Borrower:

The borrower(s) under the Loan (whether one or more, collectively and individually (as the context may require), the “Borrower”) shall each be (i) newly formed or recycled single-purpose, bankruptcy remote entities, (ii) formed exclusively for the purpose of owning and operating the  Property  or  Properties, (iii)  satisfactory to Lender in all respects, and (iv) comply with all applicable rating agency criteria.

Sponsor:

Xxxxx

Property:

a xx,xxx sq. foot single tenant Walgreens retail building in Columbus GA, commonly known as Walgreens

Loan Amount:

An amount not to exceed $2,950,000

Purpose of Financing:

The  Loan  proceeds  will  be  used  by  Borrower  to  refinance  any  existing mortgage and mezzanine indebtedness secured directly or indirectly by the Property.

Interest Rate:

The interest rate shall be fixed at a per annum rate equal to the greater of (a) the sum of (i) 290 basis points plus (ii) the value of the 10 year  “on the run” U.S. Treasury rate, rounded up to the nearest 1/8th of 1%; (b) the sum of (i) 290 basis points plus (ii) the value of the 10 year “offer-side” swap rate (as determined by Lender) rounded up to the nearest 1/8th of 1%; and (c) 4.69%.  Interest shall accrue based on a 360-day year and the actual number of days elapsed.  Lender reserves all rights to adjust the spread applicable to the Loan at any time prior to closing.

Minimum DSCR:

As of the closing date, pursuant to the final Interest Rate and based upon underwritten net cash flow, each as determined by Lender, a minimum debt service coverage ratio (“DSCR”) of 1.30 to 1.00 at the greater of the actual debt service constant and 9.30%.

Minimum Debt Yield:

12% debt yield (“DY”) based upon underwritten net cash flow as determined by Lender.

Maximum LTV:

Loan to value ratio (“LTV”) not to exceed 57.5% based upon a FIRREA appraisal acceptable to Lender.

Term:

10 years

Amortization Term:

Fifteen (15) years

Collateral:

The Loan will be secured by a first mortgage or deed of trust on Borrower’s fee and/or leasehold interests in the Property; personal property (tangible and intangible) and fixtures; applicable reserves; a collateral assignment of all operating licenses, leases, management agreements, and all other agreements, each relating to the Property.  If the Property (or any portion thereof and/or interest therein) is held by virtue of a leasehold interest, the applicable lease must contain finance ability provisions satisfactory to Lender and the rating agencies and a satisfactory estoppel and agreement from the fee owner and each other applicable party must be provided.  Lender shall have the right to require that (i) each Property be owned by a separate Borrower, (ii) one or more of the liens on the Properties be cross-defaulted and cross-collateralized and (iii) any one or more of such “crossed” liens be “uncrossed” in connection with any Secondary Market Transaction (defined below) or otherwise.

Recourse:

Except for “bad boy” acts specified in the Loan Documents, the Loan shall be nonrecourse for which personal liability of Borrower and Sponsor shall be limited  to  the  collateral  for  the  Loan.     Sponsor  or  another  individual acceptable to Lender shall execute a recourse carve out guaranty with respect to the aforesaid “bad boy” acts.  Additionally, each of Borrower and Sponsor shall enter into an environmental indemnity agreement in favor of Lender.

Fees / Deposits:            

The following fees and deposits shall be payable by Applicant in connection herewith:

(i)      a $xx,xxx Application Fee, payable upon execution hereof.

(ii)    a $xx,xxx Good Faith Deposit, payable upon execution hereof and to be used to cover Lender’s out of pocket expenses incurred in connection herewith.

(iii)      if a commitment is requested by Borrower, a Commitment Deposit equal  to  1%  of  the  principal  amount  of  the  Loan,  to  be  paid  upon  the execution by Lender of a commitment letter (if issued) and to be used to cover Lender’s   out   of   pocket   expenses   incurred   in   connection   with   said commitment.

