not be affected by any circumstances, whether or not referred to in this Guaranty which might otherwise constitute a legal or equitable discharge of a surety or a guarantor. Each Guarantor hereby waives the benefits of any right of discharge under any and all statutes or other laws relating to guarantors or sureties and any other rights of sureties and guarantors thereunder.

(d)          In accordance with Section 2856 of the California Civil Code, each Guarantor hereby waives all rights and defenses arising out of an election of remedies by the

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Class A Member even though that election of remedies, such as a nonjudicial foreclosure with respect to security for guaranteed obligations, has destroyed or otherwise impaired such Guarantor’s rights of subrogation and reimbursement against the principal by the operation of Section 580d of the California Code of Civil Procedure or otherwise. Each Guarantor hereby authorizes and empowers the Class A Member to exercise, in its sole and absolute discretion, any right or remedy, or any combination thereof, which may then be available, since it is the intent and purpose of each Guarantor that the obligations under this Guaranty shall be absolute, independent and unconditional under any and all circumstances. Specifically, and without in any way limiting the foregoing, each Guarantor hereby waives any rights of subrogation, indemnification, contribution or reimbursement arising under Sections 2846, 2847, 2848 and 2849 of the California Civil Code or any other right of recourse to or with respect to the Company or any of its Subsidiaries, any general partner, member or other constituent of the Company or any of its Subsidiaries, any other person obligated to the Class A Member with respect to the matters set forth herein, or the assets or property of any of the foregoing until the Redemption Price has been paid in full and all obligations of the Company and its Affiliates under the Transaction Documents have been fully performed, and there has expired the maximum possible period thereafter during which any payment made by the Company or others to the Class A Member with respect to such obligations could be deemed a preference under the United States Bankruptcy Code. In connection with the foregoing, subject to the foregoing limitations, each Guarantor expressly waives any and all rights of subrogation against the Company and each of its Subsidiaries, and each Guarantor hereby waives any rights to enforce any remedy which the Class A Member may have against the Company or any of its Subsidiaries.

(e)          In addition to and without in any way limiting the foregoing, each Guarantor hereby subordinates any and all indebtedness of the Company and each Subsidiary now or hereafter owed to any Guarantor to all the indebtedness of the Company or any Subsidiary to the Class A Member and agrees with the Class A Member that until the Redemption Price has been paid in full and all obligations owed to the Class A Member under the Transaction Documents have been fully performed, and there has expired the maximum possible period thereafter during which any payment made by the Company or others to the Class A Member with respect to such obligations could be deemed a preference under the United States Bankruptcy Code, no Guarantor shall demand or accept any payment of principal or interest from the Company or any of its Subsidiaries or claim any offset or other reduction of any Guarantor’s obligations hereunder because of any such indebtedness. If any amount shall nevertheless be paid to an Guarantor by the Company or any Subsidiary or another guarantor prior to payment in full of the Redemption Price, such amount shall be held in trust for the benefit of the Class A Member and shall forthwith be paid to the Class A Member to be credited and applied to the Unrecovered Capital. Further, no Guarantor shall have any right of recourse against the Class A Member by reason of any action the Class A Member may take or omit to take under the provisions of this Guaranty or under the provisions of any of the Transaction Documents. Without limiting the generality of the foregoing, each Guarantor hereby waives, to the fullest extent permitted by law, diligence in collecting the obligations owed to the Class A Member under the Transaction Documents, presentment, demand for payment, protest, all notices with respect to the Operating Agreement, this Guaranty, or any other Transaction Document which may be required by statute, rule of law or otherwise to preserve the Class A Member’s rights against such Guarantor under this Guaranty, including, but not limited to, notice

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of acceptance, notice of any amendment of the Transaction Documents, notice of the occurrence of any default, notice of intent to accelerate, notice of acceleration, notice of dishonor, notice of foreclosure, notice of protest, and notice of the incurring by the Company or any of its Subsidiaries of any obligation or indebtedness.

(f)          Without limiting the foregoing, but subject to the same limitations set forth above, each Guarantor waives (i) all rights of subrogation, reimbursement, indemnification, and contribution and any other rights and defenses that are or may become available to any Guarantor by reason of California Civil Code Sections 2787 to 2855, inclusive, including any and all rights or defenses such Guarantor may have by reason of protection afforded to the Company or any of its Subsidiaries with respect to any of the obligations of any Guarantor under this Guaranty by reason of a nonjudicial foreclosure or pursuant to the antideficiency or other laws of the State of California limiting or discharging the obligations of the Company or any of its Subsidiaries. Without limiting the generality of the foregoing, each Guarantor hereby expressly waives any and all benefits under California Code of Civil Procedure Section 726 (which Section, if such Guarantor had not given this waiver, among other things, would otherwise require the Class A Member to exhaust all of its security before a personal judgment could be obtained for a deficiency).

(g)          Likewise, each Guarantor waives (i) any and all rights and defenses available to such Guarantor under California Civil Code Sections 2899 and 3433; and (ii) any rights or defenses such Guarantor may have with respect to its obligations as a guarantor by reason of any election of remedies by the Class A Member. These rights and defenses include, but are not limited to, any rights or defenses based upon Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure.

[NO FURTHER TEXT ON THIS PAGE.]

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

GUARANTORS:
AMERICAN REALTY CAPITAL HOSPITALITY OPERATING PARTNERSHIP, L.P.
By:	American Realty Capital Hospitality Trust, Inc., its general partner
	By:
		Name:  Jonathan Mehlman
		Title: CEO and President
American Realty Capital Hospitality Trust, Inc.
By:
	Name:  Jonathan Mehlman
	Title: CEO and President

[Signatures continue on next page]

Signature Page to Mandatory Redemption Guaranty (Pool I Preferred)

NICHOLAS S. SCHORCSH

Name: Nicholas S. Schorsch  

[Signatures continue on next page]

Signature Page to Mandatory Redemption Guaranty (Pool I Preferred)

WILLIAM M. KAHANE

Name: William M. Kahane  

[Signatures continue on next page]

Signature Page to Mandatory Redemption Guaranty (Pool I Preferred)

EDWARD M. WEIL, JR.

Name:  Edward M. Weil, Jr.

[Signatures continue on next page]

Signature Page to Mandatory Redemption Guaranty (Pool I Preferred)

PETER M. BUDKO

Name:  Peter M. Budko

Signature Page to Mandatory Redemption Guaranty (Pool I Preferred)

EX-10.33

Exhibit 10.33

MANDATORY REDEMPTION GUARANTY

This MANDATORY REDEMPTION GUARANTY (this “Guaranty”) is executed as of February 27, 2015, by AMERICAN REALTY CAPITAL HOSPITALITY OPERATING PARTNERSHIP, L.P., a Delaware limited partnership, AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC., a Maryland corporation, having an office at c/o American Realty Capital, 405 Park Avenue, New York, New York 10022, Nicholas S. Schorsch, an individual, William M. Kahane, an individual, Edward M. Weil, Jr., an individual, and Peter M. Budko, an individual(each of the foregoing, a “Guarantor”, and collectively, “Guarantors”), for the benefit of W2007 EQUITY INNS PARTNERSHIP, L.P., a Tennessee limited partnership, and W2007 EQUITY INNS TRUST, a Maryland trust, each having an office at c/o Goldman Sachs Realty Management, L.P., 6011 Connection Drive, Irving, Texas 75039 (collectively, and together with their respective successors and/or assigns, the “Class A Member”).

WITNESSETH:

WHEREAS, the Class A Member is prepared to make an investment (the “Investment”) in ARC Hospitality Portfolio II Holdco, LLC, a Delaware limited liability company (the “Company”), in the amount of $99,799,180.00 as described in the Amended and Restated Limited Liability Company Agreement of the Company, of even date herewith, among the Class A Member, American Realty Capital Hospitality Portfolio Member, LP, a Delaware limited partnership (the “Class B Member”), and William G. Popeo, as special member (as the same may be amended, modified or supplemented from time to time, the “Operating Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Operating Agreement;

WHEREAS, each Guarantor acknowledges receipt and approval of copies of the Operating Agreement and the other Transaction Documents;

WHEREAS, each Guarantor acknowledges that it owns, either directly or indirectly, a beneficial interest in the Class B Member and, as a result of such beneficial interest, will receive substantial economic and other benefits from the Class A Member making the Investment in the Company; and

WHEREAS, the Class A Member is unwilling to make the Investment or to enter into the Operating Agreement unless Guarantors agree to provide the indemnification, representations, warranties, covenants and other matters described in this Guaranty for the benefit of the Class A Member.

NOW, THEREFORE, as an inducement to the Class A Member to make the Investment, enter into the Operating Agreement and become a Member of the Company, and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:

ARTICLE 1
NATURE AND SCOPE OF GUARANTY

Section 1.1          Guaranty of Obligation.

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

(b)          As used herein, the term “Guaranteed Obligations” means (i) the obligation of the Company to redeem or cause to be redeemed the Class A Member’s Interest in full, and to pay in full the Redemption Price, upon the occurrence of a Prohibited Transfer or upon the Class B Member ceasing to be Controlled, directly or indirectly, by ARC OP, or ARC OP ceasing to be Controlled, directly or indirectly by the REIT, or the REIT ceasing to be Controlled, directly or indirectly, by AR Capital, LLC (excluding any Prohibited Transfer or change in Control resulting from the foreclosure by any Senior Lender on any of the Properties or any of the other collateral for the Senior Loans that is not consented to by the Company or any of its Subsidiaries); (ii) the obligation of the Company to pay to the Class A Member the QCR Redemption Amount in respect of any Qualified Capital Raise upon the consummation of such Qualified Capital Raise; and (iii) the obligation of the Company to pay to the Class A Member all of the Net Financing Proceeds from the incurrence of any Additional Mezzanine Loan by the Company or any of its Subsidiaries upon such incurrence; provided, however, that in no event shall the Guarantors be liable under this Agreement for an aggregate amount in excess of the sum of (i) the Redemption Price plus (ii) all amounts due to the Class A Member pursuant to Section 1.7 hereof.

(c)          Notwithstanding anything to the contrary in this Guaranty or in any of the other Transaction Documents, then Class A Member shall not be deemed to have waived any right which the Class A Member may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Redemption Price or to require that all collateral shall continue to secure all of the obligations owed to the Class A Member in accordance with the Transaction Documents.

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

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

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

Section 1.5           No Duty To Pursue Others. It shall not be necessary for the Class A Member (and each Guarantor hereby waives any rights which such Guarantor may have to require the Class A Member), in order to enforce the obligations of Guarantors hereunder, first to (i) institute suit or exhaust its remedies against the Company or others liable for the Guaranteed Obligations or any other Person, including, without limitation, any general partner of any of the foregoing which is a partnership, (ii) declare a Changeover Event, (iii) enforce the Class A Member’s rights against any collateral which shall ever have been given to secure the obligations owed to the Class A Member under the Operating Agreement or the other Transaction Documents, (iv) enforce the Class A Member’s rights against any other guarantors of the Guaranteed Obligations, including, without limitation, any general partner of any of the foregoing which is a partnership, (v) join the Class B Member, the Company or any others liable on the Guaranteed Obligations in any action seeking to enforce this Guaranty, (vi) exhaust any remedies available to the Class A Member under the Transaction Documents, or (vii) resort to any other means of obtaining payment of the Guaranteed Obligations, including, to the extent California law is deemed to apply notwithstanding the choice of law set forth herein, any of the foregoing which may be available to the Class A Member by virtue of California Civil Code Sections 2845, 2849, and 2850. The Class A Member shall not be required to mitigate damages or take any other action to reduce, collect or enforce the Guaranteed Obligations.

Section 1.6           Waivers. Each Guarantor acknowledges receipt of copies of the Operating Agreement and the other Transaction Documents and hereby waives notice of (i) any loans or advances (including advances of Protective Capital) made by the Class A Member to the Company, (ii) acceptance of this Guaranty, (iii) any amendment of any Transaction Document or extension of the Mandatory Redemption Date, (iv) the occurrence of any breach by the Class B Member or the Company under the Operating Agreement or the other Transaction Documents or the declaration of a Changeover Event, (v) the Class A Member’s transfer or disposition of the Guaranteed Obligations, or any part thereof, (vi) protest, proof of non-payment or default by the

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Class B Member or the Company, or (vii) any other action at any time taken or omitted by the Class A Member and, generally, all demands and notices of every kind in connection with this Guaranty, the Transaction Documents, any documents or agreements evidencing, securing or relating to any of the Guaranteed Obligations and/or the obligations hereby guaranteed.

Section 1.7           Payment of Expenses. In the event that any Guarantor shall breach or fail to timely perform any provisions of this Guaranty, Guarantors shall, immediately upon demand by the Class A Member, pay the Class A Member all reasonable out-of-pocket costs and expenses (including court costs and reasonable attorneys’ fees) incurred by the Class A Member in the enforcement hereof or the preservation of the Class A Member’s rights hereunder. The covenant contained in this Section shall survive the payment and performance of the Guaranteed Obligations.

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

Section 1.9           Waiver and Postponement of Subrogation, Reimbursement and Contribution. Notwithstanding anything to the contrary contained in this Guaranty, each Guarantor hereby unconditionally and irrevocably agrees to postpone the exercise of and, until the Redemption Price has been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty), does hereby irrevocably waive and defer any and all rights it may now or hereafter have under any agreement, at law or in equity (including, without limitation, any law subrogating Guarantors’ rights to the rights of the Class A Member), to assert any claim against or seek contribution, indemnification or any other form of reimbursement from the Company or any of its Subsidiaries or any other party liable to the Class A Member for the payment of any or all of the Guaranteed Obligations for any payment made by Guarantors under or in connection with this Guaranty or otherwise; provided that, for clarity, such postponement and waiver shall only be in effect until the Redemption Price has been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty).

ARTICLE 2
EVENTS AND CIRCUMSTANCES NOT REDUCING
OR DISCHARGING GUARANTORS’ OBLIGATIONS

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

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Section 2.1           Modifications. Any renewal, extension, increase, modification, alteration or rearrangement of all or any part of the Guaranteed Obligations, the Operating Agreement, the Transaction Documents or any other document, instrument, contract or understanding between Class B Member, any Guarantor or the Company and the Class A Member or any other parties pertaining to the Guaranteed Obligations or any failure of the Class A Member to notify Guarantors of any such action.

Section 2.2           Adjustment. Any adjustment, indulgence, forbearance or compromise that might be granted or given by the Class A Member to the Class B Member, the Company or any Guarantor.

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

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

Section 2.5           Release of Obligors. Any full or partial release of the liability of the Class B Member or the Company for the Guaranteed Obligations or any part thereof, or of any co-guarantors, or of any other Person now or hereafter liable, whether directly or indirectly, jointly, severally, or jointly and severally, to pay, perform, guarantee or assure the payment of the Guaranteed Obligations, or any part thereof, it being recognized, acknowledged and agreed by each Guarantor that such Guarantor may be required to pay the Guaranteed Obligations in full

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without assistance or support from any other Person, and no Guarantor has been induced to enter into this Guaranty on the basis of a contemplation, belief, understanding or agreement that other Persons will be liable to pay or perform the Guaranteed Obligations or that the Class A Member will look to other Persons to pay or perform the Guaranteed Obligations.

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

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

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

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

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

Section 2.11         Merger. The reorganization, merger or consolidation of the Class B Member, the Company or any of the Subsidiaries into or with any other Person.

Section 2.12         Preference. Any payment by the Class B Member, the Company or any Person to the Class A Member is held to constitute a preference under the Bankruptcy Code or for any reason the Class A Member is required to refund such payment or pay such amount to the Class B Member, the Company or such other Person.

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

ARTICLE 3
REPRESENTATIONS AND WARRANTIES

To induce the Class A Member to enter into the Transaction Documents and to invest in the Company, each Guarantor represents and warrants to the Class A Member as follows:

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

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

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

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

Section 3.5           Legality. The execution, delivery and performance by each Guarantor of this Guaranty and the consummation of the transactions contemplated hereunder do not and will not contravene or conflict with any law, statute or regulation whatsoever to which such Guarantor is subject, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the breach of, any indenture, mortgage, charge, lien, contract, agreement or other instrument to which such Guarantor is a party or which may be applicable to such Guarantor. This Guaranty is a legal and binding obligation of each

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Guarantor and is enforceable against such Guarantor in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to the enforcement of creditors’ rights.

Section 3.6           No Plan Assets. No Guarantor sponsors, is obligated to contribute to, or is itself an “employee benefit plan,” as defined in Section 3(3) of ERISA, subject to Title I of ERISA, and none of the assets of any Guarantor constitutes or will, until the Redemption Price has been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty), constitute “plan assets” of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. In addition, (a) no Guarantor is a “governmental plan” within the meaning of Section 3(32) of ERISA and (b) transactions by or with Guarantor are not subject to any state statute regulating investments of, or fiduciary obligations with respect to, governmental plans. As of the date hereof, none of the Guarantors, nor any member of a “controlled group of corporations” (within the meaning of Section 414 of the Code) maintains, sponsors or contributes to a “defined benefit plan” (within the meaning of Section 3(35) of ERISA) or a “multiemployer pension plan” (within the meaning of Section 3(37)(A) of ERISA).

Section 3.7           ERISA. No Guarantor shall engage in any transaction, other than a transaction contemplated hereunder, which would cause any obligation, or action taken or to be taken, hereunder (or the exercise by the Class A Member of any of its rights under the Operating Agreement or the other Transaction Documents) to be a non-exempt prohibited transaction under ERISA.

Section 3.8           Survival. All representations and warranties made by each Guarantor herein shall survive the execution hereof.

ARTICLE 4
SUBORDINATION OF CERTAIN INDEBTEDNESS

Section 4.1           Subordination of All Guarantor Claims. As used herein, the term “Guarantor Claims” shall mean all debts and liabilities of the Class B Member, the Company or any of the Subsidiaries to any one or more of the Guarantors, whether such debts and liabilities now exist or are hereafter incurred or arise, and whether the obligations of such Person thereon be direct, contingent, primary, secondary, several, joint and several, or otherwise, and irrespective of whether such debts or liabilities be evidenced by note, contract, open account, or otherwise, and irrespective of the Person or Persons in whose favor such debts or liabilities may, at their inception, have been, or may hereafter be, created, or the manner in which they have been, or may hereafter be, acquired by the applicable Guarantor or Guarantors. The Guarantor Claims shall include, without limitation, all rights and claims of any one or both of the Guarantors against the Class B Member, the Company or any of the Subsidiaries (arising as a result of subrogation or otherwise) as a result of payment of all or a portion of the Guaranteed Obligations by any Guarantor or the Guarantors. Until the Redemption Price shall have been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty), no Guarantor shall receive or collect, directly or indirectly, from e Class B Member, the Company, any of the Subsidiaries or any other Person obligated to the Class A Member any amount upon the Guarantor Claims.

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

Section 4.3           Payments Held in Trust. Notwithstanding anything to the contrary contained in this Guaranty, in the event that any Guarantor should receive any funds, payments, claims and/or distributions which are prohibited by this Guaranty, such Guarantor agrees to hold in trust for the Class A Member an amount equal to the amount of all funds, payments, claims and/or distributions so received and not previously paid to the Class A Member, and agrees that it shall have absolutely no dominion over the amount of such funds, payments, claims and/or distributions so received except to pay such funds, payments, claims and/or distributions promptly to the Class A Member, and such Guarantor covenants promptly to pay the same to the Class A Member.

Section 4.4           Liens Subordinate. Each Guarantor agrees that any liens, security interests, judgment liens, charges or other encumbrances upon the assets of the Class B Member, the Company or any of the Subsidiaries securing payment of the Guarantor Claims shall be and remain inferior and subordinate to any liens, security interests, judgment liens, charges or other encumbrances upon such Person’s assets securing payment of the Guaranteed Obligations, regardless of whether such encumbrances in favor of any Guarantor or the Class A Member presently exist or are hereafter created or attach. Without the prior written consent of the Class A Member, until the Redemption Price shall have been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty), no Guarantor shall (i) exercise or enforce any creditor’s rights it may have against the Class B Member, the Company or any of the Subsidiaries, or (ii) foreclose, repossess, sequester or otherwise take steps or institute any action or proceedings (judicial or otherwise, including, without limitation, the commencement of, or the joinder in, any liquidation, bankruptcy, rearrangement, debtor’s relief or insolvency proceeding) to enforce any liens, mortgages, deeds of trust, security interests, collateral rights, judgments or other encumbrances on the assets of the Class B Member, the Company or any of the Subsidiaries held by any Guarantor.

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ARTICLE 5
COVENANTS

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

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

(b)          “IFRS” shall mean the International Financial Reporting Standards.

(c)          “Liquid Assets” shall mean any of the following, but only to the extent owned individually, free of all security interests, liens, pledges, charges or any other encumbrance: (a) cash (excluding proceeds of the Properties that have not been distributed by the Company), (b) certificates of deposit (with a maturity of two years or less) issued by, or savings account with, any Approved Bank or other bank or other financial institution reasonably acceptable to the Class A Member, (c) marketable securities listed on a national or international exchange reasonably acceptable to the Class A Member (it being understood, without limitation of the foregoing, that the New York Stock Exchange and NASDAQ shall be deemed acceptable to the Class A Member), marked to market, (d) U.S. Obligations or (e) aggregate availability under unencumbered, unfunded capital commitments that any Guarantor may unconditionally draw from any of its partners.

(d)          “Net Worth” shall mean, as of a given date, (i) a Person’s total assets as of such date (without regard to the Properties or any equity therein) less (ii) such Person’s total liabilities as of such date (exclusive of any liability under the Mortgage Loan Documents), determined in accordance with GAAP or IFRS.

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Section 5.2          Covenants. Until the Redemption Price and the Guaranteed Obligations have been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty), Guarantors shall collectively and not individually maintain (x) an aggregate Net Worth of not less than $250,000,000.00 (the “Net Worth Threshold”) and (y) aggregate Liquid Assets of not less than $20,000,000.00 (the “Liquid Assets Threshold”).

Section 5.3          Release of Guarantors. At any time prior to the declaration of a Changeover Event, Guarantors shall be entitled to request and the Class A Member agrees to grant the release of any Guarantor from its obligations hereunder so long as, following such release, the remaining Guarantor(s) collectively and not individually continue(s) to satisfy the Net Worth Threshold and Liquid Assets Threshold requirements set forth in Section 5.2 hereof (for the avoidance of doubt excluding the Net Worth and Liquid Assets of the Guarantor being released). In connection with any release of a Guarantor pursuant to this Section 5.3, the Class A Member shall execute and deliver a release of such Guarantor from all liability in respect of the Guaranteed Obligations.

Section 5.4          Financial Statements. Each Guarantor shall deliver to the Class A Member:

(a)          within 120 days after the end of each fiscal year of such Guarantor, a complete copy of such Guarantor’s annual financial statements in the form delivered to such guarantor’s limited partners, together with a certificate of the general partner of such Guarantor certifying that, to the best of the signer’s knowledge, such annual financial statements fairly present the financial condition and results of the operations of such Guarantor;

(b)          within 90 days after the end of each fiscal quarter of such Guarantor, financial statements in the form delivered to such Guarantor’s limited partners, together with a certificate of the general partner of such Guarantor certifying that, to the best of the signer’s knowledge, such quarterly financial statements fairly present the financial condition and results of the operations of such Guarantor in a manner consistent with GAAP (subject to year-end adjustments) or IFRS; and

(c)          20 days after request by the Class A Member, such other financial information with respect to such Guarantor as the Class A Member may reasonably request.

(d)          No individual Guarantor shall have any obligation to deliver financial statements under this Guaranty.

ARTICLE 6
MISCELLANEOUS

Section 6.1          Waiver. No failure to exercise, and no delay in exercising, on the part of the Class A Member, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right. The rights of the Class A Member hereunder shall be in addition to all other rights provided by law. No modification or waiver of any provision of this Guaranty, nor any consent to any departure therefrom, shall be effective unless in writing and no such consent or waiver shall extend beyond the particular case and purpose involved. No notice or demand given in any

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case shall constitute a waiver of the right to take other action in the same, similar or other instances without such notice or demand.

