Hotel owners both large and small propose the following lending standards during the COVID-19 crisis and its aftermath:

1. No Additional Costs on Borrower - no default interest rate, no special servicer or related fees, no extension fees, lawyer costs to document of $1,000 per $10M loan balance, no late charges, no rate lock or interest rate cap required.

2. No defaults or recourse triggered by the following events:

   1. Non payment of debt service

   2. Trade payables aging

   3. Temporary hotel closing

   4. Taking on or repaying gov’t sponsored lending aid

   5. Borrower forbearing tenant rent collections

   6. Failure of financial covenants for borrower or guarantor 

   7. Short term Brand defaults

3. Automatic Approval by Lender of relaxed Capex, Funding of PIP or FF&E Reserves, by brand

4. Loan Repayment - prepayable at any time without penalty or defeasance, can be satisfied in public company common shares

5. Borrower Right of First Refusal (ROFR) on its own loan.

6. Removal of any LIBOR floors

7. Extended Maturity Date will be the earlier of the existing maturity date or 5 years from the beginning of the crisis - 3/15/20 or when the property achieves a TTM Debt yield of 10%.   Extensions, to the extent of any, have no fees or tests.

8. 90-Day Forbearance 

   1. All debt service payments suspended with forborne interest added to principal.

   2. 90 days with automatic extension until 1.2 TTM DSCR achieved  “Recovery Date.”

   3. After Recovery Date achieved, all #2 items above removed except for #2.3

9. Lender Protected Cash Management

   1. Upon execution of forbearance agreement:

      1. Owner contributes three months of interest payments into an interest reserve for the benefit of the borrower and lender with credit given for all dollars funded since March 15, 2020 less those dollars reimbursed as per immediately below.

      2. Cash contributed by owner for operating shortfalls since March 15 reimbursed by monies from Capex Reserves (PIP & FF&E)

      3. Remaining dollars in Capex Reserves, dollars provided by any government sponsored lending aid (such as PPP) and other existing borrower cash becomes “Available Cash” to fund the provisions below:

   2. Before Recovery Date Cash waterfall as follows:

      1. Positive Operating Cash Flow (i.e. after reserves for ground leases, insurance, and property taxes are fully funded) added to Available Cash

      2. Deductions from Available Cash in order:

         1. First, for any negative Operating Cash Flow including occupancy taxes, property taxes, sales taxes, and insurance 

         2. Second, to pay debt service on government sponsored lending aid (such as PPP)

         3. Third, additional out-of-waterfall expenses capped at $90/room/month 

         4. Fourth, Capex Reserve replenishment (per then Brand requirements)

         5. Fifth, Government Sponsored Lending Aid Sinking Fund up to the amount of the outstanding loan balance,

         6. Sixth, balance held in Available Cash at borrower (and reported to Lender)

      3. Upon reaching the Recovery Date.   Any cash in Available Cash will be distributed as follows:

         1. First, to replenish Capex Reserves (per then Brand requirements)

         2. Second, to fill Government Sponsored Lending Aid Sinking Fund up to the outstanding loan balance

         3. Third to lender to pay down accrued interest

      4. After Recovery Date achieved, cash available from Operating Cash flow will be distributed as follows:

         1. First, to replenish Capex Reserves (per then Brand requirements)

         2. Second, to Government Sponsored Lending Aid debt service

         3. Third, to Lender Debt service

         4. Fourth, to Government Sponsored Lending Aid Sinking Fund up to the outstanding loan balance

         5. Fifth, to owner.