Each of Applicant, Borrower and Sponsor (each, a “Loan Party” and, collectively,  the  “Loan  Parties”)  shall  be  responsible  for  all  expenses incurred  by  Lender  in  connection  herewith  and  in  connection  with  the issuance of a commitment letter (if applicable), the closing of the Loan and the  collection  of  amounts  owed  pursuant  to  this  Term  Sheet  (including, without limitation, attorneys’ fees), regardless of whether or not the same are covered by the Good Faith Deposit or whether or not the Loan closes.  The Application Fee shall be non-refundable and shall be deemed fully earned by Lender upon receipt.  At closing, Lender shall refund to Borrower any portion of the Good Faith Deposit and Commitment Deposit (collectively, the “Deposits”) remaining after payment of all of Lender’s out of pocket costs. The unapplied portions of any Deposits may be retained by Lender in the event that the Loan fails to close due to any Loan Party’s (i) bad faith actions in connection therewith and/or (ii) failure to comply in a timely manner and/or breach of this Term Sheet and/or any commitment letter issued in connection herewith. The Loan Parties understand that the Deposits may not be sufficient to pay all of Lender’s expenses. Lender may require additional deposits to the Deposits from time to time if deemed necessary by Lender to be applied toward the payment of its expenses in connection herewith and in connection with the closing of the Loan, and Sponsor shall promptly pay such deposits to Lender upon demand from time to time.

Outside Closing Date:              

October 31, 2012.  If the Loan is not funded and closed on or prior to the Outside Closing Date, this Term Sheet shall, at Lender’s option and without notice to any Loan Party, be deemed terminated. Additionally,  in  the  event  any  party  (other  than  Lender)  fails  to comply with or breaches any term or provision hereof, this Term Sheet shall, at Lender’s option and without notice to any Loan Party, be deemed terminated.

Closing Requirements:

Approval of the Loan will be subject to satisfactory completion of Lender’s underwriting and due diligence, including review and approval of all information that Lender deems pertinent in its sole discretion.  Upon acceptance of this Term Sheet, Lender shall provide Borrower with its underwriting and legal closing checklists, the terms of which must be satisfied prior to closing.   Sponsor and Borrower shall cooperate with Lender in satisfying the foregoing, including, without limitation, by granting Lender and its designees full access (subject to the rights of tenants) to all portions of the Property for inspection and testing purposes, including, but not limited to, Phase I and Phase II environmental inspections.

Broker:

The Loan Parties agree to pay any and all fees imposed or charged by all brokers, mortgage bankers and advisors (each a “Broker”) hired or contracted by any Loan Party or their affiliates who brought about the issuance of this Term Sheet or the consideration of the Loan, and agree to indemnify and hold Lender harmless from and against any and all claims, demands and liabilities for brokerage commissions, assignment fees, finder’s fees or other compensation whatsoever arising from this Term Sheet or Lender’s extending the Loan which may be asserted against Lender by any person.   The foregoing indemnity shall survive any termination hereof and the closing of the Loan.   The Loan Parties hereby represent and warrant that the only Broker engaged by the Loan Parties with respect hereto is Financial Funding, LLC. Lender hereby agrees to pay any and all fees imposed or charged by all Brokers hired solely by Lender.  The Loan Parties acknowledge (a) that any Broker is not an agent of Lender and has no power or authority to bind Lender, (b) agrees that Lender is not responsible for any recommendations or advice given to any Loan Party by any Broker, (c) that Lender and the Loan Parties are dealing at arms’-length with each other in  a  commercial lending transaction, (d)  that  no  fiduciary or  other special relationship exists or shall exist between Lender and the Loan Parties and (e) that none of the Loan Parties shall be entitled to rely on any assurances or waiver given, or statements made or actions taken, by any Broker which purport to bind Lender or modify or otherwise affect this Term Sheet or the Loan, unless Lender has, in its sole discretion agreed in writing with the Loan Parties to such assurances, waivers, statements, actions or modifications.  The Loan Parties acknowledge and agree that Lender may, in its sole discretion, pay fees or compensation to any Broker in connection with or arising out of the closing and funding of the Loan.  Such fees and compensation, if any, (i) shall be in addition to any fees which may be paid by any Loan Party to such Broker and (ii) create a potential conflict of interest for Broker in its relationship with the Loan Parties.  Such fees and compensation, if applicable, may include a direct, one-time payment, servicing fees and/or incentive payments based on volume and size of financings involving Lender and such Broker.