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

If to the Class A
Member:	c/o Goldman Sachs Realty Management, L.P.
	6011 Connection Drive
	Irving, Texas 75039
	Attn:  Greg Fay
	Facsimile No.:  (972) 368-3699
	Telephone No.:  (972) 368-2743
with copies to:	Whitehall Street Global Real Estate Limited Partnership 2007
	c/o Goldman, Sachs & Co.
	200 West Street
	New York, New York 10282
	Attn:  Chief Financial Officer
	Facsimile No.:  (212) 357-5505
	Telephone No.: (212) 902-5520
and:	Sullivan & Cromwell LLP
	125 Broad Street
	New York, New York 10004
	Attention:  Anthony J. Colletta, Esq.
	Facsimile No. (212) 291-9029
	Telephone No.:  (212) 558-4608
If to Guarantors:	c/o American Realty Capital
	405 Park Avenue
	New York, New York 10022
	Attn: Jon Mehlman
	Facsimile No.:  (212) 421-5799
	Telephone No.: (646) 626-8857

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with a copy to:	c/o American Realty Capital
	405 Park Avenue
	New York, New York 10022
	Attn: Michael Ead
	Facsimile No.:  (212) 421-5799
	Telephone No.: (646) 381-0604

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

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

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

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EACH GUARANTOR AGREES THAT SERVICE OF PROCESS UPON SUCH GUARANTOR AT THE ADDRESS FOR SUCH GUARANTOR SET FORTH HEREIN AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO SUCH GUARANTOR IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON SUCH GUARANTOR IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. EACH GUARANTOR (I) SHALL GIVE PROMPT NOTICE TO THE CLASS A MEMBER OF ANY CHANGE IN THE ADDRESS FOR SUCH GUARANTOR SET FORTH HEREIN, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE AN AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE AN AUTHORIZED AGENT IF SUCH GUARANTOR CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF THE CLASS A MEMBER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY GUARANTOR IN ANY OTHER JURISDICTION.

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

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

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

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

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

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

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

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

Section 6.12         Waiver of Right To Trial By Jury. EACH GUARANTOR AND THE CLASS A MEMBER EACH HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS GUARANTY, THE OPERATING AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY EACH GUARANTOR AND THE CLASS A MEMBER 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 PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH

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IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE OTHER PARTIES.

Section 6.13         Cooperation. Each Guarantor acknowledges that the Class A Member and its successors and assigns may (subject to Section 9.2 of the Operating Agreement) (i) sell this Guaranty and the other Transaction Documents and/or the Class A Member’s Interest to one or more investors, (ii) deposit this Guaranty and the other Transaction Documents with a trust, which trust may sell certificates to investors evidencing an ownership interest in the trust assets, or (iii) otherwise sell the Class A Member’s Interest or one or more interests therein to investors (the transactions referred to in clauses (i) through (iii) are hereinafter each referred to as “Secondary MarketTransaction”). Each Guarantor shall at no cost to any Guarantor, cooperate with the Class A Member in effecting any such Secondary Market Transaction and shall provide (or cause the Class B Member, the Company and/or the Subsidiaries to provide) such information and materials as may be reasonably requested by the Class A Member in connection with such Secondary Market Transaction.

Section 6.14         Reinstatement in Certain Circumstances. If at any time any payment of the Class A Return, the Unrecovered Capital or any other amount payable by the Company or the Class B Member under the Operating Agreement or the other Transaction Documents is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Company or the Class B Member or otherwise, Guarantors’ obligations hereunder with respect to such payment shall be reinstated as though such payment had been due but not made at such time.

Section 6.15         Exculpation of Certain Persons. Notwithstanding anything to the contrary contained in this Guaranty or any other Transaction Document, no direct or indirect shareholder, partner, member, principal, Affiliate (other than the Class B Member and the Company), employee, officer, trustee, director, agent or other representative of a Guarantor and/or of any of its Affiliates (each, a “Related Party”) shall have any personal liability for, nor be joined as party to, any action with respect to payment, performance or discharge of any covenants, obligations, or undertakings of any Guarantor under this Guaranty, and by acceptance hereof, the Class A Member for itself and its successors and assigns irrevocably waives any and all right to sue for, seek or demand any such damages, money judgment, deficiency judgment or personal judgment against any Related Party under or by reason of or in connection with this Guaranty; except that any Related Party that is a party to any Transaction Document or any other separate written guaranty, indemnity or other agreement given by such Related Party in connection with the Investment shall remain fully liable therefor and the foregoing provisions shall not operate to limit or impair the liabilities and obligations of such Related Parties or the rights and remedies of the Class A Member thereunder.

Section 6.16         Gender; Number; General Definitions. Unless the context clearly indicates a contrary intent or unless otherwise specifically provided herein, (a) words used in this Guaranty may be used interchangeably in the singular or plural form, (b) any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, (c) the word “the Class A Member” shall mean “the Class A Member and any subsequent holder of the Class A Member’s Interest”, (d) the word “Properties” shall include any portion of any of the Properties and any interest therein, and (e) the phrases “attorneys’ fees”, “legal fees” and “counsel fees”

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shall include any and all attorneys’, paralegal and law clerk fees and disbursements, including, but not limited to, fees and disbursements at the pre-trial, trial and appellate levels, incurred or paid by the Class A Member in protecting its interest in the Company (including any Protective Capital advances by the Class A Member) and/or in enforcing its rights hereunder.

Section 6.17        Joint and Several. The obligations of each Guarantor hereunder are joint and several.

Section 6.18        Certain California State Specific Provisions.

(a)          To the extent California law applies, nothing herein shall be deemed to limit the right of the Class A Member to recover in accordance with California Code of Civil Procedure Section 736 (as such Section may be amended from time to time), any costs, expenses, liabilities or damages, including reasonable attorneys’ fees and costs, incurred by the Class A Member and arising from any covenant, obligation, liability, representation or warranty contained in any indemnity agreement given to the Class A Member, or any order, consent decree or settlement relating to the cleanup of Hazardous Substances (as defined in the Environmental Indemnity Agreement) or any other “environmental provision” (as defined in such Section 736) relating to any Property or any portion thereof.

(b)          To the extent California law applies, in addition to and not in lieu of any other provisions of this Guaranty (provided, however, that in the case of any conflict or inconsistency between the provisions of this Section 6.18(b) and the other provisions of this Guaranty as to any subject matter described in this Section 6.18(b), such other provisions shall control), each Guarantor represents, warrants and covenants as follows:

(c)          The obligations of each Guarantor under this Guaranty shall be performed without demand by the Class A Member and shall be unconditional irrespective of the genuineness, validity, regularity or enforceability of any of the Operating Agreement or any of the other Transaction Documents, and without regard to any other circumstance which might otherwise constitute a legal or equitable discharge of a surety or a guarantor. Each Guarantor hereby waives any and all benefits and defenses under California Civil Code Section 2810 and agrees that by doing so such Guarantor shall be liable even if neither the Company nor the Class B Member had no liability at the time of execution of the Transaction Documents, or thereafter ceases to be liable. Each Guarantor hereby waives any and all benefits and defenses under California Civil Code Section 2809 and agrees that by doing so such Guarantor’s liability may be larger in amount and more burdensome than that of the Company or any of its Subsidiaries. Each Guarantor hereby waives the benefit of all principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms of this Guaranty and agrees that such Guarantor’s obligations shall not be affected by any circumstances, whether or not referred to in this Guaranty which might otherwise constitute a legal or equitable discharge of a surety or a guarantor. Each Guarantor hereby waives the benefits of any right of discharge under any and all statutes or other laws relating to guarantors or sureties and any other rights of sureties and guarantors thereunder.

(d)          In accordance with Section 2856 of the California Civil Code, each Guarantor hereby waives all rights and defenses arising out of an election of remedies by the

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Class A Member even though that election of remedies, such as a nonjudicial foreclosure with respect to security for guaranteed obligations, has destroyed or otherwise impaired such Guarantor’s rights of subrogation and reimbursement against the principal by the operation of Section 580d of the California Code of Civil Procedure or otherwise. Each Guarantor hereby authorizes and empowers the Class A Member to exercise, in its sole and absolute discretion, any right or remedy, or any combination thereof, which may then be available, since it is the intent and purpose of each Guarantor that the obligations under this Guaranty shall be absolute, independent and unconditional under any and all circumstances. Specifically, and without in any way limiting the foregoing, each Guarantor hereby waives any rights of subrogation, indemnification, contribution or reimbursement arising under Sections 2846, 2847, 2848 and 2849 of the California Civil Code or any other right of recourse to or with respect to the Company or any of its Subsidiaries, any general partner, member or other constituent of the Company or any of its Subsidiaries, any other person obligated to the Class A Member with respect to the matters set forth herein, or the assets or property of any of the foregoing until the Redemption Price has been paid in full and all obligations of the Company and its Affiliates under the Transaction Documents have been fully performed, and there has expired the maximum possible period thereafter during which any payment made by the Company or others to the Class A Member with respect to such obligations could be deemed a preference under the United States Bankruptcy Code. In connection with the foregoing, subject to the foregoing limitations, each Guarantor expressly waives any and all rights of subrogation against the Company and each of its Subsidiaries, and each Guarantor hereby waives any rights to enforce any remedy which the Class A Member may have against the Company or any of its Subsidiaries.

(e)          In addition to and without in any way limiting the foregoing, each Guarantor hereby subordinates any and all indebtedness of the Company and each Subsidiary now or hereafter owed to any Guarantor to all the indebtedness of the Company or any Subsidiary to the Class A Member and agrees with the Class A Member that until the Redemption Price has been paid in full and all obligations owed to the Class A Member under the Transaction Documents have been fully performed, and there has expired the maximum possible period thereafter during which any payment made by the Company or others to the Class A Member with respect to such obligations could be deemed a preference under the United States Bankruptcy Code, no Guarantor shall demand or accept any payment of principal or interest from the Company or any of its Subsidiaries or claim any offset or other reduction of any Guarantor’s obligations hereunder because of any such indebtedness. If any amount shall nevertheless be paid to an Guarantor by the Company or any Subsidiary or another guarantor prior to payment in full of the Redemption Price, such amount shall be held in trust for the benefit of the Class A Member and shall forthwith be paid to the Class A Member to be credited and applied to the Unrecovered Capital. Further, no Guarantor shall have any right of recourse against the Class A Member by reason of any action the Class A Member may take or omit to take under the provisions of this Guaranty or under the provisions of any of the Transaction Documents. Without limiting the generality of the foregoing, each Guarantor hereby waives, to the fullest extent permitted by law, diligence in collecting the obligations owed to the Class A Member under the Transaction Documents, presentment, demand for payment, protest, all notices with respect to the Operating Agreement, this Guaranty, or any other Transaction Document which may be required by statute, rule of law or otherwise to preserve the Class A Member’s rights against such Guarantor under this Guaranty, including, but not limited to, notice

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of acceptance, notice of any amendment of the Transaction Documents, notice of the occurrence of any default, notice of intent to accelerate, notice of acceleration, notice of dishonor, notice of foreclosure, notice of protest, and notice of the incurring by the Company or any of its Subsidiaries of any obligation or indebtedness.

(f)          Without limiting the foregoing, but subject to the same limitations set forth above, each Guarantor waives (i) all rights of subrogation, reimbursement, indemnification, and contribution and any other rights and defenses that are or may become available to any Guarantor by reason of California Civil Code Sections 2787 to 2855, inclusive, including any and all rights or defenses such Guarantor may have by reason of protection afforded to the Company or any of its Subsidiaries with respect to any of the obligations of any Guarantor under this Guaranty by reason of a nonjudicial foreclosure or pursuant to the antideficiency or other laws of the State of California limiting or discharging the obligations of the Company or any of its Subsidiaries. Without limiting the generality of the foregoing, each Guarantor hereby expressly waives any and all benefits under California Code of Civil Procedure Section 726 (which Section, if such Guarantor had not given this waiver, among other things, would otherwise require the Class A Member to exhaust all of its security before a personal judgment could be obtained for a deficiency).

(g)          Likewise, each Guarantor waives (i) any and all rights and defenses available to such Guarantor under California Civil Code Sections 2899 and 3433; and (ii) any rights or defenses such Guarantor may have with respect to its obligations as a guarantor by reason of any election of remedies by the Class A Member. These rights and defenses include, but are not limited to, any rights or defenses based upon Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure.

[NO FURTHER TEXT ON THIS PAGE.]

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

GUARANTORS:
AMERICAN REALTY CAPITAL HOSPITALITY OPERATING PARTNERSHIP, L.P.
By:	American Realty Capital Hospitality Trust, Inc., its general partner
	By:
		Name:  Jonathan Mehlman
		Title: CEO and President
American Realty Capital Hospitality Trust, Inc.
By:
	Name:  Jonathan Mehlman
	Title: CEO and President

[Signatures continue on next page]

Signature Page to Mandatory Redemption Guaranty – Portfolio II

NICHOLAS S. SCHORCSH

Name: Nicholas S. Schorsch  

[Signatures continue on next page]

Signature Page to Mandatory Redemption Guaranty – Portfolio II

WILLIAM M. KAHANE

Name: William M. Kahane  

[Signatures continue on next page]

Signature Page to Mandatory Redemption Guaranty – Portfolio II

EDWARD M. WEIL, JR.

Name:  Edward M. Weil, Jr.

[Signatures continue on next page]

Signature Page to Mandatory Redemption Guaranty – Portfolio II

PETER M. BUDKO

Name:  Peter M. Budko

Signature Page to Mandatory Redemption Guaranty – Portfolio II

EX-21.1

Name of Subsidiary	Ownership	State of Incorporation
ARC Hospitality Portfolio I TRS Holdco, LLC	100%	Delaware
ARC Hospitality Portfolio I TRS, LLC	100%	Delaware
ARC Hospitality Portfolio I HIL TRS, LLC	100%	Delaware
ARC Hospitality Portfolio I MCK TRS, LLC	100%	Delaware
ARC Hospitality Portfolio I MISC TRS, LLC	100%	Delaware
ARC Hospitality Portfolio I DEKS TRS, LLC	100%	Delaware
ARC Hospitality Portfolio I KS TRS, LLC	100%	Kansas
ARC Hospitality Portfolio I NTC TRS GP, LLC	100%	Delaware
ARC Hospitality Portfolio I NTC HIL TRS, LP	100%	Delaware
ARC Hospitality Portfolio I NTC TRS, LP	100%	Delaware
ARC Hospitality Portfolio I Concessions, LLC	100%	Delaware
ARC Hospitality Portfolio I TX Management, LLC	100%	Delaware
ARC Hospitality Portfolio I TX Holdings, LLC	100%	Delaware
ARC Hospitality Portfolio I TX Beverage Company, LLC	100%	Delaware
American Realty Capital Hospitality Operating Partnership, L.P.	100%	Delaware
American Realty Capital Hospitality Portfolio Member, LP	100%	Delaware
ARC Hospitality Portfolio I Holdco, LLC	100%	Delaware
ARC Hospitality Portfolio I Mezz, LP	100%	Delaware
ARC Hospitality Portfolio I Owner, LLC	100%	Delaware
ARC Hospitality Portfolio I BHGL Owner, LLC	100%	Delaware
ARC Hospitality Portfolio I PXGL Owner, LLC	100%	Delaware
ARC Hospitality Portfolio I GBGL Owner, LLC	100%	Delaware
ARC Hospitality Portfolio I NFGL Owner, LLC	100%	Delaware
ARC Hospitality Portfolio I MBGL1000 Owner, LLC	100%	Delaware
ARC Hospitality Portfolio I MBGL950 Owner, LLC	100%	Delaware
ARC Hospitality Portfolio I NTC Owner, LP	100%	Delaware
ARC Hospitality Portfolio I DLGL Owner, LP	100%	Delaware
ARC Hospitality Portfolio I SAGL Owner, LP	100%	Delaware
American Realty Capital Hospitality Portfolio Member GP, LLC	100%	Delaware
ARC Hospitality Portfolio I Mezz GP, LLC	100%	Delaware
ARC Hospitality Portfolio I NTC Owner GP, LLC	100%	Delaware
ARC Hospitality Portfolio II TRS Holdco, LLC	100%	Delaware
ARC Hospitality Portfolio II TRS, LLC	100%	Delaware
ARC Hospitality Portfolio II HIL TRS, LLC	100%	Delaware
ARC Hospitality Portfolio II MISC TRS, LLC	100%	Delaware
ARC Hospitality Portfolio II NTC TRS GP, LLC	100%	Delaware
ARC Hospitality Portfolio II NTC HIL TRS, LP	100%	Delaware
ARC Hospitality Portfolio II NTC TRS, LP	100%	Delaware
ARC Hospitality Portfolio II Concessions, LLC	100%	Delaware
ARC Hospitality Portfolio II TX Management, LLC	100%	Delaware
ARC Hospitality Portfolio II TX Holdings, LLC	100%	Delaware
ARC Hospitality Portfolio II TX Beverage Company, LLC	100%	Delaware
ARC Hospitality Portfolio II Holdco, LLC	100%	Delaware
ARC Hospitality Portfolio II Mezz, LP	100%	Delaware

ARC Hospitality Portfolio II Owner, LLC	100%	Delaware
ARC Hospitality Portfolio II Mezz GP, LLC	100%	Delaware
ARC Hospitality Portfolio II NTC Owner GP, LLC	100%	Delaware
ARC Hospitality Portfolio II NTC Owner, LP	100%	Delaware
ARC Hospitality Baltimore, LLC	100%	Delaware
ARC Hospitality Providence, LLC	100%	Delaware
ARC Hospitality Stratford, LLC	100%	Delaware
ARC Hospitality GA Tech, LLC	100%	Delaware
ARC Hospitality TRS Holding, LLC	100%	Delaware
ARC Hospitality TRS Baltimore, LLC	100%	Delaware
ARC Hospitality TRS Providence, LLC	100%	Delaware
ARC Hospitality TRS Stratford, LLC	100%	Delaware
ARC Hospitality TRS Ga Tech, LLC	100%	Delaware
CHRI Blacksburg Hotel (A/H) Minority Holding, LLC	100%	Delaware
BSE/AH Blacksburg Hotel, L.L.C.	24%	Virginia
CHRI Virginia Beach Hotel (A/H) Minority Holding, LLC	100%	Delaware
TCA Block 7 Hotel, L.L.C.	30.53%	Virginia

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Jonathan P. Mehlman, certify that:

1. I have reviewed this Annual Report on Form 10-K of American Realty Capital Hospitality Trust, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	March 31, 2015	/s/ Jonathan P. Mehlman
		Jonathan P. Mehlman Chief Executive Officer and President (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Edward T. Hoganson, certify that:

1. I have reviewed this Annual Report on Form 10-K of American Realty Capital Hospitality Trust, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	March 31, 2015	/s/ Edward T. Hoganson
		Edward T. Hoganson Chief Financial Officer, Treasurer and Secretary (Principal Financial Officer and Principal Accounting Officer)

EX-32

Exhibit 32

SECTION 1350 CERTIFICATIONS

This Certificate is being delivered pursuant to the requirements of Section 1350 of Chapter 63 (Mail Fraud) of Title 18 (Crimes and Criminal Procedures) of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed for purposes of Section 18 of the Securities Act of 1934, as amended.

The undersigned, who are the Chief Executive Officer and Chief Financial Officer of American Realty Capital Hospitality Trust, Inc. (the “Company”), each hereby certify to his knowledge as follows:

The Annual Report on Form 10-K of the Company, which accompanies this Certificate, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and all information contained in this Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	March 31, 2015	/s/ Jonathan P. Mehlman
		Jonathan P. Mehlman Chief Executive Officer and President (Principal Executive Officer)
Date:	March 31, 2015	/s/ Edward T. Hoganson
		Edward T. Hoganson Chief Financial Officer, Treasurer and Secretary (Principal Financial Officer and Principal Accounting Officer)

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Summary of Significant Accounting Policies - Schedule of Accounts, Notes, Loans and Financing Receivable (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Successor
Accounts, Notes, Loans and Financing Receivable [Line Items]
Trade receivables	$ 1,388
Allowance for doubtful accounts	(45)
Trade receivables, net of allowance	1,343
Predecessor
Accounts, Notes, Loans and Financing Receivable [Line Items]
Trade receivables		788
Allowance for doubtful accounts		(26)
Trade receivables, net of allowance		$ 762

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Common Stock - Narrative (Details) (USD $) In Thousands, except Share data, unless otherwise specified	0 Months Ended	5 Months Ended	12 Months Ended	9 Months Ended
	Feb. 03, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2014	Mar. 20, 2014
Class of Stock [Line Items]
Common stock, outstanding			10,163,206	10,163,206
Proceeds from issuance of common stock, net		$ 200	$ 252,854
Dividends declared per day (in dollars per share)	$ 0.0000465753
Dividends declared per share (in dollars per share)	$ 1.7
Share price (in dollars per share)			$ 22.50	22.50
Common stock
Class of Stock [Line Items]
Common stock, outstanding		8,888	10,163,206	10,163,206	114,497
Common stock issued through Distribution Reinvestment Plan (in shares)		0	63,998	63,998
Share Repurchase Program
Class of Stock [Line Items]
Maximum percentage of shares authorized to repurchase during year (percent)			5.00%
One Year | Share Repurchase Program
Class of Stock [Line Items]
Share price (in dollars per share)			$ 23.13	23.13
Share repurchase price maximum percent of price paid (percent)			92.50%	92.50%
Two Years | Share Repurchase Program
Class of Stock [Line Items]
Share price (in dollars per share)			$ 23.75	23.75
Share repurchase price maximum percent of price paid (percent)			95.00%	95.00%
Three Years | Share Repurchase Program
Class of Stock [Line Items]
Share price (in dollars per share)			$ 24.38	24.38
Share repurchase price maximum percent of price paid (percent)			97.50%	97.50%
Four Years | Share Repurchase Program
Class of Stock [Line Items]
Share price (in dollars per share)			$ 25	25
Share repurchase price maximum percent of price paid (percent)			100.00%	100.00%
Four Months | Share Repurchase Program
Class of Stock [Line Items]
Short-term trading fee (percent)			2.00%
Restricted Unvested Common Stock
Class of Stock [Line Items]
Common stock, outstanding			8,888	8,888

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Leases - Schedule of Future Minimum Lease Payments for Operating Leases (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014
Minimum Rental Commitments
Year ended December 31, 2015	$ 4,400
Year ended December 31, 2016	4,400
Year ended December 31, 2017	4,400
Year ended December 31, 2018	4,400
Year ended December 31, 2019	4,400
Thereafter	60,133
Total	82,133
Amortization of Lease Intangible to Rent Expense
Year ended December 31, 2015	433
Year ended December 31, 2016	433
Year ended December 31, 2017	433
Year ended December 31, 2018	433
Year ended December 31, 2019	433
Thereafter	5,895
Total	$ 8,060

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Fair Value Measurements - Fair Value by Balance Sheet Grouping (Details) (Fair Value, Inputs, Level 3, USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Successor | Carrying Amount
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair value of debt	$ 116,204
Successor | Fair Value
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair value of debt	115,286
Predecessor | Carrying Amount
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair value of debt		41,449
Predecessor | Fair Value
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair value of debt		38,921
Mortgage note payable | Successor | Carrying Amount
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair value of debt	45,500
Mortgage note payable | Successor | Fair Value
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair value of debt	44,582
Mortgage note payable | Predecessor | Carrying Amount
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair value of debt		41,449
Mortgage note payable | Predecessor | Fair Value
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair value of debt		38,921
Promissory notes payable | Successor | Carrying Amount
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair value of debt	64,849
Promissory notes payable | Successor | Fair Value
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair value of debt	64,849
Promissory notes payable | Predecessor | Carrying Amount
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair value of debt		0
Promissory notes payable | Predecessor | Fair Value
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair value of debt		0
Contingent consideration on acquisition | Successor | Carrying Amount
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair value of debt	2,384
Contingent consideration on acquisition | Successor | Fair Value
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair value of debt	2,384
Contingent consideration on acquisition | Predecessor | Carrying Amount
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair value of debt		0
Contingent consideration on acquisition | Predecessor | Fair Value
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair value of debt		0
Deferred consideration | Successor | Carrying Amount
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair value of debt	3,471
Deferred consideration | Successor | Fair Value
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair value of debt	3,471
Deferred consideration | Predecessor | Carrying Amount
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair value of debt		0
Deferred consideration | Predecessor | Fair Value
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair value of debt		$ 0

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Variable Interest Entities and Investments in Unconsolidated Entities - TCA Block 7, LLC (Details) (USD $)	3 Months Ended	9 Months Ended	0 Months Ended	3 Months Ended							5 Months Ended	9 Months Ended
	Mar. 20, 2014	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2013	Sep. 30, 2013
Variable Interest Entity [Line Items]
Net income (loss) and comprehensive income (loss)	$ (605,000)	$ (14,841,000)
Successor
Variable Interest Entity [Line Items]
Total assets		333,374,000		333,374,000
Total liabilities		131,579,000		131,579,000
Hotel revenue		26,163,000
Interest expense		(5,958,000)
Net income (loss) and comprehensive income (loss)		(14,841,000)	(5,282,000)	(5,928,000)	(3,549,000)	(82,000)
Company's share of net income (loss)		352,000
Predecessor
Variable Interest Entity [Line Items]
Total assets							135,242,000				135,242,000
Total liabilities							46,746,000				46,746,000
Hotel revenue	6,026,000										30,489,000
Interest expense	(531,000)										(2,265,000)
Net income (loss) and comprehensive income (loss)	(605,000)						(370,000)	468,000	978,000	(971,000)	105,000
Company's share of net income (loss)	(166,000)										(65,000)
Westin Virginia Beach JV | Successor
Variable Interest Entity [Line Items]
Total assets		30,816,000		30,816,000			31,035,000				31,035,000
Total liabilities		22,168,000		22,168,000			28,991,000				28,991,000
Hotel revenue		10,146,000
Operating income (loss)		2,150,000
Interest income		0
Interest expense		(994,000)
Forgiveness of debt		7,522,000
Net income (loss) and comprehensive income (loss)		8,678,000
Company's share of net income (loss)		2,650,000
Additional amortization expense		(111,000)
Unrecognized gain by JV		(2,297,000)
Company's share of net income (loss)		242,000
Difference in basis		3,600,000		3,600,000
Westin Virginia Beach JV | Predecessor
Variable Interest Entity [Line Items]
Hotel revenue	2,070,000											11,232,000
Operating income (loss)	(67,000)											1,228,000
Interest income	0											2,000
Interest expense	(304,000)											(1,429,000)
Forgiveness of debt	0											0
Net income (loss) and comprehensive income (loss)	(371,000)											(199,000)
Company's share of net income (loss)	(113,000)											(61,000)
Additional amortization expense	(18,000)											(83,000)
Unrecognized gain by JV	0											0
Company's share of net income (loss)	(131,000)											(144,000)
Difference in basis		$ 3,400,000		$ 3,400,000

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Related Party Transactions and Arrangements (Tables)

12 Months Ended

Dec. 31, 2014

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

The table below shows the interest expense paid by the Company during the year ended December 31, 2014 and the associated payable as of December 31, 2014, which is recorded in due to affiliates on the Company's consolidated/combined balance sheets, and the interest expense paid by the Predecessor for the year ended December 31, 2013 and the associated payable as of December 31, 2013 (in thousands):

	Year Ended   December 31,				Payable as of
	2014		2013		December 31, 2014		December 31, 2013
Interest payment related to the Grace deposit promissory note	$	151	$	—	$	—	$	—

The table below shows the fees incurred from and payable to Georgia Tech Hotel during the year ended December 31, 2014 and 2013, respectively, and the associated payable as of December 31, 2014 and December 31, 2013, which is recorded in due to affiliates on the Company's consolidated/combined balance sheets (in thousands):

	Year Ended   December 31,				Payable as of
	2014		2013		December 31, 2014		December 31, 2013
Total offering related costs incurred to leased hotel	$	60	$	—	$	60	$	—

The table below depicts the acquisition and financing coordination fees charged by the Advisor in connection with the operations of the Company for the year ended December 31, 2014 and 2013, respectively, and the associated payable as of December 31, 2014 and December 31, 2013, which is recorded in due to affiliates on the Company's consolidated/combined balance sheets (in thousands):

	Year Ended   December 31,				Payable as of
	2014		2013		December 31, 2014		December 31, 2013
Acquisition fees	$	1,598	$	—	$	—	$	—
Financing coordination fees	815		—		—		—
	$	2,413	$	—	$	—	$	—

The table below shows compensation and reimbursements incurred and payable to the Advisor and its affiliates for services relating to the Offering during the year ended December 31, 2014 and 2013, respectively, and the associated amounts payable as of December 31, 2014 and December 31, 2013, which is recorded in due to affiliates on the Company's consolidated/combined balance sheets (in thousands):

	Year Ended   December 31,				Payable as of
	2014		2013		December 31, 2014		December 31, 2013
Total compensation and reimbursement for services provided by the Advisor and its affiliates relating to the Offering	$	3,915	$	644	$	1,885	$	644

The table below shows the management fees and reimbursable expenses incurred by the Company during the year ended December 31, 2014 and the associated payable as of December 31, 2014, which is recorded in due to affiliates on the Company's consolidated/combined balance sheets, and the management fees and reimbursable expenses incurred by the Predecessor for the year ended December 31, 2013 and the associated payable as of December 31, 2013, which is recorded in accounts payable and accrued expenses on the Predecessor's consolidated/combined balance sheets (in thousands):

	Year Ended   December 31,				Payable as of
	2014		2013		December 31, 2014		December 31, 2013
Total management fees and reimbursable expenses incurred from Sub-Property Manager	$	2,579	$	2,445	$	228	$	158
Total management fees incurred from Property Manager	262		—		20		—
	$	2,841	$	2,445	$	248	$	158

The table below shows the interest expense paid by the Company during the year ended December 31, 2014, and the associated payable as of December 31, 2014, which is recorded in due to affiliates on the Company's consolidated/combined balance sheets, and the interest expense paid by the Predecessor during the year ended December 31, 2013 and the associated payable as of December 31, 2013, which is recorded in accounts payable and accrued expenses on the Predecessor's consolidated/combined balance sheets (in thousands):

	Year Ended   December 31,				Payable as of
	2014		2013		December 31, 2014		December 31, 2013
Interest related to the Property improvement plan promissory note	$	63	$	—	$	20	$	—

The table below depicts related party fees and reimbursements charged by the Dealer Manager and RCS Advisory in connection with the operations of the Company for the year ended December 31, 2014 and 2013, respectively, and the associated payable as of December 31, 2014 and December 31, 2013 (in thousands):

	Year Ended   December 31,				Payable as of
	2014		2013		December 31, 2014		December 31, 2013
Transaction fees and expenses	$	5,270	$	—	$	4,645	$	—
Advisory and investment banking fee	460		—		—		—
Total related party fees and reimbursements	$	5,730	$	—	$	4,645	$	—

The table below shows the fees incurred from and payable to the Dealer Manager for the Offering during the year ended December 31, 2014 and 2013, respectively, and the associated payable as of December 31, 2014 and December 31, 2013, which is recorded in due to affiliates on the Company's consolidated/combined balance sheets (in thousands):

	Year Ended   December 31,				Payable as of
	2014		2013		December 31, 2014		December 31, 2013
Total commissions and fees incurred from the Dealer Manager	$	24,099	$	—	$	153	$	—

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Related Party Transactions and Arrangements - Narrative (Details) (USD $)	12 Months Ended	9 Months Ended		12 Months Ended	5 Months Ended
	Dec. 31, 2014	Dec. 31, 2014		Dec. 31, 2013	Dec. 31, 2013
Related Party Transaction [Line Items]
Common stock, outstanding	10,163,206	10,163,206
Liability for initial public offering costs (percent)	2.00%
Offering and related costs in excess of gross proceeds form the offering limit	$ 2,400,000	$ 2,400,000		$ 1,500,000	$ 1,500,000
Quarterly asset management fee earned (percent)	0.1875%	0.1875%
Share price (in dollars per share)	$ 22.50	$ 22.50
Conversion threshold for units of aggregate capital contributed (percent)	6.00%	6.00%
Property management fee (percent)	4.00%
Sub-property management fee (percent)	15.00%
Sub-property management fee, benchmark rate of total investment (percent)	8.50%
Successor
Related Party Transaction [Line Items]
Common stock, outstanding	10,163,206	10,163,206
Due to affiliates	7,011,000	7,011,000		600,000	600,000
Proceeds receivable from share sales		1,564,000	[1]
Common stock, issued	10,163,206	10,163,206
Repayment of affiliate note payable used to fund acquisition deposit	40,500,000	40,500,000
The grace acquisition
Related Party Transaction [Line Items]
Earnest money deposit	50,000,000	50,000,000
The grace acquisition | Promissory notes payable
Related Party Transaction [Line Items]
Earnest money deposit	45,000,000	45,000,000
Common class B
Related Party Transaction [Line Items]
Common stock, issued	27,820.88	27,820.88
Special limited partner
Related Party Transaction [Line Items]
Common stock, outstanding	8,888	8,888
Subordinated incentive listing distribution (percent)	15.00%	15.00%
Special limited partner | Annual targeted investor return
Related Party Transaction [Line Items]
Cumulative capital investment return (percent)	6.00%	6.00%
Dealer manager
Related Party Transaction [Line Items]
Due to affiliates	4,645,000	4,645,000		0	0
Sales commissions earned by related party (percent)	7.00%	7.00%
Gross proceeds from the sales of common stock, before allowances (percent)	3.00%	3.00%
Brokerage fees earned by related party (percent)	2.50%	2.50%
Fees incurred with the offering	5,730,000			0
Dealer manager | Offering costs other than selling, commissions and dealer fees
Related Party Transaction [Line Items]
Fees incurred with the offering					1,500,000
Dealer manager | Strategic advisory services and investment banking services contract
Related Party Transaction [Line Items]
Amount of agreement	900,000
Dealer manager | Strategic financial advice and assistance with grace acquisition
Related Party Transaction [Line Items]
Fees incurred with the offering	4,500,000
Related party rate	0.25%
Affiliated entity | Transaction management services in connection with grace acquisition
Related Party Transaction [Line Items]
Acquisition and transaction related costs	1,000,000	1,000,000
Payment of acquisition and transaction related costs	600,000
Acquisition and transaction related costs, payable amount	$ 100,000	$ 100,000
ARC realty finance advisors, LLC
Related Party Transaction [Line Items]
Real estate acquisition fee	1.50%	1.50%
Real estate acquisition fee reimbursement maximum (percent)	0.10%	0.10%
Real estate acquisition fee acquisition cost reimbursement aggregate (percent)	1.90%	1.90%
Real estate acquisition fee acquisition maximum (percent)	4.50%	4.50%
Annual asset management fee lower of cost of assets or net asset value (percent)	0.75%	0.75%
Reimbursement costs for administrative services maximum of operating expenses (percent)	2.00%	2.00%
Reimbursement costs for administrative services maximum of net income (percent)	25.00%	25.00%
Subordinated performance fee return threshold (percent)	6.00%	6.00%
Subordinated participation in asset sale fee (percent)	15.00%	15.00%
Subordinated participation in asset sale fee maximum (percent)	10.00%	10.00%
Transaction termination or nonrenewal of advisory agreement fee (percent)	15.00%	15.00%
Termination or nonrenewal of advisory agreement fee threshold (percent)	6.00%	6.00%
ARC realty finance advisors, LLC | Brokerage commission fees
Related Party Transaction [Line Items]
Real estate commission earned by related party (percent)	2.00%	2.00%
ARC realty finance advisors, LLC | Brokerage fee commission for third party
Related Party Transaction [Line Items]
Real estate commission earned by related party (percent)	50.00%	50.00%
ARC realty finance advisors, LLC | Real estate commissions
Related Party Transaction [Line Items]
Real estate commission earned by related party (percent)	6.00%	6.00%
Participating broker dealers
Related Party Transaction [Line Items]
Sales commissions earned by related party (percent)	7.50%	7.50%
Brokerage fees earned by related party (percent)	1.00%	1.00%

[1] The proceeds receivable from the sale of shares of common equity was received by the Company prior to the filing date of this Annual Report on Form 10-K.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable

When internal collection efforts on accounts have been exhausted, the accounts are written off and the associated allowance for doubtful accounts is reduced. Trade receivable balances, net of the allowance for doubtful accounts, are included in prepaid expenses and other assets in the accompanying consolidated/combined balance sheets, and are as follows (in thousands):

	Successor			Predecessor
	December 31, 2014			December 31, 2013
Trade receivables	$	1,388		$	788
Allowance for doubtful accounts	(45		)	(26		)
Trade receivables, net of allowance	$	1,343		$	762

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Mortgage Notes Payable - Narrative (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended	3 Months Ended	5 Months Ended
	Dec. 31, 2014	Mar. 20, 2014	Dec. 31, 2013
Successor
Debt Instrument [Line Items]
Interest expense	$ 1.6
Predecessor
Debt Instrument [Line Items]
Interest expense		$ 0.5	$ 2.1
Mortgage note payable | Predecessor
Debt Instrument [Line Items]
Interest rate			5.05%

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Variable Interest Entities and Investments in Unconsolidated Entities - Narrative (Details) (USD $)	5 Months Ended	12 Months Ended	9 Months Ended	3 Months Ended	0 Months Ended
	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2014 guarantor	Mar. 20, 2014	Apr. 08, 2014	Apr. 17, 2011
Variable Interest Entity [Line Items]
Partnership loan balance		$ 45,500,000	$ 45,500,000
HGI Blacksburg JV
Variable Interest Entity [Line Items]
Amount of capital distribution	0	240,000
HGI Blacksburg JV
Variable Interest Entity [Line Items]
Ownership Interest		24.00%
Number of guarantors on debt		4	4
Loan guarantee percentage		100.00%	100.00%
Distribution from unconsolidated affiliates	0		10,000
HGI Blacksburg JV | HGI Blacksburg JV
Variable Interest Entity [Line Items]
Ownership Interest	24.00%	24.00%
Westin Virginia Beach JV
Variable Interest Entity [Line Items]
Ownership Interest		30.53%
Westin Virginia Beach JV | Westin Virginia Beach JV
Variable Interest Entity [Line Items]
Ownership Interest	30.53%	30.53%
Predecessor
Variable Interest Entity [Line Items]
Partnership loan balance	37,239,000
Distribution from unconsolidated affiliates	0			0
Predecessor | HGI Blacksburg JV
Variable Interest Entity [Line Items]
Partnership loan balance	10,663,000
Predecessor | HGI Blacksburg JV | Loan | Blacksburg Loan
Variable Interest Entity [Line Items]
Amount of loan						13,000,000
Predecessor | Westin Virginia Beach JV
Variable Interest Entity [Line Items]
Partnership loan balance	26,576,000
Loan guarantee percentage		100.00%	100.00%
Predecessor | Westin Virginia Beach JV | Loan | West Virginia Beach Loan
Variable Interest Entity [Line Items]
Amount of loan					20,700,000.0
Predecessor | Westin Virginia Beach JV | Notes Payable | Note C
Variable Interest Entity [Line Items]
Repayments of note payable					7,000,000
Extinguishment of Debt, Amount					500,000
Successor
Variable Interest Entity [Line Items]
Partnership loan balance		30,603,000	30,603,000
Distribution from unconsolidated affiliates			257,000
Successor | HGI Blacksburg JV
Variable Interest Entity [Line Items]
Partnership loan balance		10,063,000	10,063,000
Successor | Westin Virginia Beach JV
Variable Interest Entity [Line Items]
Partnership loan balance		$ 20,540,000	$ 20,540,000

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Organization - Narrative (Details) (USD $)	0 Months Ended	5 Months Ended	12 Months Ended	0 Months Ended
	Feb. 03, 2014	Dec. 31, 2013	Dec. 31, 2014 company hotel	Nov. 11, 2014	May 23, 2014	Jan. 07, 2014
Class of Stock [Line Items]
Number of properties owned			6
Shares authorized (in shares)						80,000,000
Share price (in dollars per share)			$ 22.50
Maximum sale amount of shares			$ 2,000,000,000
Subscriptions required to break escrow	2,000,000
Common stock, outstanding			10,163,206
Proceeds from issuance of common stock, net		200,000	252,854,000
Common stock outstanding			254,000,000
Number of newly formed limited liability companies in Delaware			2
Closing consideration payable			3,500,000
The grace acquisition
Class of Stock [Line Items]
Number of properties owned				116	126
Aggregate contract purchase price				1,808,000,000
Proceeds from issuance or sale of equity					230,100,000
Proceeds from assumption of long-term debt					903,900,000
Funding through additional mortgage and mezzanine financing					227,000,000
Common stock
Class of Stock [Line Items]
Par value (in dollars per share)						0.01
Share price (in dollars per share)			$ 25			25
Distribution reinvestment plan
Class of Stock [Line Items]
Shares authorized (in shares)						21,052,631
Share price (in dollars per share)			$ 23.75
Share price as a percent of offering price			95.00%
Preferred equity interests | The grace acquisition
Class of Stock [Line Items]
Proceeds from issuance of preferred limited partners units					447,100,000
Amount of repayment in full of currently outstanding unsecured obligations					63,100,000
Gross amounts of equity proceeds received by the company					100,000,000
Percentage of equity offering proceeds used to redeem the preferred equity interests at par					35.00%
Maximum amount equity offering proceeds to redeem preferred equity interests at par					350,000,000
Period for maximum equity offerings to redeem preferred equity interests at par					12 months
Percentage required to redeem preferred equity interests at the end of third year					50.00%
Percentage required to redeem preferred equity interests at the end of fourth year					100.00%
Preferred equity interests | The grace acquisition | Minimum
Class of Stock [Line Items]
Dividend rate per annum					7.50%
Preferred equity interests | The grace acquisition | Maximum
Class of Stock [Line Items]
Dividend rate per annum					8.00%
American Realty Capital Hospitality Special Limited Partner, LLC
Class of Stock [Line Items]
Expected contributed capital			2,020
Operating partnership units (in shares)			90
Secured debt | The grace acquisition
Class of Stock [Line Items]
Long term debt assumed					801,100,000
Number of properties under loan					20
Mezzanine mortage | The grace acquisition
Class of Stock [Line Items]
Long term debt assumed					$ 102,800,000
Number of one year extensions					3
London interbank offered rate (LIBOR) | Secured debt | The grace acquisition
Class of Stock [Line Items]
Basis spread on variable rate					3.11%
London interbank offered rate (LIBOR) | Mezzanine mortage | The grace acquisition
Class of Stock [Line Items]
Basis spread on variable rate					4.77%
Mezzanine mortage | Secured debt | The grace acquisition
Class of Stock [Line Items]
Number of properties under loan					96
One Year Extension Rate Interest Rate Option One | London interbank offered rate (LIBOR) | Secured debt | The grace acquisition
Class of Stock [Line Items]
Basis spread on variable rate			6.00%
One Year Extension Rate Interest Rate Option Two | London interbank offered rate (LIBOR) | Secured debt | The grace acquisition
Class of Stock [Line Items]
Basis spread on variable rate			6.25%

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Promissory Notes Payable - Schedule of Promissory Notes (Details) (Successor, USD $) In Thousands, unless otherwise specified	Dec. 31, 2014
Debt Instrument [Line Items]
Promissory notes payable	$ 64,849
Promissory notes payable | Barceló acquisition
Debt Instrument [Line Items]
Promissory notes payable	63,074
Interest Rate (percent)	6.80%
Promissory notes payable | Property improvement plan
Debt Instrument [Line Items]
Promissory notes payable	1,775
Interest Rate (percent)	4.50%
Promissory notes payable | Grace Acquisition deposit
Debt Instrument [Line Items]
Promissory notes payable	$ 0
Interest Rate (percent)	6.00%

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Schedule III - Real Estate and Accumulated Depreciation - Summary of Activity for Real Estate (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Mar. 21, 2014
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Partnership loan balance	$ 45,500,000
Initial cost of land	12,061,000
Initial cost of buildings and improvements	77,605,000
Subsequent costs capitalized for Land	0
Subsequent costs capitalized for buildings and improvements	3,571,000
Carrying amount of land	12,061,000
Carrying amount of buildings and improvements	81,176,000
Total	93,237,000	89,666,000
Accumulated depreciation	(1,569,000)	0
Tax basis of aggregate land, buildings and improvements	92,300,000
Building
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Depreciable useful life	40 years
Building improvements
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Depreciable useful life	15 years
Baltimore Courtyard Inner Harbor Hotel | MD
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Partnership loan balance	24,980,000
Initial cost of land	4,960,000
Initial cost of buildings and improvements	34,343,000
Subsequent costs capitalized for Land	0
Subsequent costs capitalized for buildings and improvements	1,000
Carrying amount of land	4,960,000
Carrying amount of buildings and improvements	34,344,000
Total	39,304,000
Accumulated depreciation	(679,000)
Courtyard Providence Downtown Hotel | RI
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Partnership loan balance	20,520,000
Initial cost of land	4,724,000
Initial cost of buildings and improvements	29,388,000
Subsequent costs capitalized for Land	0
Subsequent costs capitalized for buildings and improvements	1,238,000
Carrying amount of land	4,724,000
Carrying amount of buildings and improvements	30,626,000
Total	35,350,000
Accumulated depreciation	(586,000)
Homewood Suites Stratford | CT
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Partnership loan balance	0
Initial cost of land	2,377,000
Initial cost of buildings and improvements	13,874,000
Subsequent costs capitalized for Land	0
Subsequent costs capitalized for buildings and improvements	2,332,000
Carrying amount of land	2,377,000
Carrying amount of buildings and improvements	16,206,000
Total	18,583,000
Accumulated depreciation	$ (304,000)

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Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) (USD $) In Thousands, unless otherwise specified	5 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2014
Current:
Federal	$ 0	$ 633
State	0	91
Current income tax expense (benefit)	0	724
Deferred:
Federal	0	(116)
State	0	(17)
Deferred income tax expense (benefit)	0	(133)
Income tax expense (benefit)	$ 0	$ 591

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Leases - Narrative (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended	9 Months Ended	3 Months Ended	5 Months Ended
	Dec. 31, 2014	Dec. 31, 2014	Mar. 20, 2014	Dec. 31, 2013
Operating Leased Assets [Line Items]
Initial lease term	30 years
Lease extension term	10 years
Successor
Operating Leased Assets [Line Items]
Rent		$ 3,879
Predecessor
Operating Leased Assets [Line Items]
Rent			933	4,321
Georgia Tech Hotel
Operating Leased Assets [Line Items]
Rent	300

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Business Combination

12 Months Ended

Dec. 31, 2014

Business Combinations [Abstract]

Business Combination

Business Combination

On March 21, 2014, the Company acquired the Barceló Portfolio through fee simple, leasehold and joint venture interests. The aggregate purchase price of the Barceló Portfolio was approximately $110.1 million, exclusive of closing costs. The Barceló Portfolio consists of (i) three wholly owned hotel assets (the "Portfolio Owned Assets"), the Baltimore Courtyard Inner Harbor Hotel (the "Baltimore Courtyard"), the Courtyard Providence Downtown Hotel (the "Providence Courtyard") and the Homewood Suites by Hilton Stratford (the "Stratford Homewood Suites"); (ii) one leased asset, the Georgia Tech Hotel & Conference Center (the "Georgia Tech Hotel"); and (iii) equity interests in two joint ventures (the "Joint Venture Assets") that each own one hotel, the Westin Virginia Beach and the Hilton Garden Inn Blacksburg.

The following table presents the allocation of the assets acquired and liabilities assumed by the Company as of March 21, 2014 (in thousands):

	Successor
Assets acquired and liabilities assumed	As of March 21, 2014
Land	$	12,061
Buildings and improvements	77,605
Below-market lease obligation	8,400
Furniture, fixtures and equipment	5,220
Restricted cash	619
Investment in unconsolidated entities	5,380
Prepaid expenses and other assets	2,314
Accounts payable and accrued expenses	(1,469		)
Total operating assets acquired, net	110,130
Contingent consideration on acquisition	(2,268		)
Seller financing of real estate investments	(58,074		)
Seller financing of investment in unconsolidated entities	(5,000		)
Deferred consideration	(3,400		)
Total assets acquired, net	$	41,388

The Company is finalizing the fair value of certain tangible and intangible assets acquired and adjustments may be made to the preliminary purchase price allocation shown above. Pro forma information as if the above acquisitions during the year ended December 31, 2014 had been consummated on January 1, 2013 have not been presented as the results for the Predecessor for the period from January 1 to March 20, 2014 and the year ended December 31, 2013 representing substantially all of the Company's operations are included in the consolidated/combined statements of operations.

Contingent consideration included as part of the acquisition is payable to BCC in 2016 based on the operating results of the Baltimore Courtyard, Providence Courtyard and Stratford Homewood Suites. Additionally, deferred consideration payable to BCC of $3.0 million and $0.5 million is payable within ten business days after the date the Company raises $70.0 million in common equity from the Offering excluding any common equity raised on or prior to the closing of the Grace Acquisition and payment of all acquisition related expenses (including payments to the Advisor and its affiliates) (See Note 11 - Commitments and Contingencies for further information on the preceding). The fair value of the contingent consideration on acquisition of $2.3 million and the deferred consideration of $3.4 million are included in accounts payable and accrued expenses (See Note 8) and the seller financing of real estate investments and seller financing of investment in unconsolidated entities are included in promissory notes payable (See Note 7) on the accompanying consolidated/combined balance sheets.