Borrower:

The borrower(s) under the Loan (whether one or more, collectively and individually (as the context may require), the “Borrower”) shall each be (i) newly formed or recycled single-purpose, bankruptcy remote entities, (ii) formed exclusively for the purpose of owning and operating the  Property  or  Properties, (iii)  satisfactory to Lender in all respects, and (iv) comply with all applicable rating agency criteria.

Sponsor:

Xxxxx

Property:

a xx,xxx sq. foot single tenant Walgreens retail building in Albany GA, commonly known as Walgreens

Loan Amount:

An amount not to exceed $2,975,000.

Purpose of Financing:

The  Loan  proceeds  will  be  used  by  Borrower  to  refinance  any  existing mortgage and mezzanine indebtedness secured directly or indirectly by the Property.

Interest Rate:

The interest rate shall be fixed at a per annum rate equal to the greater of (a) the sum of (i) 290 basis points plus (ii) the value of the 10 year  “on the run” U.S. Treasury rate, rounded up to the nearest 1/8th of 1%; (b) the sum of (i) 290 basis points plus (ii) the value of the 10 year “offer-side” swap rate (as determined by Lender) rounded up to the nearest 1/8th of 1%; and (c) 4.69%.  Interest shall accrue based on a 360-day year and the actual number of days elapsed.  Lender reserves all rights to adjust the spread applicable to the Loan at any time prior to closing.

Minimum DSCR:

As of the closing date, pursuant to the final Interest Rate and based upon underwritten net cash flow, each as determined by Lender, a minimum debt service coverage ratio (“DSCR”) of 1.30 to 1.00 at the greater of the actual debt service constant and 9.30%.

Minimum Debt Yield:

12% debt yield (“DY”) based upon underwritten net cash flow as determined by Lender.

Maximum LTV:

Loan to value ratio (“LTV”) not to exceed 57.5% based upon a FIRREA appraisal acceptable to Lender.

Term:

10 years

Amortization Term:

Fifteen (15) years

Collateral:

The Loan will be secured by a first mortgage or deed of trust on Borrower’s fee and/or leasehold interests in the Property; personal property (tangible and intangible) and fixtures; applicable reserves; a collateral assignment of all operating licenses, leases, management agreements, and all other agreements, each relating to the Property.  If the Property (or any portion thereof and/or interest therein) is held by virtue of a leasehold interest, the applicable lease must contain finance ability provisions satisfactory to Lender and the rating agencies and a satisfactory estoppel and agreement from the fee owner and each other applicable party must be provided.  Lender shall have the right to require that (i) each Property be owned by a separate Borrower, (ii) one or more of the liens on the Properties be cross-defaulted and cross-collateralized and (iii) any one or more of such “crossed” liens be “uncrossed” in connection with any Secondary Market Transaction (defined below) or otherwise.

Recourse:

Except for “bad boy” acts specified in the Loan Documents, the Loan shall be nonrecourse for which personal liability of Borrower and Sponsor shall be limited  to  the  collateral  for  the  Loan.     Sponsor  or  another  individual acceptable to Lender shall execute a recourse carve out guaranty with respect to the aforesaid “bad boy” acts.  Additionally, each of Borrower and Sponsor shall enter into an environmental indemnity agreement in favor of Lender.