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Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) (USD $) In Thousands, unless otherwise specified	5 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2014
Income Tax Disclosure [Abstract]
Statutory federal income tax benefit	$ 0	$ (4,845)
Effect of non-taxable REIT loss	0	5,361
State income tax expense, net of federal tax benefit	0	73
Other	0	2
Income tax expense (benefit)	$ 0	$ 591

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Variable Interest Entities and Investments in Unconsolidated Entities - Investments in Unconsolidated Affiliates (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	5 Months Ended	9 Months Ended	12 Months Ended
	Mar. 20, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2014
Successor
Schedule of Equity Method Investments [Line Items]
Investment in partnership			$ 5,475	$ 5,475
Income (Loss)			352
Predecessor
Schedule of Equity Method Investments [Line Items]
Investment in partnership		4,381
Income (Loss)	(166)	(65)
HGI Blacksburg JV
Schedule of Equity Method Investments [Line Items]
Ownership Interest				24.00%
Investment in partnership		893	1,631	1,631
Income (Loss)	(35)	79	110
HGI Blacksburg JV | Successor
Schedule of Equity Method Investments [Line Items]
Investment in partnership			1,631	1,631
HGI Blacksburg JV | Predecessor
Schedule of Equity Method Investments [Line Items]
Investment in partnership		893
Westin Virginia Beach JV
Schedule of Equity Method Investments [Line Items]
Ownership Interest				30.53%
Investment in partnership		3,488	3,844	3,844
Income (Loss)	(131)	(144)	242
Westin Virginia Beach JV | Successor
Schedule of Equity Method Investments [Line Items]
Investment in partnership			3,844	3,844
Westin Virginia Beach JV | Predecessor
Schedule of Equity Method Investments [Line Items]
Investment in partnership		$ 3,488

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Mortgage Notes Payable (Tables)

12 Months Ended

Dec. 31, 2014

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

The Company’s and the Predecessor's mortgage note payable as of December 31, 2014 and December 31, 2013 consist of the following, respectively (in thousands):

Successor
	Outstanding Mortgage Note Payable
Encumbered Properties	December 31, 2014		Interest Rate	Payment	Maturity
Baltimore Courtyard & Providence Courtyard	$	45,500	4.3%	Interest Only, Principal paid at Maturity	April 2019

Predecessor
	Outstanding Mortgage Note Payable
Encumbered Properties	December 31, 2013		Interest Rate	Payment	Maturity
Baltimore Courtyard & Providence Courtyard	$	41,449	4.55% plus the greater of (i) three-month LIBOR or (ii) a LIBOR floor of 0.50%(1)	Principal and Interest	January 2016

______________________________________________________________________________________________

⁽¹⁾5.05% at December 31, 2013

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Leases (Tables)

12 Months Ended

Dec. 31, 2014

Leases [Abstract]

Schedule of Future Minimum Lease Payments for Operating Leases

The future minimum rental commitments for the Georgia Tech Hotel are as follows (in thousands):

	Minimum Rental Commitments		Amortization of Lease Intangible to Rent Expense
Year ended December 31, 2015	$	4,400	$	433
Year ended December 31, 2016	4,400		433
Year ended December 31, 2017	4,400		433
Year ended December 31, 2018	4,400		433
Year ended December 31, 2019	4,400		433
Thereafter	60,133		5,895
Total	$	82,133	$	8,060

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Commitments and Contingencies - Narrative (Details) (USD $)	12 Months Ended
	Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]
Capitalization rate	8.40%
Closing costs payable in 2015	$ 3,000,000
Closing costs payable in 2016	500,000
Closing consideration payable	3,500,000
Minimum equity raised from offering for contingent consideration	$ 70,000,000

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Variable Interest Entities and Investments in Unconsolidated Entities - VIE's (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Variable Interest Entity [Line Items]
Partnership loan balance	$ 45,500
Successor
Variable Interest Entity [Line Items]
Partnership loan balance	30,603
Investment in partnership	5,475
Partnership maximum exposure to loss	36,078
Predecessor
Variable Interest Entity [Line Items]
Partnership loan balance		37,239
Investment in partnership		4,381
Partnership maximum exposure to loss		41,620
HGI Blacksburg JV
Variable Interest Entity [Line Items]
Investment in partnership	1,631	893
HGI Blacksburg JV | Successor
Variable Interest Entity [Line Items]
Partnership loan balance	10,063
Investment in partnership	1,631
Partnership maximum exposure to loss	11,694
HGI Blacksburg JV | Predecessor
Variable Interest Entity [Line Items]
Partnership loan balance		10,663
Investment in partnership		893
Partnership maximum exposure to loss		11,556
Westin Virginia Beach JV
Variable Interest Entity [Line Items]
Investment in partnership	3,844	3,488
Westin Virginia Beach JV | Successor
Variable Interest Entity [Line Items]
Partnership loan balance	20,540
Investment in partnership	3,844
Partnership maximum exposure to loss	24,384
Westin Virginia Beach JV | Predecessor
Variable Interest Entity [Line Items]
Partnership loan balance		26,576
Investment in partnership		3,488
Partnership maximum exposure to loss		$ 30,064

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Promissory Notes Payable (Tables)

12 Months Ended

Dec. 31, 2014

Debt Disclosure [Abstract]

Schedule of Promissory Notes

The Company’s promissory notes payable as of December 31, 2014 are as follows (in thousands):

	Outstanding Promissory Notes Payable
Use of Proceeds	December 31, 2014		Interest Rate		Payment	Maturity
Barceló acquisition	$	63,074	6.8	%	Interest Only	See below
Property improvement plan	1,775		4.5	%	Interest Only	March 2019
Grace Acquisition deposit	—		6.0	%	Interest Only	May 2015

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Accounts Payable and Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2014

Payables and Accruals [Abstract]

Schedule of Accounts Payable and Accrued Liabilities

The following is a summary of the components of accounts payable and accrued expenses (in thousands):

	Successor		Predecessor
	December 31, 2014		December 31, 2013
Trade accounts payable and accrued expenses	$	7,412	$	2,745
Contingent consideration from Barceló Acquisition (see Note 11)	2,384		—
Deferred payment for Barceló Acquisition (see Note 11)	3,471		—
Accrued salaries and related liabilities	952		819
Georgia Tech Hotel lease obligation	—		1,733
Total	$	14,219	$	5,297

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

The results of operations for the period from January 1 to March 20, 2014 for the Barceló Portfolio (the "Predecessor") and for the period from March 21 to December 31, 2014 for the Company (the "Successor") are not necessarily indicative of the results for the entire year because of the impact of seasonal or short-term variations related to the hotel industry. Certain prior period amounts have been reclassified to conform to current period presentation.

Basis of Accounting

The accompanying consolidated financial statements of the Company are prepared on the accrual basis of accounting in accordance with GAAP.

Development Stage Company

On February 3, 2014, the Company raised proceeds sufficient to break escrow in connection with its IPO. The Company received and accepted aggregate subscriptions in excess of the minimum $2.0 million and issued shares of common stock to its initial investors who were admitted as stockholders. The Company acquired the Barceló Portfolio through fee simple, leasehold and joint venture interests and commenced operations on March 21, 2014, and as of such date was no longer considered to be a development stage company.

Principles of Consolidation/Combination and Basis of Presentation

The accompanying consolidated/combined financial statements include the accounts of the Company and its subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity for which the Company is the primary beneficiary.

The Predecessor represents hospitality assets and operations owned by Barceló Crestline Corporation and its consolidated subsidiaries ("BCC"), which historically have been maintained in various legal entities. Historically, financial statements have not been prepared for the Predecessor as a discrete stand-alone entity. The accompanying consolidated/combined financial statements for the Predecessor as of December 31, 2013, for the period from January 1 to March 20, 2014 and for the year ended December 31, 2013 have been derived from the historical accounting records of BCC and reflect the assets, liabilities, equity, revenue and expenses directly attributable to the Predecessor, as well as allocations deemed reasonable by management, to present the combined financial position, results of operations, changes in equity, and cash flows of the Predecessor on a stand-alone basis. Included in the accompanying consolidated/combined statement of operations for the period from March 21 to December 31, 2014 is $0.2 million of costs related to the Company for the period from January 1 to March 20, 2014.

Use of Estimates

The preparation of the accompanying consolidated/combined financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding purchase price allocations to record investments in real estate, the useful lives of real estate and real estate taxes, as applicable.

Real Estate Investments and Below-Market Lease

The Company allocates the purchase price of properties acquired in real estate investments to tangible and identifiable intangible assets acquired based on their respective fair values at the date of acquisition. Tangible assets include land, land improvements, buildings and fixtures. The Company utilizes various estimates, processes and information to determine the property value. Estimates of value are made using customary methods, including data from appraisals, comparable sales, discounted cash flow analysis and other methods. Amounts allocated to land, land improvements, buildings and fixtures are based on purchase price allocation studies performed by independent third parties or on the Company’s analysis of comparable properties in the Company’s portfolio. Identifiable intangible assets and liabilities, as applicable, are typically related to contracts, including operating lease agreements, ground lease agreements and hotel management agreements, which will be recorded at fair value.

In making estimates of fair values for purposes of allocating the purchase price, the Company utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. The Company also considers information obtained about each property as a result of the Company’s pre-acquisition due diligence in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed.

Investments in real estate that are not considered to be business combinations are recorded at cost. Improvements and replacements are capitalized when they extend the useful life of the asset. Costs of repairs and maintenance are expensed as incurred. Depreciation of the Company's assets is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings, 15 years for land improvements, five years for fixtures and the shorter of the useful life or the remaining lease term for leasehold interests.

The Company is required to make subjective assessments as to the useful lives of the Company’s assets for purposes of determining the amount of depreciation to record on an annual basis with respect to the Company’s investments in real estate. These assessments have a direct impact on the Company’s net income because if the Company were to shorten the expected useful lives of the Company’s investments in real estate, the Company would depreciate these investments over fewer years, resulting in more depreciation expense and lower net income on an annual basis.

A disposal of a component of the Company or a group of components of the Company is required to be reported in discontinued operations only if the disposal represents a strategic shift that has, or will have, a major effect on the Company's operations and financial results. The Company is required to present, for each comparative period, the assets and liabilities of a disposal group that includes a discontinued operation separately in the asset and liability sections, respectively, of the statement of financial position. As a result, the operations of sold properties through the date of their disposal will be included in continuing operations, unless the sale represents a strategic shift. However, the gain or loss on the sale of a property will be reported separately below income from continuing operations.

The below-market lease intangible is based on the difference between the market rent and the contractual rent and is discounted to a present value using an interest rate reflecting the Company's current assessment of the risk associated with the lease acquired. See Note 5. Acquired lease intangible assets are amortized over the remaining lease term. The amortization of a below-market lease is recorded as an increase to rent expense on the consolidated/combined statements of operations.

Impairment of Long Lived Assets and Investments in Unconsolidated Entities

When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. The estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of demand, competition and other factors. If impairment exists, due to the inability to recover the carrying value of a property, an impairment loss will be recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less the estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income. No such impairment losses were recorded in the periods presented.

Cash and Cash Equivalents

Cash and cash equivalents includes cash in bank accounts as well as investments in highly-liquid money market funds with original maturities of three months or less. The Federal Deposit Insurance Corporation ("FDIC"), only insures amounts up to $250,000 per depositor per insured bank. The Company expects to have cash and cash equivalents and restricted cash deposited in certain financial institutions in excess of federally insured levels.

Restricted Cash

Restricted cash consists of amounts required under mortgage agreements for future capital improvements to owned assets, future interest and property tax payments and excess cash flow deposits due to mortgage agreement restrictions. For purposes of the statement of cash flows, changes in restricted cash caused by changes to the amount needed for future capital improvements are treated as investing activities and changes related to future interest and real estate tax payments and excess cash flow deposits are treated as operating activities.

Deferred Financing Fees

Deferred financing fees represent commitment fees, legal fees and other costs associated with obtaining commitments for financing. These fees are amortized over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing fees are expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not be successful.

Variable Interest Entities

Accounting Standards Codification ("ASC") 810, Consolidation contains the guidance surrounding the definition of variable interest entities ("VIE"), the definition of variable interests and the consolidation rules surrounding VIEs. In general, VIEs are entities in which equity investors lack the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. The Company has variable interests in VIEs through its investments in entities which own the Westin Virginia Beach Town Center (the "Westin Virginia Beach") and the Hilton Garden Inn Blacksburg.

Once it is determined that the Company holds a variable interest in an entity, GAAP requires that the Company perform a qualitative analysis to determine (i) which entity has the power to direct the matters that most significantly impact the VIE’s financial performance; and (ii) if the Company has the obligation to absorb the losses of the VIE that could potentially be significant to the VIE or the right to receive the benefits of the VIE that could potentially be significant to the VIE. The entity that has both of these characteristics is deemed to be the primary beneficiary and is required to consolidate the VIE (See Note 4 - Variable Interest Entities and Investments in Unconsolidated Entities).

The Company classifies the distributions from its investments in unconsolidated entities in the consolidated/combined statement of cash flows based upon an evaluation of the specific facts and circumstances of each distribution. For example, distributions of cash generated by property operations are classified as cash flows from operating activities. However, distributions received as a result of property sales are classified as cash flows from investing activities.

Revenue Recognition

Hotel revenue is recognized as earned, which is generally defined as the date upon which a guest occupies a room or utilizes the hotel services.

Income Taxes

The Company intends to elect and qualify to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with its tax year ended December 31, 2014. In order to qualify as a REIT, the Company must annually distribute to its stockholders 90% of its REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding net capital gain, and must comply with various other organizational and operational requirements. If the Company qualifies for taxation as a REIT, it generally will not be subject to federal corporate income tax on that portion of its REIT taxable income that it distributes to its stockholders. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income, property tax and federal income and excise taxes on its undistributed income. The Company's hotels are leased to a taxable REIT subsidiary ("TRS") which is a wholly owned subsidiary of the OP. The TRS is subject to federal, state and local income taxes.

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for net operating loss, capital loss, and tax credit carryovers. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which such amounts are expected to be realized or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period when the new rate is enacted. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of available evidence, including future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies.

GAAP prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken in a tax return. The Company must determine whether it is "more-likely-than-not" that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Once it is determined that a position meets the more-likely-than-not recognition threshold, the position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement in order to determine the amount of benefit to recognize in the financial statements. This accounting standard applies to all tax positions related to income taxes. The Company recognizes accrued interest related to unrecognized tax benefits in interest expense and penalties in operating expenses.

Earnings/Loss per Share

The Company calculates basic income or loss per share by dividing net income or loss for the period by the weighted-average shares of its common stock outstanding for a respective period. Diluted income per share takes into account the effect of dilutive instruments, such as stock options and unvested stock awards, except when doing so would be anti-dilutive.

Advertising Costs

The Company expenses advertising costs as incurred. These costs were $0.4 million combined between the Predecessor and the Company for the year ended December 31, 2014 and $0.4 million for the Predecessor for the year ended December 31, 2013.

Allowance for Doubtful Accounts

Receivables consist principally of trade receivables from customers and are generally unsecured and are due within 30 to 90 days. The Company records a provision for uncollectible accounts using the allowance method. Expected credit losses associated with trade receivables are recorded as an allowance for doubtful accounts. The allowance for doubtful accounts is estimated based upon historical patterns of credit losses for aged receivables as well as specific provisions for certain identifiable, potentially uncollectible balances. When internal collection efforts on accounts have been exhausted, the accounts are written off and the associated allowance for doubtful accounts is reduced. Trade receivable balances, net of the allowance for doubtful accounts, are included in prepaid expenses and other assets in the accompanying consolidated/combined balance sheets, and are as follows (in thousands):

	Successor			Predecessor
	December 31, 2014			December 31, 2013
Trade receivables	$	1,388		$	788
Allowance for doubtful accounts	(45		)	(26		)
Trade receivables, net of allowance	$	1,343		$	762

Reportable Segments

The Company has determined that it has one reportable segment, with activities related to investing in real estate. The Company’s investments in real estate generate room revenue and other income through the operation of the properties, which comprise 100% of the total consolidated/combined revenues. Management evaluates the operating performance of the Company’s investments in real estate on an individual property level, none of which represent a reportable segment.

Recently Issued Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-08 Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360) - Reporting Discontinued Operations and Disclosure of Disposal of Components of an Entity. Under this standard, a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations only if the disposal represents a strategic shift that has, or will have, a major effect on an entity’s operations and financial results. In addition, it requires an entity to present, for each comparative period, the assets and liabilities of a disposal group that includes a discontinued operation separately in the asset and liability sections, respectively, of the statement of financial position. As a result, the operations of sold properties through the date of their disposal will be included in continuing operations, unless the sale represents a strategic shift. However, the gain or loss on the sale of a property will be reported separately below income from continuing operations. The Company adopted this ASU as of January 1, 2014. No prior year restatements are permitted for this change in policy. For purposes of earnings per share calculation, beginning in 2014 gains and losses on property sales will be included in continuing operations.

On May 28, 2014, the FASB issued ASU 2014-09 Revenue from Contracts with Customers ("ASU 2014-09"), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

In August 2014, the FASB issued ASU 2014-15 Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”), which describes how an entity should assess its ability to meet obligations and sets rules for how this information should be disclosed in the financial statements. The standard provides accounting guidance that will be used along with existing auditing standards. The adoption of ASU 2014-15 becomes effective for the Company on its fiscal year ending December 31, 2016, and all subsequent annual periods. Early adoption is permitted. The adoption of ASU 2014-15 is not expected to have a material effect on the Company's consolidated financial statements.

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value by Balance Sheet Grouping

The following table shows the carrying values and the fair values of material non-current liabilities that qualify as financial instruments, determined in accordance with the authoritative guidance for disclosures about fair value of financial instruments (in thousands):

	Successor				Predecessor
	December 31, 2014				December 31, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Mortgage note payable	$	45,500	$	44,582	$	41,449	$	38,921
Promissory notes payable	64,849		64,849		—		—
Contingent consideration on acquisition	2,384		2,384		—		—
Deferred consideration	3,471		3,471		—		—
Total	$	116,204	$	115,286	$	41,449	$	38,921

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Business Combination - Schedule of Business Acquisitions (Details) (Successor, USD $) In Thousands, unless otherwise specified	0 Months Ended
	Mar. 21, 2014
Successor
Assets acquired and liabilities assumed
Land	$ 12,061
Buildings and improvements	77,605
Below-market lease obligation	8,400
Furniture, fixtures and equipment	5,220
Restricted cash	619
Investment in unconsolidated entities	5,380
Prepaid expenses and other assets	2,314
Accounts payable and accrued expenses	(1,469)
Total assets acquired	110,130
Contingent consideration on acquisition	(2,268)
Seller financing of real estate investments	(58,074)
Seller financing of investment in unconsolidated entities	(5,000)
Deferred consideration	(3,400)
Total assets acquired, net	$ 41,388

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Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Successor
Accounts Payable and Accrued Expenses [Line Items]
Other accounts payable and accrued expenses	$ 7,412
Contingent consideration from acquisition	2,384
Deferred payment for acquisition	3,471
Accrued salaries and related liabilities	952
Georgia Tech Hotel lease obligation	0
Accounts Payable and Accrued Liabilities	14,219
Predecessor
Accounts Payable and Accrued Expenses [Line Items]
Other accounts payable and accrued expenses		2,745
Contingent consideration from acquisition		0
Deferred payment for acquisition		0
Accrued salaries and related liabilities		819
Georgia Tech Hotel lease obligation		1,733
Accounts Payable and Accrued Liabilities		$ 5,297

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CONSOLIDATED/COMBINED BALANCE SHEETS (USD $)	Dec. 31, 2014	Dec. 31, 2013
Equity
Total equity	$ 201,795,000	$ 88,690,000
Successor
Real estate investments:
Land	12,061,000
Buildings and improvements	81,176,000
Furniture, fixtures and equipment	5,308,000
Total real estate investments	98,545,000
Less: accumulated depreciation and amortization	(2,796,000)
Total real estate investments, net	95,749,000
Cash and cash equivalents	131,861,000
Acquisition deposit	75,000,000
Restricted cash	3,437,000
Investments in unconsolidated entities	5,475,000
Below-market lease asset, net	8,060,000
Prepaid expenses and other assets	11,801,000
Deferred financing fees, net	1,991,000
Total Assets	333,374,000
LIABILITIES AND EQUITY
Mortgage note payable	45,500,000
Promissory notes payable	64,849,000
Accounts payable and accrued expenses	14,219,000
Due to affiliates	7,011,000	600,000
Total liabilities	131,579,000
Equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued and outstanding	0
Common stock, $0.01 par value, 300,000,000 shares authorized, 10,163,206 and 8,888 shares issued and outstanding, respectively	102,000
Additional paid-in capital	221,379,000
Deficit	(19,686,000)
Members' equity	0
Total equity	201,795,000
Total Liabilities and Equity	333,374,000
Predecessor
Real estate investments:
Land		15,878,000
Buildings and improvements		118,356,000
Furniture, fixtures and equipment		13,297,000
Total real estate investments		147,531,000
Less: accumulated depreciation and amortization		(31,390,000)
Total real estate investments, net		116,141,000
Cash and cash equivalents		10,520,000
Acquisition deposit		0
Restricted cash		1,522,000
Investments in unconsolidated entities		4,381,000
Below-market lease asset, net		0
Prepaid expenses and other assets		1,830,000
Deferred financing fees, net		848,000
Total Assets		135,242,000
LIABILITIES AND EQUITY
Mortgage note payable		41,449,000
Promissory notes payable		0
Accounts payable and accrued expenses		5,297,000
Due to affiliates		0
Total liabilities		46,746,000
Equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued and outstanding		0
Common stock, $0.01 par value, 300,000,000 shares authorized, 10,163,206 and 8,888 shares issued and outstanding, respectively		0
Additional paid-in capital		0
Deficit		0
Members' equity		88,496,000
Total equity		88,496,000
Total Liabilities and Equity		$ 135,242,000

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Variable Interest Entities and Investments in Unconsolidated Entities - BSE/AH BLACKSBURG HOTEL, LLC (Details) (USD $)	3 Months Ended	9 Months Ended	3 Months Ended				5 Months Ended	0 Months Ended	3 Months Ended
	Mar. 20, 2014	Dec. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2013	Mar. 31, 2014	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014
Variable Interest Entity [Line Items]
Net income (loss) and comprehensive income (loss)	$ (605,000)	$ (14,841,000)
Predecessor
Variable Interest Entity [Line Items]
Total assets			135,242,000				135,242,000
Total liabilities			46,746,000				46,746,000
Hotel revenue	6,026,000						30,489,000
Interest expense	(531,000)						(2,265,000)
Net income (loss) and comprehensive income (loss)	(605,000)		(370,000)	468,000	978,000	(971,000)	105,000
Company's share of net income (loss)	(166,000)						(65,000)
Successor
Variable Interest Entity [Line Items]
Total assets		333,374,000							333,374,000
Total liabilities		131,579,000							131,579,000
Hotel revenue		26,163,000
Interest expense		(5,958,000)
Net income (loss) and comprehensive income (loss)		(14,841,000)						(5,282,000)	(5,928,000)	(3,549,000)	(82,000)
Company's share of net income (loss)		352,000
HGI Blacksburg JV
Variable Interest Entity [Line Items]
Difference in basis		600,000							600,000
HGI Blacksburg JV | Predecessor
Variable Interest Entity [Line Items]
Hotel revenue	687,000						4,440,000
Operating income (loss)	(47,000)						794,000
Interest expense	(97,000)						(465,000)
Net income (loss) and comprehensive income (loss)	(144,000)						329,000
Company's share of net income (loss)	(35,000)						79,000
Additional amortization expense	0						0
Company's share of net income (loss)	(35,000)						79,000
HGI Blacksburg JV | Successor
Variable Interest Entity [Line Items]
Total assets		14,659,000	14,835,000				14,835,000		14,659,000
Total liabilities		10,482,000	11,113,000				11,113,000		10,482,000
Hotel revenue		3,981,000
Operating income (loss)		887,000
Interest expense		(340,000)
Net income (loss) and comprehensive income (loss)		547,000
Company's share of net income (loss)		132,000
Additional amortization expense		(22,000)
Company's share of net income (loss)		$ 110,000