Fees / Deposits:            

The following fees and deposits shall be payable by Applicant in connection herewith:

 (i)      a $xx,xxx Application Fee, payable upon execution hereof.

 (ii)    a $xx,xxx Good Faith Deposit, payable upon execution hereof and to be used to cover Lender’s out of pocket expenses incurred in connection herewith.

 (iii)      if a commitment is requested by Borrower, a Commitment Deposit equal  to  1%  of  the  principal  amount  of  the  Loan,  to  be  paid  upon  the execution by Lender of a commitment letter (if issued) and to be used to cover Lender’s   out   of   pocket   expenses   incurred   in   connection   with   said commitment.

 Each of Applicant, Borrower and Sponsor (each, a “Loan Party” and, collectively,  the  “Loan  Parties”)  shall  be  responsible  for  all  expenses incurred  by  Lender  in  connection  herewith  and  in  connection  with  the issuance of a commitment letter (if applicable), the closing of the Loan and the  collection  of  amounts  owed  pursuant  to  this  Term  Sheet  (including, without limitation, attorneys’ fees), regardless of whether or not the same are covered by the Good Faith Deposit or whether or not the Loan closes.  The Application Fee shall be non-refundable and shall be deemed fully earned by Lender upon receipt.  At closing, Lender shall refund to Borrower any portion of the Good Faith Deposit and Commitment Deposit (collectively, the “Deposits”) remaining after payment of all of Lender’s out of pocket costs. The unapplied portions of any Deposits may be retained by Lender in the event that the Loan fails to close due to any Loan Party’s (i) bad faith actions in connection therewith and/or (ii) failure to comply in a timely manner and/or breach of this Term Sheet and/or any commitment letter issued in connection herewith. The Loan Parties understand that the Deposits may not be sufficient to pay all of Lender’s expenses. Lender may require additional deposits to the Deposits from time to time if deemed necessary by Lender to be applied toward the payment of its expenses in connection herewith and in connection with the closing of the Loan, and Sponsor shall promptly pay such deposits to Lender upon demand from time to time.

Outside Closing Date:              

October 31, 2012.  If the Loan is not funded and closed on or prior to the Outside Closing Date, this Term Sheet shall, at Lender’s option and without notice to any Loan Party, be deemed terminated. Additionally,  in  the  event  any  party  (other  than  Lender)  fails  to comply with or breaches any term or provision hereof, this Term Sheet shall, at Lender’s option and without notice to any Loan Party, be deemed terminated.

Closing Requirements:

Approval of the Loan will be subject to satisfactory completion of Lender’s underwriting and due diligence, including review and approval of all information that Lender deems pertinent in its sole discretion.  Upon acceptance of this Term Sheet, Lender shall provide Borrower with its underwriting and legal closing checklists, the terms of which must be satisfied prior to closing.   Sponsor and Borrower shall cooperate with Lender in satisfying the foregoing, including, without limitation, by granting Lender and its designees full access (subject to the rights of tenants) to all portions of the Property for inspection and testing purposes, including, but not limited to, Phase I and Phase II environmental inspections.

Broker:

The Loan Parties agree to pay any and all fees imposed or charged by all brokers, mortgage bankers and advisors (each a “Broker”) hired or contracted by any Loan Party or their affiliates who brought about the issuance of this Term Sheet or the consideration of the Loan, and agree to indemnify and hold Lender harmless from and against any and all claims, demands and liabilities for brokerage commissions, assignment fees, finder’s fees or other compensation whatsoever arising from this Term Sheet or Lender’s extending the Loan which may be asserted against Lender by any person.   The foregoing indemnity shall survive any termination hereof and the closing of the Loan.   The Loan Parties hereby represent and warrant that the only Broker engaged by the Loan Parties with respect hereto is Financial Funding, LLC. Lender hereby agrees to pay any and all fees imposed or charged by all Brokers hired solely by Lender.  The Loan Parties acknowledge (a) that any Broker is not an agent of Lender and has no power or authority to bind Lender, (b) agrees that Lender is not responsible for any recommendations or advice given to any Loan Party by any Broker, (c) that Lender and the Loan Parties are dealing at arms’-length with each other in  a  commercial lending transaction, (d)  that  no  fiduciary or  other special relationship exists or shall exist between Lender and the Loan Parties and (e) that none of the Loan Parties shall be entitled to rely on any assurances or waiver given, or statements made or actions taken, by any Broker which purport to bind Lender or modify or otherwise affect this Term Sheet or the Loan, unless Lender has, in its sole discretion agreed in writing with the Loan Parties to such assurances, waivers, statements, actions or modifications.  The Loan Parties acknowledge and agree that Lender may, in its sole discretion, pay fees or compensation to any Broker in connection with or arising out of the closing and funding of the Loan.  Such fees and compensation, if any, (i) shall be in addition to any fees which may be paid by any Loan Party to such Broker and (ii) create a potential conflict of interest for Broker in its relationship with the Loan Parties.  Such fees and compensation, if applicable, may include a direct, one-time payment, servicing fees and/or incentive payments based on volume and size of financings involving Lender and such Broker.

Borrower:

The borrower(s) under the Loan (whether one or more, collectively and individually (as the context may require), the “Borrower”) shall each be (i) newly formed or recycled single-purpose, bankruptcy remote entities, (ii) formed exclusively for the purpose of owning and operating the  Property  or  Properties, (iii)  satisfactory to Lender in all respects, and (iv) comply with all applicable rating agency criteria.

Sponsor:

Xxxxx

Property:

a 16,000 sq. foot single tenant Walgreens retail building in Columbus GA, commonly known as Walgreens

Loan Amount:

An amount not to exceed $3,000,000.

Purpose of Financing:

The  Loan  proceeds  will  be  used  by  Borrower  to  refinance  any  existing mortgage and mezzanine indebtedness secured directly or indirectly by the Property.

Interest Rate:

The interest rate shall be fixed at a per annum rate equal to the greater of (a) the sum of (i) 290 basis points plus (ii) the value of the 10 year  “on the run” U.S. Treasury rate, rounded up to the nearest 1/8th of 1%; (b) the sum of (i) 290 basis points plus (ii) the value of the 10 year “offer-side” swap rate (as determined by Lender) rounded up to the nearest 1/8th of 1%; and (c) 4.69%.  Interest shall accrue based on a 360-day year and the actual number of days elapsed.  Lender reserves all rights to adjust the spread applicable to the Loan at any time prior to closing.

Minimum DSCR:

As of the closing date, pursuant to the final Interest Rate and based upon underwritten net cash flow, each as determined by Lender, a minimum debt service coverage ratio (“DSCR”) of 1.30 to 1.00 at the greater of the actual debt service constant and 9.30%.

Minimum Debt Yield:

12% debt yield (“DY”) based upon underwritten net cash flow as determined by Lender.

Maximum LTV:

Loan to value ratio (“LTV”) not to exceed 57.5% based upon a FIRREA appraisal acceptable to Lender.

Term:

10 years

Amortization Term:

Fifteen (15) years

Collateral:

The Loan will be secured by a first mortgage or deed of trust on Borrower’s fee and/or leasehold interests in the Property; personal property (tangible and intangible) and fixtures; applicable reserves; a collateral assignment of all operating licenses, leases, management agreements, and all other agreements, each relating to the Property.  If the Property (or any portion thereof and/or interest therein) is held by virtue of a leasehold interest, the applicable lease must contain finance ability provisions satisfactory to Lender and the rating agencies and a satisfactory estoppel and agreement from the fee owner and each other applicable party must be provided.  Lender shall have the right to require that (i) each Property be owned by a separate Borrower, (ii) one or more of the liens on the Properties be cross-defaulted and cross-collateralized and (iii) any one or more of such “crossed” liens be “uncrossed” in connection with any Secondary Market Transaction (defined below) or otherwise.