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CONSOLIDATED/COMBINED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended		5 Months Ended		9 Months Ended		12 Months Ended
	Mar. 20, 2014		Dec. 31, 2013		Dec. 31, 2014		Dec. 31, 2014
Cash flows from operating activities:
Net income (loss)	$ (605)				$ (14,841)
Cash flows from financing activities:
Proceeds from issuance of common stock, net			200				252,854
Successor
Cash flows from operating activities:
Net income (loss)					(14,841)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization					2,796
Amortization of deferred financing costs					595
Amortization of below-market lease obligation					340
Accretion of deferred consideration					71
Accretion of contingent consideration					116
Loss on disposal of property and equipment					0
Equity in (earnings) losses of unconsolidated entities					(352)
Distribution from unconsolidated affiliates					257
Share-based payments					22
Changes in assets and liabilities:
Prepaid expenses and other assets					(7,923)
Restricted cash					(783)
Due to affiliates					5,042
Accounts payable and accrued expenses					5,010
Net cash (used in) provided by operating activities					(9,650)
Cash flows from investing activities:
Acquisition of hotel assets of the Predecessor					(41,388)
Real estate investment improvements and purchases of property and equipment					(3,659)
Acquisition deposit					(75,000)
(Increase) decrease in restricted cash					(2,035)
Net cash used in investing activities					(122,082)
Cash flows from financing activities:
Proceeds from issuance of common stock, net					249,569
Payments of offering costs					(28,071)
Dividends paid					(1,950)
Contributions from members					0
Distribution to members					0
Affiliate financing advancement					2,570
Affiliate financing repayment					(3,214)
Proceeds from affiliate note payable used to fund acquisition deposit					40,500
Repayment of affiliate note payable used to fund acquisition deposit					(40,500)		(40,500)
Payments of mortgage note payable					0
Proceeds from mortgage note payable					45,500
Proceeds from promissory note payable					1,775
Deferred financing fees					(2,586)
Net cash provided by (used in) financing activities					263,593
Net change in cash					131,861
Cash and cash equivalents, beginning of period					0
Cash and cash equivalents, end of period					131,861		131,861
Supplemental disclosure of cash flow information:
Interest paid					4,645
Taxes paid					760
Non-cash investing and financing activities:
Reclassification of deferred offering costs to additional paid-in capital					1,505
Offering costs in due to affiliates					1,969
Offering costs in accounts payable and accrued expenses					512
Real estate investment improvements and purchases of property and equipment in accounts payable and accrued expenses					1,033
Proceeds receivable from share sales					1,564	[1]
Seller financing of real estate investments					58,074
Seller financing of investment in unconsolidated entities					5,000
Contingent consideration on acquisition					2,268
Deferred consideration on acquisition					3,400
Dividends declared but not paid					1,368		1,368
Common stock issued through distribution reinvestment plan					1,520
Predecessor
Cash flows from operating activities:
Net income (loss)	(605)		105
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization	994		5,105
Amortization of deferred financing costs	75		196
Amortization of below-market lease obligation	0		0
Accretion of deferred consideration	0		0
Accretion of contingent consideration	0		0
Loss on disposal of property and equipment	0		74
Equity in (earnings) losses of unconsolidated entities	166		65
Distribution from unconsolidated affiliates	0		0
Share-based payments	0		0
Changes in assets and liabilities:
Prepaid expenses and other assets	(581)		455
Restricted cash	0		0
Due to affiliates	0		0
Accounts payable and accrued expenses	(605)		(182)
Net cash (used in) provided by operating activities	(556)		5,818
Cash flows from investing activities:
Acquisition of hotel assets of the Predecessor	0		0
Real estate investment improvements and purchases of property and equipment	(83)		(3,436)
Acquisition deposit	0		0
(Increase) decrease in restricted cash	(468)		1,163
Net cash used in investing activities	(551)		(2,273)
Cash flows from financing activities:
Proceeds from issuance of common stock, net	0		0
Payments of offering costs	0		0
Dividends paid	0		0
Contributions from members	0		227
Distribution to members	(800)		(3,922)
Affiliate financing advancement	0		0
Affiliate financing repayment	0		0
Proceeds from affiliate note payable used to fund acquisition deposit	0		0
Repayment of affiliate note payable used to fund acquisition deposit	0		0
Payments of mortgage note payable	(137)		(391)
Proceeds from mortgage note payable	0		3,440
Proceeds from promissory note payable	0		0
Deferred financing fees	0		(31)
Net cash provided by (used in) financing activities	(937)		(677)
Net change in cash	(2,044)		2,868
Cash and cash equivalents, beginning of period	10,520						10,520
Cash and cash equivalents, end of period	8,476		10,520
Supplemental disclosure of cash flow information:
Interest paid	458		1,548
Taxes paid	0		0
Non-cash investing and financing activities:
Reclassification of deferred offering costs to additional paid-in capital	0		0
Offering costs in due to affiliates	0		0
Offering costs in accounts payable and accrued expenses	0		0
Real estate investment improvements and purchases of property and equipment in accounts payable and accrued expenses	0		0
Proceeds receivable from share sales	0	[1]	0	[1]
Seller financing of real estate investments	0		0
Seller financing of investment in unconsolidated entities	0		0
Contingent consideration on acquisition	0		0
Deferred consideration on acquisition	0		0
Dividends declared but not paid	0		0
Common stock issued through distribution reinvestment plan	$ 0		$ 0

[1] The proceeds receivable from the sale of shares of common equity was received by the Company prior to the filing date of this Annual Report on Form 10-K.

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Related Party Transactions and Arrangements - Fees Paid in Connection With the Operations of the Company (Details) (USD $) In Thousands, unless otherwise specified	5 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Advisor
Related Party Transaction [Line Items]
Fees incurred with the offering	$ 0	$ 2,413
Due to affiliates	0	0	0
Property Manager
Related Party Transaction [Line Items]
Fees incurred with the offering	2,445	2,841
Due to affiliates	158	248	158
Dealer manager
Related Party Transaction [Line Items]
Fees incurred with the offering		5,730	0
Due to affiliates	0	4,645	0
Acquisition fees | Advisor
Related Party Transaction [Line Items]
Fees incurred with the offering	0	1,598
Due to affiliates	0	0	0
Financing coordination fees | Advisor
Related Party Transaction [Line Items]
Fees incurred with the offering	0	815
Due to affiliates	0	0	0
Interest payment related to the Grade deposit promissory note
Related Party Transaction [Line Items]
Fees incurred with the offering	0	151
Due to affiliates	0	0	0
Total management fees and reimbursable expenses paid to Sub-Property Manager | Property Manager
Related Party Transaction [Line Items]
Fees incurred with the offering	2,445	2,579
Due to affiliates	158	228	158
Interest related to the Property improvement plan promissory note | Property Manager
Related Party Transaction [Line Items]
Fees incurred with the offering	0	63
Due to affiliates	0	20	0
Transaction fees and expenses | Dealer manager
Related Party Transaction [Line Items]
Fees incurred with the offering		5,270	0
Due to affiliates	0	4,645	0
Advisory and investment banking fee | Dealer manager
Related Party Transaction [Line Items]
Fees incurred with the offering		460	0
Due to affiliates	0	0	0
Total management fees incurred | Property Manager
Related Party Transaction [Line Items]
Fees incurred with the offering	0	262
Due to affiliates	$ 0	$ 20	$ 0

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Quarterly Results (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2014

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information

Presented below is a summary of the unaudited quarterly financial information for the years ended December 31, 2014 2013:

	Quarters Ended
	Predecessor			Successor
(In thousands, except for share amounts)	Period from January 1 to March 20, 2014			Period from March 21 to March 31, 2014			June 30, 2014			September 30, 2014			December 31, 2014
Total revenues	$	8,245		$	1,320		$	11,460		$	11,387		$	10,704
Net loss attributable to stockholders	$	(605	)	$	(5,282	)	$	(82	)	$	(3,549	)	$	(5,928	)
Basic and diluted weighted average common shares outstanding	NA			68,622			398,796			2,792,350			7,959,303
Basic and diluted net loss per share attributable to stockholders	NA			$	(76.97	)	$	(0.21	)	$	(1.27	)	$	(0.74	)

	Quarters Ended
	Predecessor
(In thousands, except for share amounts)	March 31, 2013			June 30, 2013		September 30, 2013		December 31, 2013
Total revenues	$	8,776		$	10,988	$	10,413	$	9,620
Net income (loss) attributable to stockholders	$	(971	)	$	978	$	468	$	(370	)
Basic and diluted weighted average common shares outstanding	NA			NA		NA		NA
Basic and diluted net loss per share attributable to stockholders	NA			NA		NA		NA

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Subsequent Events - Narrative (Details) (USD $)	5 Months Ended	12 Months Ended	0 Months Ended				3 Months Ended
	Dec. 31, 2013	Dec. 31, 2014	Mar. 15, 2015	Mar. 02, 2015	Feb. 02, 2015	Jan. 02, 2015	Mar. 15, 2015
Subsequent Event [Line Items]
Common stock, outstanding		10,163,206
Proceeds from issuance of common stock, net	$ 200,000	$ 252,854,000
Share price (in dollars per share)		$ 22.50
Subsequent event
Subsequent Event [Line Items]
Common stock, outstanding			15,102,299				15,102,299
Proceeds from issuance of common stock, net			375,087,000				122,233,000
Value of common stock			377,200,000				377,200,000
Share price (in dollars per share)			$ 25				$ 25
Share price DRIP (in dollars per share)			$ 23.75				$ 23.75
Dividends paid				1,700,000	1,600,000	1,400,000
Cash dividend				900,000	800,000	700,000
Payments for purchase of shares under DRIP				$ 800,000	$ 800,000	$ 700,000
Share reallocated under DRIP (in shares)				33,643.3684210526	31,525.1368421053	27,223.2

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Subsequent Events

12 Months Ended

Dec. 31, 2014

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

The Company has evaluated subsequent events through the filing of this Annual Report on Form 10-K, and determined that there have not been any events that have occurred that would require adjustments to disclosures in the accompanying consolidated financial statements except for the following transactions:

Sales of Common Stock

As of March 15, 2015, the Company had 15.1 million shares of common stock outstanding, including unvested restricted shares and shares issued under the DRIP. Total gross proceeds, net of repurchases, from these issuances were $375.1 million, including proceeds from shares issued under the DRIP. As of March 15, 2015, the aggregate value of all share issuances was$377.2 million based on a per share value of $25.00 (or $23.75 per share for shares issued under the DRIP).

Total capital raised to date, including shares issued under the DRIP, is as follows (in thousands):

Source of Capital	Inception to December 31, 2014		January 1, 2015 to March 15, 2015		Total
Common stock	$	252,854	$	122,233	$	375,087

Distributions Paid

On January 2, 2015, the Company paid distributions of $1.4 million to stockholders of record during the month of December 2014. Approximately $0.7 million of such distributions were paid in cash, while $0.7 million was reinvested to purchase 27,223 shares under the DRIP. On February 2, 2015, the Company paid distributions of $1.6 million to stockholders of record during the month of January 2015. Approximately $0.8 million of such distributions were paid in cash, while $0.8 million was reinvested to purchase 31,525 shares under the DRIP. On March 2, 2015, the Company paid distributions of $1.7 million to stockholders of record during the month of February 2015. Approximately $0.9 million of such distributions were paid in cash, while $0.8 million was reinvested to purchase 33,643 shares under the DRIP.

Acquisition

On February 27, 2015, the Company closed the Grace Acquisition (See Note 1 - Organization).

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Subsequent Events (Tables)

12 Months Ended

Dec. 31, 2014

Subsequent Events [Abstract]

Schedule of Common Stock Offerings

Total capital raised to date, including shares issued under the DRIP, is as follows (in thousands):

Source of Capital	Inception to December 31, 2014		January 1, 2015 to March 15, 2015		Total
Common stock	$	252,854	$	122,233	$	375,087

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Principles of Consolidation/Combination and Basis of Presentation

Principles of Consolidation/Combination and Basis of Presentation

The accompanying consolidated/combined financial statements include the accounts of the Company and its subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity for which the Company is the primary beneficiary.

The Predecessor represents hospitality assets and operations owned by Barceló Crestline Corporation and its consolidated subsidiaries ("BCC"), which historically have been maintained in various legal entities. Historically, financial statements have not been prepared for the Predecessor as a discrete stand-alone entity. The accompanying consolidated/combined financial statements for the Predecessor as of December 31, 2013, for the period from January 1 to March 20, 2014 and for the year ended December 31, 2013 have been derived from the historical accounting records of BCC and reflect the assets, liabilities, equity, revenue and expenses directly attributable to the Predecessor, as well as allocations deemed reasonable by management, to present the combined financial position, results of operations, changes in equity, and cash flows of the Predecessor on a stand-alone basis. Included in the accompanying consolidated/combined statement of operations for the period from March 21 to December 31, 2014 is $0.2 million of costs related to the Company for the period from January 1 to March 20, 2014.

Use of Estimates

Use of Estimates

The preparation of the accompanying consolidated/combined financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding purchase price allocations to record investments in real estate, the useful lives of real estate and real estate taxes, as applicable.

Real Estate Investments and Below-Market Lease

Real Estate Investments and Below-Market Lease

The Company allocates the purchase price of properties acquired in real estate investments to tangible and identifiable intangible assets acquired based on their respective fair values at the date of acquisition. Tangible assets include land, land improvements, buildings and fixtures. The Company utilizes various estimates, processes and information to determine the property value. Estimates of value are made using customary methods, including data from appraisals, comparable sales, discounted cash flow analysis and other methods. Amounts allocated to land, land improvements, buildings and fixtures are based on purchase price allocation studies performed by independent third parties or on the Company’s analysis of comparable properties in the Company’s portfolio. Identifiable intangible assets and liabilities, as applicable, are typically related to contracts, including operating lease agreements, ground lease agreements and hotel management agreements, which will be recorded at fair value.

In making estimates of fair values for purposes of allocating the purchase price, the Company utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. The Company also considers information obtained about each property as a result of the Company’s pre-acquisition due diligence in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed.

Investments in real estate that are not considered to be business combinations are recorded at cost. Improvements and replacements are capitalized when they extend the useful life of the asset. Costs of repairs and maintenance are expensed as incurred. Depreciation of the Company's assets is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings, 15 years for land improvements, five years for fixtures and the shorter of the useful life or the remaining lease term for leasehold interests.

The Company is required to make subjective assessments as to the useful lives of the Company’s assets for purposes of determining the amount of depreciation to record on an annual basis with respect to the Company’s investments in real estate. These assessments have a direct impact on the Company’s net income because if the Company were to shorten the expected useful lives of the Company’s investments in real estate, the Company would depreciate these investments over fewer years, resulting in more depreciation expense and lower net income on an annual basis.

A disposal of a component of the Company or a group of components of the Company is required to be reported in discontinued operations only if the disposal represents a strategic shift that has, or will have, a major effect on the Company's operations and financial results. The Company is required to present, for each comparative period, the assets and liabilities of a disposal group that includes a discontinued operation separately in the asset and liability sections, respectively, of the statement of financial position. As a result, the operations of sold properties through the date of their disposal will be included in continuing operations, unless the sale represents a strategic shift. However, the gain or loss on the sale of a property will be reported separately below income from continuing operations.

The below-market lease intangible is based on the difference between the market rent and the contractual rent and is discounted to a present value using an interest rate reflecting the Company's current assessment of the risk associated with the lease acquired. See Note 5. Acquired lease intangible assets are amortized over the remaining lease term. The amortization of a below-market lease is recorded as an increase to rent expense on the consolidated/combined statements of operations.

Impairment of Long Lived Assets and Investments in Unconsolidated Entities

Impairment of Long Lived Assets and Investments in Unconsolidated Entities

When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. The estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of demand, competition and other factors. If impairment exists, due to the inability to recover the carrying value of a property, an impairment loss will be recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less the estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income. No such impairment losses were recorded in the periods presented.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents includes cash in bank accounts as well as investments in highly-liquid money market funds with original maturities of three months or less. The Federal Deposit Insurance Corporation ("FDIC"), only insures amounts up to $250,000 per depositor per insured bank. The Company expects to have cash and cash equivalents and restricted cash deposited in certain financial institutions in excess of federally insured levels.

Restricted Cash

Restricted Cash

Restricted cash consists of amounts required under mortgage agreements for future capital improvements to owned assets, future interest and property tax payments and excess cash flow deposits due to mortgage agreement restrictions. For purposes of the statement of cash flows, changes in restricted cash caused by changes to the amount needed for future capital improvements are treated as investing activities and changes related to future interest and real estate tax payments and excess cash flow deposits are treated as operating activities.

Deferred Financing Fees

Deferred Financing Fees

Deferred financing fees represent commitment fees, legal fees and other costs associated with obtaining commitments for financing. These fees are amortized over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing fees are expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not be successful.

Variable Interest Entities

Variable Interest Entities

Accounting Standards Codification ("ASC") 810, Consolidation contains the guidance surrounding the definition of variable interest entities ("VIE"), the definition of variable interests and the consolidation rules surrounding VIEs. In general, VIEs are entities in which equity investors lack the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. The Company has variable interests in VIEs through its investments in entities which own the Westin Virginia Beach Town Center (the "Westin Virginia Beach") and the Hilton Garden Inn Blacksburg.

Once it is determined that the Company holds a variable interest in an entity, GAAP requires that the Company perform a qualitative analysis to determine (i) which entity has the power to direct the matters that most significantly impact the VIE’s financial performance; and (ii) if the Company has the obligation to absorb the losses of the VIE that could potentially be significant to the VIE or the right to receive the benefits of the VIE that could potentially be significant to the VIE. The entity that has both of these characteristics is deemed to be the primary beneficiary and is required to consolidate the VIE (See Note 4 - Variable Interest Entities and Investments in Unconsolidated Entities).

The Company classifies the distributions from its investments in unconsolidated entities in the consolidated/combined statement of cash flows based upon an evaluation of the specific facts and circumstances of each distribution. For example, distributions of cash generated by property operations are classified as cash flows from operating activities. However, distributions received as a result of property sales are classified as cash flows from investing activities.

Revenue Recognition

Revenue Recognition

Hotel revenue is recognized as earned, which is generally defined as the date upon which a guest occupies a room or utilizes the hotel services.

Income Taxes

Income Taxes

The Company intends to elect and qualify to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with its tax year ended December 31, 2014. In order to qualify as a REIT, the Company must annually distribute to its stockholders 90% of its REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding net capital gain, and must comply with various other organizational and operational requirements. If the Company qualifies for taxation as a REIT, it generally will not be subject to federal corporate income tax on that portion of its REIT taxable income that it distributes to its stockholders. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income, property tax and federal income and excise taxes on its undistributed income. The Company's hotels are leased to a taxable REIT subsidiary ("TRS") which is a wholly owned subsidiary of the OP. The TRS is subject to federal, state and local income taxes.

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for net operating loss, capital loss, and tax credit carryovers. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which such amounts are expected to be realized or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period when the new rate is enacted. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of available evidence, including future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies.

GAAP prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken in a tax return. The Company must determine whether it is "more-likely-than-not" that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Once it is determined that a position meets the more-likely-than-not recognition threshold, the position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement in order to determine the amount of benefit to recognize in the financial statements. This accounting standard applies to all tax positions related to income taxes. The Company recognizes accrued interest related to unrecognized tax benefits in interest expense and penalties in operating expenses.

Earnings/ Loss per Share

Earnings/Loss per Share

The Company calculates basic income or loss per share by dividing net income or loss for the period by the weighted-average shares of its common stock outstanding for a respective period. Diluted income per share takes into account the effect of dilutive instruments, such as stock options and unvested stock awards, except when doing so would be anti-dilutive.

Advertising Costs

Advertising Costs

The Company expenses advertising costs as incurred.

Allowance for Doubtful Accounts

Allowance for Doubtful Accounts

Receivables consist principally of trade receivables from customers and are generally unsecured and are due within 30 to 90 days. The Company records a provision for uncollectible accounts using the allowance method. Expected credit losses associated with trade receivables are recorded as an allowance for doubtful accounts. The allowance for doubtful accounts is estimated based upon historical patterns of credit losses for aged receivables as well as specific provisions for certain identifiable, potentially uncollectible balances. When internal collection efforts on accounts have been exhausted, the accounts are written off and the associated allowance for doubtful accounts is reduced.

Reportable Segments

Reportable Segments

The Company has determined that it has one reportable segment, with activities related to investing in real estate. The Company’s investments in real estate generate room revenue and other income through the operation of the properties, which comprise 100% of the total consolidated/combined revenues. Management evaluates the operating performance of the Company’s investments in real estate on an individual property level, none of which represent a reportable segment.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-08 Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360) - Reporting Discontinued Operations and Disclosure of Disposal of Components of an Entity. Under this standard, a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations only if the disposal represents a strategic shift that has, or will have, a major effect on an entity’s operations and financial results. In addition, it requires an entity to present, for each comparative period, the assets and liabilities of a disposal group that includes a discontinued operation separately in the asset and liability sections, respectively, of the statement of financial position. As a result, the operations of sold properties through the date of their disposal will be included in continuing operations, unless the sale represents a strategic shift. However, the gain or loss on the sale of a property will be reported separately below income from continuing operations. The Company adopted this ASU as of January 1, 2014. No prior year restatements are permitted for this change in policy. For purposes of earnings per share calculation, beginning in 2014 gains and losses on property sales will be included in continuing operations.

On May 28, 2014, the FASB issued ASU 2014-09 Revenue from Contracts with Customers ("ASU 2014-09"), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

In August 2014, the FASB issued ASU 2014-15 Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”), which describes how an entity should assess its ability to meet obligations and sets rules for how this information should be disclosed in the financial statements. The standard provides accounting guidance that will be used along with existing auditing standards. The adoption of ASU 2014-15 becomes effective for the Company on its fiscal year ending December 31, 2016, and all subsequent annual periods. Early adoption is permitted. The adoption of ASU 2014-15 is not expected to have a material effect on the Company's consolidated financial statements.

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Schedule III - Real Estate and Accumulated Depreciation - Summary of Activity for Accumulated Depreciation (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Dec. 31, 2014
Land, buildings and improvements, at cost:
Beginning Balance	$ 89,666
Additions-Acquisitions	0
Capital improvements	3,571
Ending Balance	93,237
Accumulated depreciation and amortization:
Beginning Balance	0
Depreciation expense	(1,569)
Ending Balance	$ (1,569)

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Organization

12 Months Ended

Dec. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

Organization

American Realty Capital Hospitality Trust, Inc. (the "Company") was incorporated on July 25, 2013 as a Maryland corporation and intends to qualify as a real estate investment trust for U.S. federal income tax purposes ("REIT") beginning with the taxable year ended December 31, 2014. The Company was formed primarily to acquire lodging properties in the midscale limited service, extended stay, select service, upscale select service, and upper upscale full service segments within the hospitality sector. The Company has no limitation as to the brand of franchise or license with which the Company's hotels will be associated. All such properties may be acquired by the Company alone or jointly with another party. The Company may also originate or acquire first mortgage loans secured by real estate and invest in other real estate-related debt. As of December 31, 2014, the Company has acquired interests in six hotels through fee simple, leasehold and joint venture interests (the "Barceló Portfolio").

On January 7, 2014, the Company commenced its initial public offering ("IPO" or the "Offering") on a "reasonable best efforts" basis of up to 80,000,000 shares of common stock, $0.01 par value per share, at a price of $25.00 per share, subject to certain volume and other discounts, pursuant to a registration statement on Form S-11 (File No. 333-190698), as amended (the "Registration Statement"), filed with the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended. The Registration Statement also covers up to 21,052,631 shares of common stock available pursuant to the Distribution Reinvestment Plan (the "DRIP") under which the Company's common stockholders may elect to have their distributions reinvested in additional shares of the Company's common stock.

Until the filing of the Company's second quarterly financial filing with the SEC, pursuant to the Securities Exchange Act of 1934, as amended, following the earlier to occur of (i) the Company's acquisition of at least $2.0 billion in total investment portfolio assets or (ii) January 7, 2016, the per share purchase price in the IPO will be up to $25.00 per share (including the maximum allowed to be charged for commissions and fees) and shares issued under the DRIP will initially be equal to $23.75 per share, which is 95% of the initial per share offering price in the IPO. Thereafter, the per share purchase price will vary quarterly and will be equal to the Company's net asset value ("NAV") per share plus applicable commissions and fees in the case of the primary offering, and the per share purchase price in the DRIP will be equal to the NAV per share. On February 3, 2014, the Company received and accepted subscriptions in excess of the minimum offering amount of $2.0 million in Offering proceeds, broke escrow and issued shares of common stock to the initial investors who were admitted as stockholders. As of December 31, 2014, the Company had 10.2 million shares of common stock outstanding and had received total gross proceeds from the IPO of approximately $252.9 million, including shares issued under the DRIP. As of December 31, 2014, the aggregate value of all the common stock outstanding was $254.0 million based on a per share value of $25.00 (or $23.75 for shares issued under the DRIP).

Substantially all of the Company's business is conducted through American Realty Capital Hospitality Operating Partnership, L.P. (the "OP"), a Delaware limited partnership. The Company is the sole general partner and holds substantially all of the units of limited partner interests in the OP ("OP Units"). Additionally, American Realty Capital Hospitality Special Limited Partner, LLC (the "Special Limited Partner") contributed $2,020 to the OP in exchange for 90 OP Units, which represents a nominal percentage of the aggregate OP ownership. The holders of OP Units have the right to convert OP Units for the cash value of a corresponding number of shares of common stock or, at the option of the OP, a corresponding number of shares of common stock of the Company in accordance with the limited partnership agreement of the OP. The remaining rights of the limited partner interests are limited, however, and do not include the ability to replace the general partner or to approve the sale, purchase or refinancing of the OP's assets.

The Company has no direct employees. The Company has retained American Realty Capital Hospitality Advisors, LLC (the "Advisor") to manage certain aspects of its affairs on a day-to-day basis. American Realty Capital Hospitality Properties, LLC (the "Property Manager") serves as the Company's property manager and the Property Manager has retained Crestline Hotels & Resorts, LLC (the "Sub-Property Manager"), an entity under common control with the parent of American Realty Capital IX, LLC, (the "Sponsor") to provide services, including locating investments, negotiating financing and operating certain hotel assets in the Company's portfolio. Realty Capital Securities, LLC (the "Dealer Manager"), an entity under common control with the parent of the Sponsor serves as the dealer manager of the offering. The Advisor, Special Limited Partner, Property Manager, Sub-Property Manager and Dealer Manager are related parties and receive fees, distributions and other compensation for services related to the Offering and the investment and management of the Company's assets.

Grace Acquisition

On May 23, 2014, the Company entered into a Real Estate Sale Agreement to acquire (the "Grace Acquisition") the fee simple or leasehold interests in 126 hotels (the "Grace Portfolio") from W2007 Equity Inns Realty, LLC, W2007 Equity Inns Realty, L.P., W2007 EQI Urbana Partnership, L.P., W2007 EQI Seattle Partnership, L.P., W2007 EQI Savannah 2 Partnership, L.P., W2007 EQI Rio Rancho Partnership, L.P., W2007 EQI Orlando Partnership, L.P., W2007 EQI Orlando 2 Partnership, L.P., W2007 EQI Naperville Partnership, L.P., W2007 EQI Milford Partnership, L.P., W2007 EQI Louisville Partnership, L.P., W2007 EQI Knoxville Partnership, L.P., W2007 EQI Jacksonville Partnership I, L.P., W2007 EQI Indianapolis Partnership, L.P., W2007 EQI Houston Partnership, L.P., W2007 EQI HI Austin Partnership, L.P., W2007 EQI East Lansing Partnership, L.P., W2007 EQI Dalton Partnership, L.P., W2007 EQI College Station Partnership, L.P., W2007 EQI Carlsbad Partnership, L.P., W2007 EQI Augusta Partnership, L.P. and W2007 EQI Asheville Partnership, L.P. (collectively, the “Sellers”) which are indirectly owned by one or more Whitehall Real Estate Funds, an investment arm controlled by The Goldman Sachs Group, Inc.

On November 11, 2014, the Real Estate Sale Agreement was amended and restated to incorporate all amendments made to that date (the "Amended Purchase Agreement"). The Amended Purchase Agreement reduced the number of hotels to be acquired to the 116 hotels currently comprising the Grace Portfolio for an aggregate purchase price of $1.808 billion, exclusive of closing costs and subject to certain adjustments at closing and changed the scheduled close date to February 27, 2015.

As of December 31, 2014, the acquisition of the Grace Portfolio had not been completed. On such date the Company anticipated funding, pursuant to the terms of the Amended Purchase Agreement, approximately $230.1 million of the purchase price with cash generated through the Offering, funding approximately $903.9 million through the assumption of existing mortgage and mezzanine indebtedness (comprising the "Assumed Grace Mortgage Loan" and the "Assumed Grace Mezzanine Loan" and, collectively, the "Assumed Grace Indebtedness") and funding approximately $227.0 million through additional mortgage financing (the "Additional Grace Mortgage Loan" and, together with the Assumed Grace Indebtedness, the "Grace Indebtedness"). The Assumed Grace Mortgage Loan that the Company expected to assume is for $801.1 million at an interest rate of London Interbank Offered Rate ("LIBOR") plus 3.11% and the Assumed Grace Mezzanine Loan that the Company expected to assume is for $102.8 million at an interest rate of LIBOR plus 4.77%. The Assumed Grace Indebtedness will be secured by 96 of the 116 hotels in the Grace Portfolio and mature on May 1, 2016, subject to three (one-year) extension rights which, if all three are exercised, result in an outside maturity date of May 1, 2019. The Additional Grace Mortgage Loan will be secured by 20 of the 116 hotels in the Grace Portfolio and an additional hotel property already owned by a subsidiary of the OP and part of the Barceló Portfolio. The Additional Grace Mortgage Loan will mature on March 6, 2017, subject to a one-year extension right, which, if exercised, would result in an outside maturity date of March 6, 2018 and will have an interest rate equal to the greater of (i) a floating rate of interest equal to LIBOR plus 6.00% and (ii) 6.25%.

In addition, we anticipated that the remaining $447.1 million of the contract purchase price would be satisfied by the issuance of the preferred equity interests (the "Grace Preferred Equity Interests") in two newly-formed Delaware limited liability companies, ARC Hospitality Portfolio I Holdco, LLC and ARC Hospitality Portfolio II Holdco, LLC, each of which will be an indirect subsidiary of the Company and an indirect owner of the Grace Portfolio. The holders of the Grace Preferred Equity Interests will be entitled to monthly distributions at a rate of 7.50% per annum for the first 18 months following closing and 8.00% per annum thereafter. On liquidation, the holders of the Grace Preferred Equity Interests will be entitled to receive their original value (as reduced by redemptions) prior to any distributions being made to the Company or the Company's shareholders. After the earlier to occur of either (i) the date of repayment in full of the Company's currently outstanding unsecured obligations in the original principal amount of approximately $63.1 million (together with the approximately $3.5 million deferred payment with respect to the March 2014 acquisition of the Georgia Tech Hotel & Conference Center, which is due concurrently), which represents the Barceló Acquisition Promissory Note (See Note 7 - Promissory Notes Payable), or (ii) the date the gross amount of IPO proceeds received by the Company following the acquisition of the Grace Portfolio and payment of all acquisition related expenses (including payments to the Advisor and its affiliates) exceeds $100.0 million, the Company will be required to use 35.0% of any IPO proceeds to redeem the Grace Preferred Equity Interests at par, up to a maximum of $350.0 million in redemptions for any 12-month period. The Company will also be required, in certain circumstances, to apply debt proceeds to redeem the Grace Preferred Equity Interests at par. As of February 27, 2018, the Company will be required to have redeemed 50.0% of the Grace Preferred Equity Interests, and the Company will be required to redeem 100.0% of the Grace Preferred Equity Interests remaining outstanding at the earlier of (i) 90 days following the stated maturity date (including extension options) under the Grace Indebtedness, and (ii) February 27, 2019. In addition, the Company will have the right, at its option, to redeem the Grace Preferred Equity Interests, in whole or in part, at any time at par. The holders of the Grace Preferred Equity Interests will have certain consent rights over major actions by the Company relating to the Grace Portfolio. If the Company is unable to satisfy the redemption, distribution or other requirements of the Grace Preferred Equity Interests (including if there is a default under the related guarantees provided by the Company, the OP and the individual principals of the parent of the Sponsor), the holders of the Grace Preferred Equity Interests have certain rights, including the ability to assume control of the operations of the Grace Portfolio through the assumption of control of the two newly-formed Delaware limited liability companies. Due to the fact that the Grace Preferred Equity Interests will be mandatorily redeemable and certain of their other characteristics, the Grace Preferred Equity Interests will be treated as debt in accordance with accounting principles generally accepted in the United States of America ("GAAP").

The transaction closed as planned on February 27, 2015, see Note 16 - Subsequent Events.

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CONSOLIDATED/COMBINED BALANCE SHEETS (Parenthetical) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Common stock, outstanding	10,163,206
Successor
Preferred stock, par value	0.01
Preferred stock, authorized	50,000,000
Preferred stock, issued	0
Preferred stock, outstanding	0
Common stock, par value	0.01
Common stock, authorized	300,000,000
Common stock, issued	10,163,206
Common stock, outstanding	10,163,206
Predecessor
Preferred stock, par value		$ 0.01
Preferred stock, authorized		50,000,000
Preferred stock, issued		0
Preferred stock, outstanding		0
Common stock, par value		$ 0.01
Common stock, authorized		300,000,000
Common stock, issued		8,888
Common stock, outstanding		8,888

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Litigation

In the ordinary course of business, the Company may become subject to litigation or claims. There are no material legal proceedings pending or known to be contemplated against the Company at the date of this filing.

Environmental Matters

In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. The Company has acquired the Barceló Portfolio through fee simple, leasehold and joint venture interests and as of December 31, 2014, has not been notified by any governmental authority of any non-compliance, liability or other claim and is not aware of any other environmental condition that it believes will have a material adverse effect on the results of operations.

Contingent Consideration

Included as part of the acquisition of the Barceló Portfolio is a contingent consideration payable to BCC based on the operating results of the Baltimore Courtyard, Providence Courtyard and Stratford Homewood Suites. The amount payable is calculated by applying a capitalization rate of 8.4% to the excess earnings before interest, taxes, depreciation and amortization ("EBITDA") earned in the second year after the acquisition over an agreed upon target. If this target EBITDA is not met, no amount will be due to BCC, but if the EBITDA earned is higher than forecasted, the amount due to BCC could be higher than the liability recorded in the consolidated/combined balance sheets as of December 31, 2014.

Deferred Consideration

Included as part of the acquisition of the Barceló Portfolio is deferred consideration payable to BCC of $3.0 million and $0.5 million which was payable on March 21, 2015 and March 21, 2016, respectively. As part of the amendment to the Portfolio Owned Assets and Joint Venture Assets promissory notes, the full amount of $3.5 million is now payable within ten business days after the date the Company raises $70.0 million in common equity from the Offering after the closing of the Grace Acquisition and payment of all acquisition related expenses (including payments to the Advisor and its affiliates). The deferred consideration does not bear interest.

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Document and Entity Information (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Mar. 15, 2015	Jun. 30, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.
Entity Central Index Key	0001583077
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Document Type	10-K
Document Period End Date	Dec. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Common Stock, Shares Outstanding		15,095,634
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 21.1

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Related Party Transactions and Arrangements

12 Months Ended

Dec. 31, 2014

Related Party Transactions [Abstract]

Related Party Transactions and Arrangements

Related Party Transactions and Arrangements

As of December 31, 2014, the Special Limited Partner owned 8,888 shares of the Company’s outstanding common stock. The Advisor and its affiliates are entitled to a variety of fees, and may incur and pay costs and fees on behalf of the Company for which they are entitled to reimbursement. The Company had a payable due to affiliates related to operating and Offering costs of $7.0 million and $0.6 million as of December 31, 2014 and December 31, 2013, respectively.

Fees Paid in Connection with the Offering

The Dealer Manager is paid fees and compensation in connection with the sale of the Company's common stock in the Offering. The Dealer Manager is paid a selling commission of up to 7.0% of the per share purchase price of the Company’s offering proceeds before reallowance of commissions earned by participating broker-dealers. In addition, the Dealer Manager is paid up to 3.0% of the gross proceeds from the sale of shares, before reallowance to participating broker-dealers, as a dealer-manager fee. The Dealer Manager may reallow its dealer-manager fee to participating broker-dealers. Alternatively, a participating broker dealer may elect to receive a fee equal to 7.5% of the gross proceeds from the sale of shares by such participating broker dealer, with 2.5% thereof paid at the time of such sale and 1.0% thereof paid on each anniversary of the closing of such sale up to and including the fifth anniversary of the closing of such sale. If this option is elected, the dealer manager fee will be reduced to 2.5% of gross proceeds.

The table below shows the fees incurred from and payable to the Dealer Manager for the Offering during the year ended December 31, 2014 and 2013, respectively, and the associated payable as of December 31, 2014 and December 31, 2013, which is recorded in due to affiliates on the Company's consolidated/combined balance sheets (in thousands):

	Year Ended   December 31,				Payable as of
	2014		2013		December 31, 2014		December 31, 2013
Total commissions and fees incurred from the Dealer Manager	$	24,099	$	—	$	153	$	—

The Company had a receivable from the Dealer Manager for proceeds from the IPO of $1.6 million as of December 31, 2014 which is recorded in prepaid expenses and other assets on the Company's consolidated/combined balance sheets. No amount were receivable as of December 31, 2013.

The Advisor and its affiliates are paid compensation and/or receive reimbursement for services relating to the Offering, including transfer agency services provided by an affiliate of the Dealer Manager. The Company is responsible for Offering and related costs up to a maximum of 2.0% of gross proceeds received from the Offering, measured at the end of the Offering. Offering costs in excess of the 2.0% cap as of the end of the Offering are the Advisor’s responsibility. As of December 31, 2014 and December 31, 2013, Offering and related costs exceeded 2.0% of gross proceeds received from the Offering by $2.4 million and $1.5 million, respectively, due to the ongoing nature of the Offering.

All Offering costs incurred by the Company or its affiliated entities on behalf of the Company have been charged to additional paid-in capital on the accompanying consolidated/combined balance sheets. Offering costs were reclassified from deferred costs to stockholders’ equity when the Company commenced its Offering, and included all expenses incurred by the Company in connection with its Offering as of such date. As of December 31, 2013, such costs totaled $1.5 million. The table below shows compensation and reimbursements incurred and payable to the Advisor and its affiliates for services relating to the Offering during the year ended December 31, 2014 and 2013, respectively, and the associated amounts payable as of December 31, 2014 and December 31, 2013, which is recorded in due to affiliates on the Company's consolidated/combined balance sheets (in thousands):

	Year Ended   December 31,				Payable as of
	2014		2013		December 31, 2014		December 31, 2013
Total compensation and reimbursement for services provided by the Advisor and its affiliates relating to the Offering	$	3,915	$	644	$	1,885	$	644

In addition to the above, the Company incurred Offering related expenses at the Georgia Tech Hotel, in which the Company owns the leasehold interest. The table below shows the fees incurred from and payable to Georgia Tech Hotel during the year ended December 31, 2014 and 2013, respectively, and the associated payable as of December 31, 2014 and December 31, 2013, which is recorded in due to affiliates on the Company's consolidated/combined balance sheets (in thousands):

	Year Ended   December 31,				Payable as of
	2014		2013		December 31, 2014		December 31, 2013
Total offering related costs incurred to leased hotel	$	60	$	—	$	60	$	—

Fees Paid in Connection With the Operations of the Company

Fees Paid to the Advisor

The Advisor receives an acquisition fee of 1.5% of the contract purchase price of each acquired property and 1.5% of the amount advanced for any loan or other investment. The Advisor may also be reimbursed for expenses incurred in the process of acquiring properties, in addition to third-party costs the Company may pay directly to, or reimburse the Advisor for. Additionally, the Company may reimburse the Advisor for legal expenses it or its affiliates directly incur in the process of acquiring properties in an amount not to exceed 0.1% of the contract purchase price of the Company’s assets acquired. Once the proceeds from the Offering have been fully invested, the aggregate amount of acquisition fees and financing coordination fees (as described below) may not exceed 1.9% of the contract purchase price, for any new investments, including reinvested proceeds, and the amount advanced for any loan or other investment, for all assets acquired. In no event will the total of all acquisition fees, acquisition expenses and any financing coordination fees (as described below) payable with respect the Company's portfolio exceed 4.5% of the contract purchase price or 4.5% of the amount advanced for a loan or other investment, in the aggregate for all Company investments.

If the Advisor provides services in connection with the origination or refinancing of any debt that the Company obtains and uses to acquire properties or to make other permitted investments, or that is assumed, directly or indirectly, in connection with the acquisition of properties, the Company will pay the Advisor or its assignees a financing coordination fee equal to 0.75% of the amount available and/or outstanding under such financing, subject to certain limitations.

The table below depicts the acquisition and financing coordination fees charged by the Advisor in connection with the operations of the Company for the year ended December 31, 2014 and 2013, respectively, and the associated payable as of December 31, 2014 and December 31, 2013, which is recorded in due to affiliates on the Company's consolidated/combined balance sheets (in thousands):

	Year Ended   December 31,				Payable as of
	2014		2013		December 31, 2014		December 31, 2013
Acquisition fees	$	1,598	$	—	$	—	$	—
Financing coordination fees	815		—		—		—
	$	2,413	$	—	$	—	$	—

For its asset management services, the Company causes the OP to issue (subject to periodic approval by the board of directors) to the Advisor performance-based restricted partnership units of the OP ("Class B Units") on a quarterly basis in an amount equal to:

• the cost of the Company’s assets or the lower of the cost of assets and the applicable quarterly NAV, once the Company begins calculating NAV, multiplied by

•0.1875%, divided by

•the value of one share of common stock as of the last day of such calendar quarter, which is equal initially to $22.50 (the Offering price minus selling commissions and dealer manager fees) and, at such time as the Company calculates NAV, to per share NAV.

The Advisor is entitled to receive distributions on the vested and unvested Class B Units it receives in connection with its asset management subordinated participation at the same rate as distributions received on the Company’s common stock. Such distributions are in addition to the incentive fees the Advisor and its affiliates may receive from the Company, including, without limitation, the annual subordinated performance fee and the subordinated participation in net sales proceeds, the subordinated incentive listing distribution or the subordinated distribution upon termination of the advisory agreement, each as described below.

The restricted Class B Units do not become unrestricted Class B Units until certain performance conditions are satisfied, including the adjusted market value of the OP’s assets plus applicable distributions equals or exceeds the aggregate capital contributed by investors plus an amount equal to a 6.0% cumulative, pre-tax, non-compounded annual return to investors. Asset management services were performed by the Advisor for the year endedDecember 31, 2014, and 27,821 Class B Units have been issued as of December 31, 2014.

Fees Paid to the Sponsor

In connection with entering into the Grace Acquisition, the Company paid a $50.0 million customary earnest money deposit on May 27, 2014 which was partially funded by a $40.5 million draw on a $45.0 million promissory note with CARP, LLC, an entity under common control with the Sponsor (the "Affiliate Promissory Note"), which had a maturity date of May 27, 2015. As of December 31, 2014, the Affiliate Promissory Note had been repaid in full. See Note 7.

The table below shows the interest expense paid by the Company during the year ended December 31, 2014 and the associated payable as of December 31, 2014, which is recorded in due to affiliates on the Company's consolidated/combined balance sheets, and the interest expense paid by the Predecessor for the year ended December 31, 2013 and the associated payable as of December 31, 2013 (in thousands):

	Year Ended   December 31,				Payable as of
	2014		2013		December 31, 2014		December 31, 2013
Interest payment related to the Grace deposit promissory note	$	151	$	—	$	—	$	—

Fees Paid to the Property Manager

The Company pays a property management fee of up to 4.0% of the monthly gross receipts from the Company's properties to the Property Manager. The Property Manager, in turn, pays a portion of the property management fees to the Sub-Property Manager or a third-party sub-property manager, as applicable. The Company also reimburses the Sub-Property Manager or a third-party sub-property manager, as applicable, for property level expenses, as well as fees and expenses of such sub-property manager. However, the Company will not reimburse such sub-property managers for general overhead costs or for the wages and salaries and other employee-related expenses of employees of such sub-property managers, other than employees or subcontractors who are engaged in the on-site operation, management, maintenance or access control of the Company’s properties.

The Company also will pay to the Sub-Property Manager an annual incentive fee equal to 15% of the amount by which the operating profit from the properties managed by the Sub-Property Manager for such fiscal year (or partial fiscal year) exceeds 8.5% of the total investment of such properties. The Company may, in the future, pay similar fees to third-party sub-property managers. No incentive fee was payable by the Company during the year ended December 31, 2014.

For these purposes, “total investment” means the sum of (i) the price paid to acquire the property, including closing costs, conversion costs, and transaction costs; (ii) additional invested capital; and (iii) any other costs paid in connection with the acquisition of the property, whether incurred pre- or post-acquisition.

The Predecessor paid the Sub-Property Manager a similar property management fee and incentive fee.

The table below shows the management fees and reimbursable expenses incurred by the Company during the year ended December 31, 2014 and the associated payable as of December 31, 2014, which is recorded in due to affiliates on the Company's consolidated/combined balance sheets, and the management fees and reimbursable expenses incurred by the Predecessor for the year ended December 31, 2013 and the associated payable as of December 31, 2013, which is recorded in accounts payable and accrued expenses on the Predecessor's consolidated/combined balance sheets (in thousands):

	Year Ended   December 31,				Payable as of
	2014		2013		December 31, 2014		December 31, 2013
Total management fees and reimbursable expenses incurred from Sub-Property Manager	$	2,579	$	2,445	$	228	$	158
Total management fees incurred from Property Manager	262		—		20		—
	$	2,841	$	2,445	$	248	$	158

The Company pays the Sub-Property Manager interest on the promissory notes payable for the property improvement plan relating to the Barceló Portfolio. See Note 7. The table below shows the interest expense paid by the Company during the year ended December 31, 2014, and the associated payable as of December 31, 2014, which is recorded in due to affiliates on the Company's consolidated/combined balance sheets, and the interest expense paid by the Predecessor during the year ended December 31, 2013 and the associated payable as of December 31, 2013, which is recorded in accounts payable and accrued expenses on the Predecessor's consolidated/combined balance sheets (in thousands):

	Year Ended   December 31,				Payable as of
	2014		2013		December 31, 2014		December 31, 2013
Interest related to the Property improvement plan promissory note	$	63	$	—	$	20	$	—

Fees Paid to Other Affiliates

The Company entered into an agreement with RCS Capital, the investment banking and capital markets division of the Dealer Manager ("RCS Capital") to provide strategic advisory services and investment banking services required in the ordinary course of the Company's business, such as performing financial analysis, evaluating publicly traded comparable companies and assisting in developing a portfolio composition strategy, a capitalization structure to optimize future liquidity options and structuring operations. The Company has recorded the payment of the costs associated with this agreement of $0.9 million in prepaid expenses and other assets on the Company's consolidated/combined balance sheets and amortizes the costs associated with this agreement over the estimated remaining life of the Offering.

RCS Advisory Services, LLC ("RCS Advisory") is paid compensation for services provided to the Company on behalf of the Advisor based on time and expenses incurred. Additionally, the Company entered into a $1.0 million agreement with RCS Advisory to provide transaction management services in connection with the Grace Acquisition.  As of December 31, 2014, the Company had paid $0.6 million on account of this agreement.  The Company will pay an additional $0.1 million under this agreement, after which no further amounts will become due.

The Company entered into an agreement with RCS Capital to provide strategic and financial advice and assistance in connection with the Grace Acquisition, such as performing financial advisory and analysis services, due diligence and negotiation of the financial aspects of the acquisition. The Company will be charged 0.25% of the total transaction value for these services and has accrued $4.5 million associated with this agreement for the year endedDecember 31, 2014 and the associated payable, which is recorded in due to affiliates on the Company's consolidated/combined balance sheets.

The table below depicts related party fees and reimbursements charged by the Dealer Manager and RCS Advisory in connection with the operations of the Company for the year ended December 31, 2014 and 2013, respectively, and the associated payable as of December 31, 2014 and December 31, 2013 (in thousands):

	Year Ended   December 31,				Payable as of
	2014		2013		December 31, 2014		December 31, 2013
Transaction fees and expenses	$	5,270	$	—	$	4,645	$	—
Advisory and investment banking fee	460		—		—		—
Total related party fees and reimbursements	$	5,730	$	—	$	4,645	$	—

In order to increase operating cash flows and the ability to pay distributions from operating cash flows, the Advisor may elect to waive certain fees. Because the Advisor may waive certain fees, cash flow from operations that would have been paid to the Advisor may be available to pay distributions to stockholders. The fees that may be forgiven are not deferrals and accordingly, will not be paid to the Advisor. In certain instances, to improve the Company’s working capital, the Advisor may elect to absorb a portion of the Company’s general and administrative costs. No expenses were absorbed by the Advisor for the year ended December 31, 2014.