Recourse:

Except for “bad boy” acts specified in the Loan Documents, the Loan shall be nonrecourse for which personal liability of Borrower and Sponsor shall be limited  to  the  collateral  for  the  Loan.     Sponsor  or  another  individual acceptable to Lender shall execute a recourse carve out guaranty with respect to the aforesaid “bad boy” acts.  Additionally, each of Borrower and Sponsor shall enter into an environmental indemnity agreement in favor of Lender.

Fees / Deposits:            

The following fees and deposits shall be payable by Applicant in connection herewith:

 (i)      a $xx,xxx Application Fee, payable upon execution hereof.

 (ii)    a $xx,xxx Good Faith Deposit, payable upon execution hereof and to be used to cover Lender’s out of pocket expenses incurred in connection herewith.

 (iii)      if a commitment is requested by Borrower, a Commitment Deposit equal  to  1%  of  the  principal  amount  of  the  Loan,  to  be  paid  upon  the execution by Lender of a commitment letter (if issued) and to be used to cover Lender’s   out   of   pocket   expenses   incurred   in   connection   with   said commitment.

 Each of Applicant, Borrower and Sponsor (each, a “Loan Party” and, collectively,  the  “Loan  Parties”)  shall  be  responsible  for  all  expenses incurred  by  Lender  in  connection  herewith  and  in  connection  with  the issuance of a commitment letter (if applicable), the closing of the Loan and the  collection  of  amounts  owed  pursuant  to  this  Term  Sheet  (including, without limitation, attorneys’ fees), regardless of whether or not the same are covered by the Good Faith Deposit or whether or not the Loan closes.  The Application Fee shall be non-refundable and shall be deemed fully earned by Lender upon receipt.  At closing, Lender shall refund to Borrower any portion of the Good Faith Deposit and Commitment Deposit (collectively, the “Deposits”) remaining after payment of all of Lender’s out of pocket costs. The unapplied portions of any Deposits may be retained by Lender in the event that the Loan fails to close due to any Loan Party’s (i) bad faith actions in connection therewith and/or (ii) failure to comply in a timely manner and/or breach of this Term Sheet and/or any commitment letter issued in connection herewith. The Loan Parties understand that the Deposits may not be sufficient to pay all of Lender’s expenses. Lender may require additional deposits to the Deposits from time to time if deemed necessary by Lender to be applied toward the payment of its expenses in connection herewith and in connection with the closing of the Loan, and Sponsor shall promptly pay such deposits to Lender upon demand from time to time.

Outside Closing Date:              

October 31, 2012.  If the Loan is not funded and closed on or prior to the Outside Closing Date, this Term Sheet shall, at Lender’s option and without notice to any Loan Party, be deemed terminated. Additionally,  in  the  event  any  party  (other  than  Lender)  fails  to comply with or breaches any term or provision hereof, this Term Sheet shall, at Lender’s option and without notice to any Loan Party, be deemed terminated.

Closing Requirements:

Approval of the Loan will be subject to satisfactory completion of Lender’s underwriting and due diligence, including review and approval of all information that Lender deems pertinent in its sole discretion.  Upon acceptance of this Term Sheet, Lender shall provide Borrower with its underwriting and legal closing checklists, the terms of which must be satisfied prior to closing.   Sponsor and Borrower shall cooperate with Lender in satisfying the foregoing, including, without limitation, by granting Lender and its designees full access (subject to the rights of tenants) to all portions of the Property for inspection and testing purposes, including, but not limited to, Phase I and Phase II environmental inspections.