The Company reimburses the Advisor’s costs of providing administrative services, subject to the limitation that the Company will not reimburse the Advisor for any amount by which the Company’s operating expenses at the end of the four preceding fiscal quarters exceeds the greater of (a) 2.0% of average invested assets and (b) 25.0% of net income other than any additions to reserves for depreciation, bad debt, impairment or other similar non-cash reserves and excluding any gain from the sale of assets for that period. Additionally, the Company reimburses the Advisor for personnel costs in connection with other services; however, the Company will not reimburse the Advisor for personnel costs, including executive salaries, in connection with services for which the Advisor receives acquisition fees, acquisition expenses or real estate commissions.

The Advisor at its election may also contribute capital to enhance the Company’s cash position for working capital and distribution purposes. Any contributed capital amounts are not reimbursable to the Advisor. Further, any capital contributions are made without any corresponding issuance of common or preferred shares. There were no contributions to capital from the Advisor for the year ended December 31, 2014 and 2013.

Fees Paid in Connection with the Liquidation or Listing of the Company’s Real Estate Assets

The Company may pay the Advisor an annual subordinated performance fee calculated on the basis of the Company’s total return to stockholders, payable monthly in arrears, such that for any year in which the Company’s total return on stockholders’ capital exceeds 6.0% per annum, the Advisor will be entitled to 15.0% of the excess total return but not to exceed 10.0% of the aggregate total return for such year. This fee will be payable only upon the sale of assets, other disposition or refinancing of such assets, which results in the return on stockholders’ capital exceeding 6.0% per annum. No subordinated performance fees were incurred during the year ended December 31, 2014.

The Company may pay a brokerage commission to the Advisor on the sale of property, not to exceed the lesser of 2.0% of the contract sale price of the property and 50.0% of the total brokerage commission paid if a third-party broker is also involved; provided, however, that in no event may the real estate commissions paid to the Advisor, its affiliates and unaffiliated third parties exceed the lesser of 6.0% of the contract sales price and a reasonable, customary and competitive real estate commission, in each case, payable to the Advisor if the Advisor or its affiliates, as determined by a majority of the independent directors, provided a substantial amount of services in connection with the sale. No such fees were incurred during the year ended December 31, 2014.

The Company will pay the Special Limited Partner a subordinated participation in the net sales proceeds of the sale of real estate assets of 15.0% of the remaining net sale proceeds after return of capital contributions to investors plus payment to investors of a 6.0% cumulative, pre-tax, non-compounded annual return on the capital contributed by investors. The Special Limited Partner will not be entitled to the subordinated participation in net sale proceeds unless the Company’s investors have received a 6.0% cumulative non-compounded return on their capital contributions plus the return of their capital. No such participation became due and payable during the year ended December 31, 2014.

If the common stock of the Company is listed on a national exchange, the Company will pay the Special Limited Partner a subordinated incentive listing distribution of 15.0% of the amount by which the Company’s market value plus distributions exceeds the aggregate capital contributed by investors plus an amount equal to a 6.0% cumulative, pre-tax non-compounded annual return to investors. The Special Limited Partner will not be entitled to the subordinated incentive listing fee unless investors have received a 6.0% cumulative, pre-tax non-compounded return on their capital contributions plus the return of their capital. No such distributions were incurred during the year ended December 31, 2014. Neither the Special Limited Partner nor any of its affiliates can earn both the subordination participation in the net sale proceeds and the subordinated incentive listing distribution.

Upon termination or non-renewal of the Advisory agreement with the Advisor, with or without cause, the Special Limited Partner will be entitled to receive distributions from the OP equal to 15.0% of the amount by which the sum of the Company’s market value plus distributions exceeds the sum of the aggregate capital contributed by investors plus an amount equal to a 6.0% cumulative, pre-tax, non-compounded annual return to investors. The Special Limited Partner may elect to defer its right to receive a subordinated distribution upon termination until either a listing on a national securities exchange or other liquidity event occurs. No such distributions were incurred during the year ended December 31, 2014.

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CONSOLIDATED/COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended	5 Months Ended	9 Months Ended
	Mar. 20, 2014	Dec. 31, 2013	Dec. 31, 2014
Operating expenses
Provision for income taxes		$ 0
Net income (loss) and comprehensive income (loss)	(605)		(14,841)
Successor
Revenues
Rooms			26,163
Food and beverage			5,612
Other			3,096
Total revenue			34,871
Operating expenses
Rooms			5,411
Food and beverage			3,785
Management fees - related party			1,498
Other property-level operating expenses			13,049
Depreciation and amortization			2,796
Gain on disposal of assets			0
Rent			3,879
Total operating expenses			30,418
Income from operations			4,453
Interest income			103
Interest expense			(5,958)
Acquisition and transaction related costs			(10,884)
Equity in earnings (losses) of unconsolidated entities			352
General and administrative			(2,316)
Total other income (expenses)			(18,703)
Net income (loss) before taxes			(14,250)
Provision for income taxes			591
Net income (loss) and comprehensive income (loss)			(14,841)
Comprehensive Income (Loss)			(14,841)
Basic and diluted net loss per share (in dollars per share)			$ (5.25)
Basic and diluted weighted average shares outstanding (in shares)			2,826,352
Predecessor
Revenues
Rooms	6,026	30,489
Food and beverage	1,543	6,267
Other	676	3,041
Total revenue	8,245	39,797
Operating expenses
Rooms	1,405	6,340
Food and beverage	1,042	4,461
Management fees - related party	289	1,471
Other property-level operating expenses	3,490	15,590
Depreciation and amortization	994	5,105
Gain on disposal of assets	0	74
Rent	933	4,321
Total operating expenses	8,153	37,362
Income from operations	92	2,435
Interest income	0	0
Interest expense	(531)	(2,265)
Acquisition and transaction related costs	0	0
Equity in earnings (losses) of unconsolidated entities	(166)	(65)
General and administrative	0	0
Total other income (expenses)	(697)	(2,330)
Net income (loss) before taxes	(605)	105
Provision for income taxes	0	0
Net income (loss) and comprehensive income (loss)	(605)	105
Comprehensive Income (Loss)	$ (605)	$ 105

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Mortgage Notes Payable

12 Months Ended

Dec. 31, 2014

Debt Disclosure [Abstract]

Mortgage Notes Payable

Mortgage Note Payable

The Company’s and the Predecessor's mortgage note payable as of December 31, 2014 and December 31, 2013 consist of the following, respectively (in thousands):

Successor
	Outstanding Mortgage Note Payable
Encumbered Properties	December 31, 2014		Interest Rate	Payment	Maturity
Baltimore Courtyard & Providence Courtyard	$	45,500	4.3%	Interest Only, Principal paid at Maturity	April 2019

Predecessor
	Outstanding Mortgage Note Payable
Encumbered Properties	December 31, 2013		Interest Rate	Payment	Maturity
Baltimore Courtyard & Providence Courtyard	$	41,449	4.55% plus the greater of (i) three-month LIBOR or (ii) a LIBOR floor of 0.50%(1)	Principal and Interest	January 2016

______________________________________________________________________________________________

⁽¹⁾5.05% at December 31, 2013

The Predecessor's mortgage note payable was paid off concurrently with the acquisition of the Barceló Portfolio by the Company. Interest expense related to the mortgage note payable attributable to the Successor for the period from March 21 to December 31, 2014 was $1.6 million. Interest expense attributable to the Predecessor for the period from January 1 to March 20, 2014 and the year ended December 31, 2013 was $0.5 million and $2.1 million, respectively.

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Leases

12 Months Ended

Dec. 31, 2014

Leases [Abstract]

Leases

Leases

In October 2001, the Predecessor, through a wholly owned subsidiary, entered into an operating lease agreement to lease the Georgia Tech Hotel, which opened in August 2003. On March 21, 2014, the Company acquired the Predecessor's interest in the lease. The lease has an initial term of 30 years from the opening date, with a 10-year extension option. The lease requires the Company to pay rent equal to (i) a fixed minimum rent plus (ii) an additional rent based upon a specified percentage of revenues to the extent they exceed a specified threshold. The Company is responsible for paying all of the hotel operating expenses including all personnel costs, impositions, utility charges, insurance premiums, and payments for funding furniture, fixtures and equipment reserves. Rent expense for the Georgia Tech Hotel attributable to the Successor for the period from March 21 to December 31, 2014 was $3.9 million. In connection with the acquisition of the Georgia Tech Hotel lease, the Company has allocated a value to the below-market lease intangible based on the difference between the market rent and the rental commitments. During the year endedDecember 31, 2014, $0.3 million has been amortized to rent expense. Rent expense attributable to the Predecessor for the period from January 1 to March 20, 2014 and the year ended December 31, 2013 was $0.9 million and $4.3 million, respectively.

The future minimum rental commitments for the Georgia Tech Hotel are as follows (in thousands):

	Minimum Rental Commitments		Amortization of Lease Intangible to Rent Expense
Year ended December 31, 2015	$	4,400	$	433
Year ended December 31, 2016	4,400		433
Year ended December 31, 2017	4,400		433
Year ended December 31, 2018	4,400		433
Year ended December 31, 2019	4,400		433
Thereafter	60,133		5,895
Total	$	82,133	$	8,060

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Schedule III - Real Estate and Accumulated Depreciation

12 Months Ended

Dec. 31, 2014

SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Abstract]

Schedule III, Real Estate and Accumulated Depreciation Disclosure

					Initial Cost				Subsequent Costs Capitalized				Gross Amount at December 31, 2014 (1)
Property	U.S. State or Country	Acquisition Date	Debt at December 31, 2014		Land		Building and Improvements		Land		Building and Improvements		Land		Building and Improvements		Total		Accumulated Depreciation (2)
Baltimore Courtyard Inner Harbor Hotel	MD	2014	$	24,980	$	4,960	$	34,343	$	—	$	1	$	4,960	$	34,344	$	39,304	$	(679	)
Courtyard Providence Downtown Hotel	RI	2014	20,520		4,724		29,388		—		1,238		4,724		30,626		35,350		(586		)
Homewood Suites Stratford	CT	2014	—		2,377		13,874		—		2,332		2,377		16,206		18,583		(304		)
Total			$	45,500	$	12,061	$	77,605	$	—	$	3,571	$	12,061	$	81,176	$	93,237	$	(1,569	)

___________________________________

(1) The tax basis of aggregate land, buildings and improvements as of December 31, 2014 is $92.3 million.

(2) Each of the properties has a depreciable life of: 40 years for buildings, 15 years for improvements.

A summary of activity for real estate and accumulated depreciation for the period from March 21 to December 31, 2014⁽¹⁾:

	For the Period from March 21 to December 31, 2014
Land, buildings and improvements, at cost:
Balance at March 21, 2014	$	89,666
Additions-Acquisitions	—
Capital improvements	3,571
Balance at December 31, 2014	$	93,237
Accumulated depreciation and amortization:
Balance at March 21, 2014	$	—
Depreciation expense	(1,569		)
Balance at December 31, 2014	$	(1,569	)

___________________________________

(1) The change in the real estate investments for the Predecessor has not been presented because the land, building and improvements were recorded by the Predecessor at the pre-acquisition basis.

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Economic Dependency

12 Months Ended

Dec. 31, 2014

Economic Dependency [Abstract]

Economic Dependency

Economic Dependency

Under various agreements, the Company has engaged or will engage the Advisor and its affiliates to provide certain services that are essential to the Company, including asset management services, supervision of the management, asset acquisition and disposition decisions, the sale of shares of common stock available for issue, transfer agency services, as well as other administrative responsibilities for the Company including accounting services and investor relations.

As a result of these relationships, the Company is dependent upon the Advisor and its affiliates. In the event that these companies are unable to provide the Company with the respective services, the Company will be required to find alternative providers of these services.

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Common Stock

12 Months Ended

Dec. 31, 2014

Equity [Abstract]

Common Stock

Common Stock

The Company had 10,163,206 shares and 8,888 shares of common stock outstanding and had received total proceeds of $252.9 million and $0.2 million as of December 31, 2014 and December 31, 2013, respectively.

On February 3, 2014, the Company's board of directors declared distributions payable to stockholders of record each day during the applicable month at a rate equal to $0.0000465753 per day, or $1.70 per annum, per share of common stock. The first distribution was paid in May 2014 to holders of record in April 2014. The distributions are payable by the fifth day following each month end to stockholders of record at the close of business each day during the prior month.

Share Repurchase Program

The Company has a Share Repurchase Program (the "SRP") that enables stockholders to sell their shares of common stock originally purchased from the Company to the Company. Under the SRP, stockholders may request that the Company redeem all or any portion, subject to certain minimum conditions described below, if such repurchase does not impair the Company’s capital or operations.

Except in connection with a stockholder’s death, disability, bankruptcy or other involuntary exigent circumstance, prior to the time that the shares of common stock are listed on a national securities exchange and until the Company begins to calculate its NAV, the repurchase price per share will depend on the length of time investors have held such shares as follows: after one year from the purchase date — the lower of $23.13 or 92.5% of the amount they actually paid for each share; after two years from the purchase date — the lower of $23.75 or 95.0% of the amount they actually paid for each share; after three years from the purchase date —  the lower of $24.38 or 97.5% of the amount they actually paid for each share; and after four years from the purchase date — the lower of $25.00 or 100.0% of the amount they actually paid for each share (in each case, as adjusted for any stock distributions, combinations, splits and recapitalizations).

Once the Company begins to calculate its NAV, the price per share that the Company will pay to repurchase the Company’s shares of common stock on the last day of each quarter, will be the Company’s per share NAV of common stock for the quarter, calculated after the close of business on each day the Company makes its quarterly financial filing. Subject to limited exceptions, stockholders whose shares of common stock are repurchased within the first four months from the date of purchase will be subject to a short-term trading fee of 2.0% of the aggregate per share NAV of the shares of common stock repurchased.

The board of directors may reject a request for repurchase, at any time. Purchases under the SRP by the Company will be limited in any calendar year to 5.0% of the weighted average number of shares outstanding during the prior calendar year. In addition, funds available for the Company's SRP are limited and may not be sufficient to accommodate all requests. Due to these limitations, we cannot guarantee that we will be able to accommodate all repurchase requests.

When a stockholder requests a repurchase and the repurchase is approved, the Company will reclassify such obligation from equity to a liability based on the settlement value of the obligation. Shares purchased under the SRP will have the status of authorized but unissued shares. As of December 31, 2014 and December 31, 2013, no shares had been repurchased or requested to be repurchased.

Distribution Reinvestment Plan

Pursuant to the DRIP, stockholders may elect to reinvest distributions by purchasing shares of common stock in lieu of receiving cash. No dealer manager fees or selling commissions are paid with respect to shares purchased pursuant to the DRIP. Participants purchasing shares pursuant to the DRIP have the same rights and are treated in the same manner as if such shares were issued pursuant to the primary Offering. The board of directors may designate that certain cash or other distributions be excluded from the DRIP. The Company has the right to amend or suspend any aspect of the DRIP or terminate the DRIP with ten days’ notice to participants. Shares issued under the DRIP are recorded to equity in the accompanying balance sheets in the period distributions are paid. There were 63,998 shares issued under the DRIP as of December 31, 2014. No shares were issued under the DRIP as of December 31, 2013.

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Income Taxes - Narrative (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Income Tax Disclosure [Abstract]
Net deferred tax assets	$ 133	$ 0

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Promissory Notes Payable

12 Months Ended

Dec. 31, 2014

Debt Disclosure [Abstract]

Promissory Notes Payable

Promissory Notes Payable

The Company’s promissory notes payable as of December 31, 2014 are as follows (in thousands):

	Outstanding Promissory Notes Payable
Use of Proceeds	December 31, 2014		Interest Rate		Payment	Maturity
Barceló acquisition	$	63,074	6.8	%	Interest Only	See below
Property improvement plan	1,775		4.5	%	Interest Only	March 2019
Grace Acquisition deposit	—		6.0	%	Interest Only	May 2015

______________________________________________________________________________________________

The promissory notes payable for the Barceló acquisition originally consisted of the Portfolio Owned Assets and Joint Venture Assets promissory notes which had a maturity date of within ten business days upon the Company raising equal to or greater than $150.0 million in common equity from the Offering. During the year ended December 31, 2014, the Company entered into an amendment to the Portfolio Owned Assets and Joint Venture Assets promissory notes whereby the promissory notes were combined into one note (the "Barceló Promissory Note") with an outstanding principal amount of $63.1 million. The Barceló Promissory Note has a maturity date of within ten business days after the Company raises $70.0 million in common equity from the Offering after the closing of the Grace Acquisition and payment of all acquisition related expenses (including

payments to the Advisor and its affiliates). There are no principal payments under the Barceló Promissory Note payable for 2015 and 2016, unless the contingent payment feature above is satisfied by raising equal to or greater than $70.0 million in common equity from the Offering after the closing of the Grace Acquisition and payment of all acquisition related expenses

(including payments to the Advisor and its affiliates).

The Barceló Promissory Note is payable to BCC and the property improvement plan promissory note is payable to the Sub-Property Manager.

In connection with entering into the Grace Acquisition, the Company paid a $50.0 million customary earnest money deposit on May 27, 2014 which was partially funded by a $40.5 million draw on a $45.0 million promissory note with CARP, LLC, an entity under common control with the Sponsor (the "Affiliate Promissory Note"), which had a maturity date of May 27, 2015. As of December 31, 2014, the Affiliate Promissory Note had been repaid in full.

Interest expense related to promissory notes payable attributable to the Company for the period from March 21 to December 31, 2014 was $3.6 million. No interest expense related to promissory notes payable was incurred by the Predecessor for the year ended December 31, 2013 as the Predecessor did not have any promissory notes.

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Accounts Payable and Accrued Expenses

12 Months Ended

Dec. 31, 2014

Payables and Accruals [Abstract]

Accounts Payable and Accrued Expenses

Accounts Payable and Accrued Expenses

The following is a summary of the components of accounts payable and accrued expenses (in thousands):

	Successor		Predecessor
	December 31, 2014		December 31, 2013
Trade accounts payable and accrued expenses	$	7,412	$	2,745
Contingent consideration from Barceló Acquisition (see Note 11)	2,384		—
Deferred payment for Barceló Acquisition (see Note 11)	3,471		—
Accrued salaries and related liabilities	952		819
Georgia Tech Hotel lease obligation	—		1,733
Total	$	14,219	$	5,297

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Fair Value Measurements

12 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

In accordance with ASC 820, certain assets and liabilities are recorded at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability between market participants in an orderly transaction on the measurement date. The market in which the reporting entity would sell the asset or transfer the liability with the greatest volume and level of activity for the asset or liability is known as the principal market. When no principal market exists, the most advantageous market is used. This is the market in which the reporting entity would sell the asset or transfer the liability with the price that maximizes the amount that would be received or minimizes the amount that would be paid. Fair value is based on assumptions market participants would make in pricing the asset or liability. Generally, fair value is based on observable quoted market prices or derived from observable market data when such market prices or data are available. When such prices or inputs are not available, the reporting entity should use valuation models.

The Company’s financial instruments recorded at fair value on a recurring basis are categorized based on the priority of the inputs used to measure fair value. The inputs used in measuring fair value are categorized into three levels, as follows:

• Level 1 - Inputs that are based upon quoted prices for identical instruments traded in active markets.

• Level 2 - Inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar investments in markets that are not active, or models based on valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the investment.

• Level 3 - Inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety.

The Company is required to disclose the fair value of financial instruments which it is practicable to estimate. The fair value of cash and cash equivalents, accounts receivable and accounts payable and accrued expenses approximate their carrying amounts due to the relatively short maturity of these items. The following table shows the carrying values and the fair values of material non-current liabilities that qualify as financial instruments, determined in accordance with the authoritative guidance for disclosures about fair value of financial instruments (in thousands):

	Successor				Predecessor
	December 31, 2014				December 31, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Mortgage note payable	$	45,500	$	44,582	$	41,449	$	38,921
Promissory notes payable	64,849		64,849		—		—
Contingent consideration on acquisition	2,384		2,384		—		—
Deferred consideration	3,471		3,471		—		—
Total	$	116,204	$	115,286	$	41,449	$	38,921

The fair value of the mortgage note payable was determined using the discounted cash flow method and applying current market rates and is classified as level 3 under the fair value hierarchy. The fair values of the promissory notes payable were determined to equal their carrying amounts as these amounts are expected to be repaid within a year. The fair value of the contingent consideration on acquisition and deferred consideration was determined to equal their carrying amounts using level 3 inputs, as these amounts are accreted using current market rates.

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Quarterly Results (Unaudited) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended	9 Months Ended	3 Months Ended				5 Months Ended	0 Months Ended	3 Months Ended
	Mar. 20, 2014	Dec. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2013	Mar. 31, 2014	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014
Net income (loss) attributable to stockholders	$ (605)	$ (14,841)
Predecessor
Total revenues	8,245		9,620	10,413	10,988	8,776	39,797
Net income (loss) attributable to stockholders	(605)		(370)	468	978	(971)	105
Successor
Total revenues		34,871						1,320	10,704	11,387	11,460
Net income (loss) attributable to stockholders		$ (14,841)						$ (5,282)	$ (5,928)	$ (3,549)	$ (82)
Basic and diluted weighted average common shares outstanding		2,826,352						68,622	7,959,303	2,792,350	398,796
Basic and diluted net loss per share (in dollars per share)		$ (5.25)						$ (76.97)	$ (0.74)	$ (1.27)	$ (0.21)

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Subsequent Events - Schedule of Common Stock Offerings (Details) (USD $) In Thousands, unless otherwise specified	5 Months Ended	12 Months Ended	0 Months Ended	3 Months Ended
	Dec. 31, 2013	Dec. 31, 2014	Mar. 15, 2015	Mar. 15, 2015
Subsequent Event [Line Items]
Proceeds from issuance of common stock, net	$ 200	$ 252,854
Subsequent event
Subsequent Event [Line Items]
Proceeds from issuance of common stock, net			$ 375,087	$ 122,233

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Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Deferred tax asset:
Employee-related compensation	$ 152	$ 0
Other	11	0
Total deferred tax assets	163	0
Deferred tax liability
Investments in unconsolidated joint ventures	(30)	0
Total deferred tax liability	30	0
Net deferred tax asset	$ 133	$ 0

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

The components of income tax expense for the year ended December 31, 2014 are presented in the following table, in thousands. There was no income tax expense for the year ended December 31, 2013.

	Year Ended December 31,
	2014			2013
Current:
Federal	$	633		$	—
State	91			—
	724			—
Deferred:
Federal	(116		)	—
State	(17		)	—
	(133		)	—
Income tax expense	$	591		$	—

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of the statutory federal income tax benefit of the Company's income tax expense is presented in the following table, in thousands. There was no income tax expense for the year ended December 31, 2013.

	Year Ended December 31,
	2014			2013
Statutory federal income tax benefit	$	(4,845	)	$	—
Effect of non-taxable REIT loss	5,361			—
State income tax expense, net of federal tax benefit	73			—
Other	2			—
Income tax expense	$	591		$	—

Schedule of Deferred Tax Assets and Liabilities

The tax effect of each type of temporary difference and carryforward, that gives rise to the deferred tax assets and liabilities as of December 31, 2014 are presented in the following table, in thousands. There were no temporary differences or carryforwards for the year ended December 31, 2013.

	Year Ended December 31,
	2014			2013
Deferred tax asset:
Employee-related compensation	$	152		$	—
Other	11			—
	163			—
Deferred tax liability
Investments in unconsolidated joint ventures	(30		)	—
Total deferred tax liability	(30		)	—
Net deferred tax asset	$	133		$	—

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Promissory Notes Payable - Narrative (Details) (USD $)	9 Months Ended	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2014
Debt Instrument [Line Items]
Minimum equity raised from offering for contingent consideration	$ 70,000,000	$ 70,000,000
The grace acquisition
Debt Instrument [Line Items]
Earnest money deposit	50,000,000	50,000,000
Successor
Debt Instrument [Line Items]
Promissory notes payable	64,849,000	64,849,000
Repayment of affiliate note payable used to fund acquisition deposit	40,500,000	40,500,000
Interest expense	1,600,000
Promissory notes payable
Debt Instrument [Line Items]
Minimum common equity raised requirement for ten day maturity of notes	150,000,000	150,000,000
Interest expense	3,600,000
Promissory notes payable | The grace acquisition
Debt Instrument [Line Items]
Earnest money deposit	45,000,000	45,000,000
Promissory notes payable | Successor | Barceló acquisition
Debt Instrument [Line Items]
Promissory notes payable	$ 63,074,000	$ 63,074,000

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Quarterly Results (Unaudited)

12 Months Ended

Dec. 31, 2014

Quarterly Financial Information Disclosure [Abstract]

Quarterly Results (Unaudited)

Quarterly Results (Unaudited)

Presented below is a summary of the unaudited quarterly financial information for the years ended December 31, 2014 2013:

	Quarters Ended
	Predecessor			Successor
(In thousands, except for share amounts)	Period from January 1 to March 20, 2014			Period from March 21 to March 31, 2014			June 30, 2014			September 30, 2014			December 31, 2014
Total revenues	$	8,245		$	1,320		$	11,460		$	11,387		$	10,704
Net loss attributable to stockholders	$	(605	)	$	(5,282	)	$	(82	)	$	(3,549	)	$	(5,928	)
Basic and diluted weighted average common shares outstanding	NA			68,622			398,796			2,792,350			7,959,303
Basic and diluted net loss per share attributable to stockholders	NA			$	(76.97	)	$	(0.21	)	$	(1.27	)	$	(0.74	)

	Quarters Ended
	Predecessor
(In thousands, except for share amounts)	March 31, 2013			June 30, 2013		September 30, 2013		December 31, 2013
Total revenues	$	8,776		$	10,988	$	10,413	$	9,620
Net income (loss) attributable to stockholders	$	(971	)	$	978	$	468	$	(370	)
Basic and diluted weighted average common shares outstanding	NA			NA		NA		NA
Basic and diluted net loss per share attributable to stockholders	NA			NA		NA		NA

___________________________________________________

NA - not applicable

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Real Estate Investments (Tables)

12 Months Ended

Dec. 31, 2014

Business Combinations [Abstract]

Schedule of Business Acquisitions

The following table presents the allocation of the assets acquired and liabilities assumed by the Company as of March 21, 2014 (in thousands):

	Successor
Assets acquired and liabilities assumed	As of March 21, 2014
Land	$	12,061
Buildings and improvements	77,605
Below-market lease obligation	8,400
Furniture, fixtures and equipment	5,220
Restricted cash	619
Investment in unconsolidated entities	5,380
Prepaid expenses and other assets	2,314
Accounts payable and accrued expenses	(1,469		)
Total operating assets acquired, net	110,130
Contingent consideration on acquisition	(2,268		)
Seller financing of real estate investments	(58,074		)
Seller financing of investment in unconsolidated entities	(5,000		)
Deferred consideration	(3,400		)
Total assets acquired, net	$	41,388

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Mortgage Notes Payable - Schedule of Long-term Debt Instruments (Details) (USD $) In Thousands, unless otherwise specified	5 Months Ended
	Dec. 31, 2013	Dec. 31, 2014
Successor
Debt Instrument [Line Items]
Mortgage note payable		$ 45,500
Successor | Mortgage note payable
Debt Instrument [Line Items]
Mortgage note payable		45,500
Interest Rate (percent)		4.30%
Predecessor
Debt Instrument [Line Items]
Mortgage note payable	41,449
Predecessor | Mortgage note payable
Debt Instrument [Line Items]
Mortgage note payable	$ 41,449
Basis spread on variable rate	4.55%
Predecessor | Mortgage note payable | London interbank offered rate (LIBOR)
Debt Instrument [Line Items]
LIBOR floor	0.50%

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Business Combination - Narrative (Details) (USD $)	0 Months Ended
	Mar. 21, 2014	Dec. 31, 2014
Business Acquisition [Line Items]
Closing costs payable in 2015		$ 3,000,000
Closing costs payable in 2016		500,000
Minimum equity raised from offering for contingent consideration		70,000,000
Successor
Business Acquisition [Line Items]
Assets acquired	110,130,000
Contingent consideration on acquisition	2,268,000
Deferred consideration acquired	$ 3,400,000

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CONSOLIDATED/COMBINED STATEMENT OF CHANGES IN EQUITY (USD $)	Total	Common stock	Additional Paid-in Capital	Deficit	Total Stockholders' Equity	Members' Equity
Beginning balance at Jul. 24, 2013
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued through Distribution Reinvestment Plan (in shares)		0
Ending balance at Dec. 31, 2013	$ 88,690,000	$ 0	$ 200,000	$ (6,000)	$ 194,000	$ 88,496,000
Ending balance (in shares) at Dec. 31, 2013		8,888
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock (in shares)		105,609
Issuance of common stock	2,418,000	1,000	2,417,000		2,418,000
Net loss attributable to stockholders	(605,000)					(605,000)
Distributions	(800,000)					(800,000)
Common stock offering costs, commissions and dealer manager fees	(1,529,000)		(1,529,000)		(1,529,000)
Ending balance at Mar. 20, 2014	88,174,000	1,000	1,088,000		1,083,000	87,091,000
Ending balance (in shares) at Mar. 20, 2014		114,497
Beginning balance at Dec. 31, 2013		0		(6,000)
Beginning balance (in shares) at Dec. 31, 2013		8,888
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued through Distribution Reinvestment Plan (in shares)		63,998
Ending balance at Dec. 31, 2014		102,000
Ending balance (in shares) at Dec. 31, 2014		10,163,206
Beginning balance at Mar. 20, 2014	88,174,000	1,000	1,088,000	(6,000)	1,083,000	87,091,000
Beginning balance (in shares) at Mar. 20, 2014		114,497
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Proceeds received from Successor for the assets of Predecessor	(87,091,000)					(87,091,000)
Issuance of common stock (in shares)		9,984,711
Issuance of common stock	248,715,000	100,000	248,615,000		248,715,000
Net loss attributable to stockholders	(14,841,000)			(14,841,000)	(14,841,000)
Distributions	(4,839,000)			(4,839,000)	(4,839,000)
Common stock issued through Distribution Reinvestment Plan (in shares)		63,998
Common stock issued through Distribution Reinvestment Plan	1,521,000	1,000	1,520,000		1,521,000
Share-based payments	22,000		22,000		22,000
Common stock offering costs, commissions and dealer manager fees	(29,866,000)		(29,866,000)		(29,866,000)
Ending balance at Dec. 31, 2014	$ 201,795,000	$ 102,000	$ 221,379,000	$ (19,686,000)	$ 201,795,000	$ 0
Ending balance (in shares) at Dec. 31, 2014	10,163,206	10,163,206

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Variable Interest Entities and Investments in Unconsolidated Entities

12 Months Ended

Dec. 31, 2014

Variable Interest Entities and Investments in Unconsolidated Affiliates [Abstract]

Variable Interest Entities and Investments in Unconsolidated Entities

Variable Interest Entities and Investments in Unconsolidated Entities

The Company's accompanying consolidated/combined financial statements and the Predecessor's combined financial statements include investments in (i) an entity that owns the Westin Virginia Beach and (ii) an entity that owns the Hilton Garden Inn Blacksburg.

The Company as of December 31, 2014 and the Predecessor as of December 31, 2013 have a 24.00% non-controlling interest (but with certain veto and approval rights) in BSE/AH Blacksburg Hotel, LLC (the "HGI Blacksburg JV"), an entity that owns the assets of the Hilton Garden Inn Blacksburg. The HGI Blacksburg JV has a loan with an original principal balance of $13.0 million (the "Blacksburg Loan"). In addition, BCC is a party to the First Amended and Restated Guaranty of Payment dated April 17, 2011 (the "Blacksburg Payment Guaranty") in connection with the Blacksburg Loan, which is partially supported by a Construction Loan Indemnity from the other partners in the HGI Blacksburg JV dated March 10, 2008 (the "Blacksburg Cross Indemnity"). In connection with the acquisition of its non-controlling interest in the HGI Blacksburg JV, on March 21, 2014, the Company entered into an Indemnity Agreement (the "BCC Indemnity") pursuant to which the Company agreed to indemnify BCC against liabilities arising under the Blacksburg Payment Guaranty and/or the Blacksburg Cross Indemnity. The outstanding balance of the Blacksburg Loan was $10.1 million and $10.7 million as of December 31, 2014 and December 31, 2013, respectively.

Under the Blacksburg Payment Guaranty, BCC is jointly liable to the lender, along with four other parties, for payment of any Blacksburg Loan deficiencies. The Blacksburg Payment Guaranty remains in effect until the Blacksburg Loan is repaid. Under the Blacksburg Cross Indemnity, each of the joint venture owners of the hotel agrees to be responsible for its pro rata share of any liabilities under the Blacksburg Payment Guaranty, and to be 100% responsible for any liabilities caused by it. Thus, so long as each of the other parties to the Blacksburg Cross Indemnity remains solvent, the Company, through the BCC Indemnity, should never be liable for anything more than the Company’s pro rata share of losses, or 100% of the losses the Company caused.

The Company as of December 31, 2014 and the Predecessor as of December 31, 2013 have a 30.53% non-controlling interest (but with certain veto and approval rights) in TCA Block 7 Hotel, LLC (the "Westin Virginia Beach JV"), an entity that owns the assets of the Westin Virginia Beach. On April 8, 2014, a loan in connection with the hotel was refinanced and Notes A and B of that loan were paid off. Upon payment in full of Notes A and B, Note C for $7.0 million and related accrued interest of $0.5 million were forgiven. On April 8, 2014, Westin Virginia Beach JV entered into a $20.7 million loan (the "Westin Virginia Beach Loan") with an unaffiliated lender. In addition, the Company is a party to a Guaranty of Recourse Obligations dated April 8, 2014 (the "Westin Virginia Beach Non-Recourse Carve-out Guaranty") in connection with the Westin Virginia Beach Loan, which is partially supported by a permanent loan cross indemnity from the other partners in the Westin Virginia Beach JV dated April 1, 2014 (the "Westin Virginia Beach Cross Indemnity"). The outstanding balance of the prior loans was $26.6 million as of December 31, 2013, and the outstanding balance of the Westin Virginia Beach Loan was $20.5 million as of December 31, 2014.

Under the Westin Virginia Beach Non-Recourse Carve-out Guaranty, the Company, along with two other parties, would be liable to the lender for repayment for part or all of the loan upon occurrence of events triggering non-recourse carve-out liability. Pursuant to the Westin Virginia Beach Cross Indemnity, each of the joint venture partners is obligated to pay its pro rata share of any losses incurred by the parties to the Westin Virginia Beach Non-Recourse Carve-out Guaranty, except to the extent that any such loss is caused by one of those parties, in which case that party is responsible for 100% of the losses. Therefore, so long as each of the other parties remains solvent, the Company should never be liable for anything more than its pro rata share of losses, or 100% of the losses it caused. The Westin Virginia Beach Non-Recourse Carve-out Guaranty remains in place until the Westin Virginia Beach Loan is repaid.

The Company considers these entities to be VIEs. The Company has concluded it is not the primary beneficiary with the power to direct activities that most significantly impact economic performance of the entities, and accordingly, has not consolidated the entities. The Company has accounted for the entities under the equity method of accounting and included them in investments in unconsolidated entities in the accompanying consolidated/combined balance sheets.

The Company’s and Predecessor's investments in unconsolidated entities as of December 31, 2014 and December 31, 2013, respectively, consist of the following (in thousands):

			Investment in Partnership
			Successor		Predecessor		Successor		Predecessor
Partnership	Ownership Interest		December 31, 2014		December 31, 2013		For the Period from March 21 to December 31, 2014		For the Period from January 1 to March 20, 2014			Year Ended December 31, 2013
HGI Blacksburg JV	24.00	%	$	1,631	$	893	$	110	$	(35	)	$	79
Westin Virginia Beach JV	30.53	%	3,844		3,488		242		(131		)	(144		)
Total			$	5,475	$	4,381	$	352	$	(166	)	$	(65	)

The Company received a capital distribution of $0.24 million from the Westin Virginia Beach JV for the year ended December 31, 2014. No distributions were recorded during the year ended December 31, 2013.

During the period from March 21 to December 31, 2014, the Company received a capital distribution of $0.01 million from the HGI Blacksburg JV. No distributions were recorded during the year ended December 31, 2013.

The maximum exposure to loss as a result of the Company’s and Predecessor's investments in unconsolidated entities as of December 31, 2014 and December 31, 2013, respectively, is as follows (in thousands)⁽¹⁾:

	Partnership Loan Balance				Investment in Partnership				Partnership Maximum Exposure to Loss
	Successor		Predecessor		Successor		Predecessor		Successor		Predecessor
Partnership	December 31, 2014		December 31, 2013		December 31, 2014		December 31, 2013		December 31, 2014		December 31, 2013
HGI Blacksburg JV	$	10,063	$	10,663	$	1,631	$	893	$	11,694	$	11,556
Westin Virginia Beach JV	20,540		26,576		3,844		3,488		24,384		30,064
Total	$	30,603	$	37,239	$	5,475	$	4,381	$	36,078	$	41,620

______________________________________________________________________________________________

⁽¹⁾ Represents the Company's maximum exposure to loss at each unconsolidated entity should the loss be caused by the Company. As a result of the Blacksburg Payment Guaranty, the Blacksburg Cross Indemnity, the Westin Virginia Beach Non-Recourse Carve-out Guaranty and the Westin Virginia Beach Cross Indemnity, the Company and Predecessor have a maximum exposure to loss of the outstanding loan balance at the entity as well as their investment in the entity.

Below is the summarized financial information for the HGI Blacksburg JV as of December 31, 2014 and December 31, 2013 and for the period from January 1 to March 20, 2014, for the period from March 21 to December 31, 2014 and for the year ended December 31, 2013 (in thousands):

	Successor		Predecessor
(in thousands)	December 31, 2014		December 31, 2013
Total Assets	$	14,659	$	14,835
Total Liabilities	10,482		11,113

	Successor			Predecessor
	For the Period from March 21 to December 31, 2014			For the period from January 1 to March 20, 2014			Year Ended December 31, 2013
Hotel revenue	$	3,981		$	687		$	4,440
Operating income (loss)	887			(47		)	794
Interest expense	(340		)	(97		)	(465		)
Net income (loss)	$	547		$	(144	)	$	329
Company's share of net income (loss)	132			(35		)	79
Additional amortization expense (1)	(22		)	—			—
Company's share of net income (loss)	$	110		$	(35	)	$	79

____________________________________________________________________________

⁽¹⁾ Amortization of the purchase price of the Company’s original interest in the HGI Blacksburg JV, less the Company's share of the JV's deficit, which resulted in a basis difference of $0.6 million.

Below is the summarized financial information for the Westin Virginia Beach JV as of December 31, 2014 and December 31, 2013 and for the period from January 1 to March 20, 2014, for the period from March 21 to December 31, 2014 and for the year ended December 31, 2013 (in thousands):

	Successor		Predecessor
(in thousands)	December 31, 2014		December 31, 2013
Total Assets	$	30,816	$	31,035
Total Liabilities	22,168		28,991

	Successor			Predecessor
	For the Period from March 21 to December 31, 2014			For the Period from January 1 to March 20, 2014			Year Ended December 31, 2013
Hotel revenue	$	10,146		$	2,070		$	11,232
Operating income (loss)	2,150			(67		)	1,228
Interest income	—			—			2
Interest expense	(994		)	(304		)	(1,429		)
Forgiveness of debt	7,522			—			—
Net income (loss)	$	8,678		$	(371	)	$	(199	)
Company's share of net income (loss)	2,650			(113		)	(61		)
Additional amortization expense (1)	(111		)	(18		)	(83		)
Unrecognized gain by JV (2)	(2,297		)	—			—
Company's share of net income (loss)	$	242		$	(131	)	$	(144	)

_________________________________________________________________________

⁽¹⁾ Amortization of the purchase price of the Predecessor’s original interest in the Westin Virginia Beach JV, less the Predecessor’s share of the partnership’s deficit, which resulted in a basis difference of $3.4 million and the Company’s original interest in the Westin Virginia Beach JV, less the Company's share of the JV's deficit, which resulted in a basis difference of $3.6 million.

⁽²⁾ Represents gain recorded by the JV for the forgiveness of debt which is not recognized by the Company.

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Related Party Transactions and Arrangements - Fees Paid in Connection with the Offering (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended		5 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2013
Dealer manager
Related Party Transaction [Line Items]
Fees incurred with the offering	$ 5,730	$ 0
Due to affiliates	4,645	0	0
Commissions and Brokerage Fees | Dealer manager
Related Party Transaction [Line Items]
Fees incurred with the offering	24,099		0
Due to affiliates	153	0	0
Compensation and Reimbursement for Services | Advisor and Affiliates
Related Party Transaction [Line Items]
Fees incurred with the offering	3,915		644
Due to affiliates	1,885	644	644
Offering Costs [Member] | Hotel Leases
Related Party Transaction [Line Items]
Fees incurred with the offering	60		0
Due to affiliates	$ 60	$ 0	$ 0

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Variable Interest Entities and Investments in Unconsolidated Entities (Tables)

12 Months Ended

Dec. 31, 2014

Variable Interest Entities and Investments in Unconsolidated Affiliates [Abstract]

Schedule of Variable Interest Entities

The maximum exposure to loss as a result of the Company’s and Predecessor's investments in unconsolidated entities as of December 31, 2014 and December 31, 2013, respectively, is as follows (in thousands)⁽¹⁾:

	Partnership Loan Balance				Investment in Partnership				Partnership Maximum Exposure to Loss
	Successor		Predecessor		Successor		Predecessor		Successor		Predecessor
Partnership	December 31, 2014		December 31, 2013		December 31, 2014		December 31, 2013		December 31, 2014		December 31, 2013
HGI Blacksburg JV	$	10,063	$	10,663	$	1,631	$	893	$	11,694	$	11,556
Westin Virginia Beach JV	20,540		26,576		3,844		3,488		24,384		30,064
Total	$	30,603	$	37,239	$	5,475	$	4,381	$	36,078	$	41,620

______________________________________________________________________________________________

⁽¹⁾ Represents the Company's maximum exposure to loss at each unconsolidated entity should the loss be caused by the Company. As a result of the Blacksburg Payment Guaranty, the Blacksburg Cross Indemnity, the Westin Virginia Beach Non-Recourse Carve-out Guaranty and the Westin Virginia Beach Cross Indemnity, the Company and Predecessor have a maximum exposure to loss of the outstanding loan balance at the entity as well as their investment in the entity.

The Company’s and Predecessor's investments in unconsolidated entities as of December 31, 2014 and December 31, 2013, respectively, consist of the following (in thousands):

			Investment in Partnership
			Successor		Predecessor		Successor		Predecessor
Partnership	Ownership Interest		December 31, 2014		December 31, 2013		For the Period from March 21 to December 31, 2014		For the Period from January 1 to March 20, 2014			Year Ended December 31, 2013
HGI Blacksburg JV	24.00	%	$	1,631	$	893	$	110	$	(35	)	$	79
Westin Virginia Beach JV	30.53	%	3,844		3,488		242		(131		)	(144		)
Total			$	5,475	$	4,381	$	352	$	(166	)	$	(65	)

Below is the summarized financial information for the HGI Blacksburg JV as of December 31, 2014 and December 31, 2013 and for the period from January 1 to March 20, 2014, for the period from March 21 to December 31, 2014 and for the year ended December 31, 2013 (in thousands):

	Successor		Predecessor
(in thousands)	December 31, 2014		December 31, 2013
Total Assets	$	14,659	$	14,835
Total Liabilities	10,482		11,113

	Successor			Predecessor
	For the Period from March 21 to December 31, 2014			For the period from January 1 to March 20, 2014			Year Ended December 31, 2013
Hotel revenue	$	3,981		$	687		$	4,440
Operating income (loss)	887			(47		)	794
Interest expense	(340		)	(97		)	(465		)
Net income (loss)	$	547		$	(144	)	$	329
Company's share of net income (loss)	132			(35		)	79
Additional amortization expense (1)	(22		)	—			—
Company's share of net income (loss)	$	110		$	(35	)	$	79

____________________________________________________________________________

⁽¹⁾ Amortization of the purchase price of the Company’s original interest in the HGI Blacksburg JV, less the Company's share of the JV's deficit, which resulted in a basis difference of $0.6 million.

Below is the summarized financial information for the Westin Virginia Beach JV as of December 31, 2014 and December 31, 2013 and for the period from January 1 to March 20, 2014, for the period from March 21 to December 31, 2014 and for the year ended December 31, 2013 (in thousands):

	Successor		Predecessor
(in thousands)	December 31, 2014		December 31, 2013
Total Assets	$	30,816	$	31,035
Total Liabilities	22,168		28,991

	Successor			Predecessor
	For the Period from March 21 to December 31, 2014			For the Period from January 1 to March 20, 2014			Year Ended December 31, 2013
Hotel revenue	$	10,146		$	2,070		$	11,232
Operating income (loss)	2,150			(67		)	1,228
Interest income	—			—			2
Interest expense	(994		)	(304		)	(1,429		)
Forgiveness of debt	7,522			—			—
Net income (loss)	$	8,678		$	(371	)	$	(199	)
Company's share of net income (loss)	2,650			(113		)	(61		)
Additional amortization expense (1)	(111		)	(18		)	(83		)
Unrecognized gain by JV (2)	(2,297		)	—			—
Company's share of net income (loss)	$	242		$	(131	)	$	(144	)

_________________________________________________________________________

⁽¹⁾ Amortization of the purchase price of the Predecessor’s original interest in the Westin Virginia Beach JV, less the Predecessor’s share of the partnership’s deficit, which resulted in a basis difference of $3.4 million and the Company’s original interest in the Westin Virginia Beach JV, less the Company's share of the JV's deficit, which resulted in a basis difference of $3.6 million.

⁽²⁾ Represents gain recorded by the JV for the forgiveness of debt which is not recognized by the Company.

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Summary of Significant Accounting Policies - Narrative (Details) (USD $)	0 Months Ended	12 Months Ended		9 Months Ended
	Feb. 03, 2014	Dec. 31, 2014 segment	Dec. 31, 2013	Dec. 31, 2014
Summary of Significant Accounting Policies [Line Items]
Subscriptions required to break escrow	$ 2,000,000
Advertising expense		400,000	400,000
Number of reportable segments		1
Sales Revenue, Net
Summary of Significant Accounting Policies [Line Items]
Percentage of total consolidated/ combined revenues		100.00%
Predecessor | Barcelo Crestline Corp.
Summary of Significant Accounting Policies [Line Items]
Total expenses				$ 200,000
Building
Summary of Significant Accounting Policies [Line Items]
Useful life		40 years
Land improvements
Summary of Significant Accounting Policies [Line Items]
Useful life		15 years
Furniture and fixtures
Summary of Significant Accounting Policies [Line Items]
Useful life		5 years
Minimum
Summary of Significant Accounting Policies [Line Items]
Period after which receivables are due		30 days
Maximum
Summary of Significant Accounting Policies [Line Items]
Period after which receivables are due		90 days

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Income Taxes

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

We intend to elect and qualify to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with our tax year ended December 31, 2014. In order to qualify as a REIT, we must annually distribute to our stockholders 90% of our REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding net capital gain, and must comply with various other organizational and operational requirements. Distributions to stockholders for the tax year ended December 31, 2014 were all deemed to be return of capital.

The components of income tax expense for the year ended December 31, 2014 are presented in the following table, in thousands. There was no income tax expense for the year ended December 31, 2013.

	Year Ended December 31,
	2014			2013
Current:
Federal	$	633		$	—
State	91			—
	724			—
Deferred:
Federal	(116		)	—
State	(17		)	—
	(133		)	—
Income tax expense	$	591		$	—

A reconciliation of the statutory federal income tax benefit of the Company's income tax expense is presented in the following table, in thousands. There was no income tax expense for the year ended December 31, 2013.

	Year Ended December 31,
	2014			2013
Statutory federal income tax benefit	$	(4,845	)	$	—
Effect of non-taxable REIT loss	5,361			—
State income tax expense, net of federal tax benefit	73			—
Other	2			—
Income tax expense	$	591		$	—

The tax effect of each type of temporary difference and carryforward, that gives rise to the deferred tax assets and liabilities as of December 31, 2014 are presented in the following table, in thousands. There were no temporary differences or carryforwards for the year ended December 31, 2013.

	Year Ended December 31,
	2014			2013
Deferred tax asset:
Employee-related compensation	$	152		$	—
Other	11			—
	163			—
Deferred tax liability
Investments in unconsolidated joint ventures	(30		)	—
Total deferred tax liability	(30		)	—
Net deferred tax asset	$	133		$	—

As of December 31, 2014, the Company had a net deferred tax asset of $0.1 million. The Company believes that it is more likely than not that the TRS will generate sufficient taxable income to realize in full this deferred tax asset. Accordingly, no valuation allowance has been recorded as of December 31, 2014.

As of December 31, 2014, the tax years that remain subject to examination by major tax jurisdictions include 2013 and 2014.