Broker:

The Loan Parties agree to pay any and all fees imposed or charged by all brokers, mortgage bankers and advisors (each a “Broker”) hired or contracted by any Loan Party or their affiliates who brought about the issuance of this Term Sheet or the consideration of the Loan, and agree to indemnify and hold Lender harmless from and against any and all claims, demands and liabilities for brokerage commissions, assignment fees, finder’s fees or other compensation whatsoever arising from this Term Sheet or Lender’s extending the Loan which may be asserted against Lender by any person.   The foregoing indemnity shall survive any termination hereof and the closing of the Loan.   The Loan Parties hereby represent and warrant that the only Broker engaged by the Loan Parties with respect hereto is Financial Funding, LLC. Lender hereby agrees to pay any and all fees imposed or charged by all Brokers hired solely by Lender.  The Loan Parties acknowledge (a) that any Broker is not an agent of Lender and has no power or authority to bind Lender, (b) agrees that Lender is not responsible for any recommendations or advice given to any Loan Party by any Broker, (c) that Lender and the Loan Parties are dealing at arms’-length with each other in  a  commercial lending transaction, (d)  that  no  fiduciary or  other special relationship exists or shall exist between Lender and the Loan Parties and (e) that none of the Loan Parties shall be entitled to rely on any assurances or waiver given, or statements made or actions taken, by any Broker which purport to bind Lender or modify or otherwise affect this Term Sheet or the Loan, unless Lender has, in its sole discretion agreed in writing with the Loan Parties to such assurances, waivers, statements, actions or modifications.  The Loan Parties acknowledge and agree that Lender may, in its sole discretion, pay fees or compensation to any Broker in connection with or arising out of the closing and funding of the Loan.  Such fees and compensation, if any, (i) shall be in addition to any fees which may be paid by any Loan Party to such Broker and (ii) create a potential conflict of interest for Broker in its relationship with the Loan Parties.  Such fees and compensation, if applicable, may include a direct, one-time payment, servicing fees and/or incentive payments based on volume and size of financings involving Lender and such Broker.

Property:

A two property hotel portfolio consisting of the following hotels:

    a 124 room hotel located at xxxxxx, ND

    a 248 room hotel located at xxxxxx, ND

Loan Amount:

Up to $22,500,000, subject to a minimum DSCR (described below) at closing of 2.00x, a minimum Debt Yield (described below) of no less than 15.0%, and subject to a maximum Loan to Value Ratio (described below) of 65.0%.  If the required DSCR, Debt Yield, Loan to Value Ratio, are not satisfied, Lender may, in its sole and absolute discretion, reduce the Loan Amount or decline to make the Loan and terminate the Borrower’s Loan request.

Interest Rate:

The “Interest Rate” shall be calculated by adding 318 basis points (the “Spread”) to the yield on the five (5) year on-the-run swap rate, however, in no event shall the Interest Rate be less than 4.75%.  The on-the-run five (5) year swap rate is the five (5) year U.S. Treasury rate, plus the five (5) year swap spread.  Interest on the outstanding Loan Amount, based on the Interest Rate, shall be payable monthly in arrears, calculated on the basis of the actual number of days in the month and a 360-day year.

Amortization:

A constant monthly payment of principal and interest will be due and payable on each Payment Date in an amount sufficient to fully amortize such Loan over a 20-year amortization schedule.

Borrower:

The borrower (the "Borrower") and its general partner/managing member shall each be a newly formed special purpose, bankruptcy-remote, U.S. entity acceptable to Lender which satisfies all applicable rating agency criteria and is formed exclusively for the purpose of owning and operating the Property or a "recycled" single purpose, bankruptcy remote U.S. entity, acceptable to Lender, which satisfies all applicable Lender and rating agency criteria, has never conducted any prior activity other than its ownership and operation of the Property, related personal property & FF&E and makes customary backwards representations.  In addition the Borrower shall have two (2) independent directors or independent managers in accordance with rating agency requirements.

Borrower shall deliver at closing of the Loan a bankruptcy remoteness and non-consolidation opinion in form and substance satisfactory to Lender and in accordance with rating agency requirements.

Sponsor:

xxxxx, to be approved by Lender in its sole and absolute discretion, on a joint and several basis.

Lender:

German American Capital Corporation or an affiliate.

Term:

The term of the Loan (the "Term") shall be five (5) years from the initial closing of the Loan.

DSCR:

The DSCR shall be calculated by dividing the underwritten net cash flow of the Property determined by Lender in its sole and absolute discretion (the “UWNCF”) by the debt service due on the Loan based on the actual interest rate on the Loan and assuming an amortization term of 20 years.

Debt Yield:

The Debt Yield shall be calculated by dividing the UWNCF by the Loan Amount.

Loan to Value Ratio:

The Loan to Value Ratio shall be established as the ratio of the amount of the Loan to the “as-is” value as shown in an MAI appraisal obtained by Lender at Borrower’s cost and approved by Lender in form and substance.

Security:

The Loan will be secured by, inter alia, (i) a first priority mortgage/deed of trust in the Borrower’s fee simple interest in the Property, (ii) an assignment of all leases and rents, licenses, contracts, agreements, accounts, receivables, personal property, furniture, fixtures and equipment, and an assignment of guest reservation software, customer data, trade names and other intellectual property used or useful in the operation of the Property and any other personal property relating to the Property and (iii) such other collateral customary for a loan of this type, including without limitation, a first priority perfected security interest in all accounts that are held by any manager for the benefit of the Borrower or the Property.

Brokers:

Borrower and Sponsor each represent and confirm that it has engaged Financial Funding, LLC as a broker for the Loan (the “Broker”) and shall be solely responsible for paying all fees and commissions due to such broker. Accordingly, it is hereby agreed that all costs, finders' fees, commissions, concessions remuneration or similar fees or compensation relating to the financing are the sole and absolute responsibility of Borrower and Sponsor.  Borrower and Sponsor each agree (on a joint and several basis) to indemnify and hold Lender and its affiliates harmless from and against any and all compensation sought by any party who makes claim for commission or compensation related to the Loan.  This section shall be binding upon Sponsor and Borrower.

Good Faith Deposit and Costs and Expenses:

$xx,xxx payable at the execution of this Summary of Terms and Conditions. Sponsor and Borrower shall pay all out-of-pocket expenses incurred by Lender and its affiliates in connection with the Loan, whether or not the Loan closes.  Such expenses may include, without limitation, legal fees, consultant fees, third party vendor fees, travel expenses, a loan processing fee of $7,500, which loan processing fee shall be fully earned and non-refundable at closing, syndication costs, bifurcation costs and expenses, due diligence costs, underwriting costs and other miscellaneous expenses.  If at any time Lender reasonably determines that the funds on deposit with Lender will not be sufficient to cover Lender’s anticipated expenses, upon request, Sponsor shall promptly deposit such additional funds as Lender may reasonably determine are necessary to cover such expenses.  Any unused deposits, other than the loan processing fee, will be credited to the Borrower at closing.

Standard Rate Lock; Loan Terms:

Subject to (i) the execution by Sponsor of Lender’s standard Interest Rate Lock Agreement and (ii) the delivery to Lender of a deposit equal to 2.0% of the Loan Amount, which will be refunded to Sponsor if and when the Loan closes, the Sponsor may lock the rate of the Loan ("Rate Lock") prior to the closing date of the Loan.  Borrower and Sponsor will bear all costs of any Rate Lock, including, without limitation, all hedging and breakage costs and per diem carrying expenses incurred in connection with the Rate Lock. 

If the Loan does not close on or before the expiration of the Rate Lock Period (as defined in the Interest Rate Lock Agreement), the Rate Lock shall terminate in Lender’s sole and absolute discretion and be of no further force and effect and Borrower and Sponsor shall be jointly and severally liable for any and all hedging and breakage costs and per diem carrying expenses incurred by Lender.