THIS PLEDGE AGREEMENT (this “Agreement”) is made and entered into, effective as of February 4, 2021, by and between LODGING FUND REIT III OP, LP, a Delaware limited partnership (“Pledgor”), and ACCESS POINT FINANCIAL, LLC, a Delaware limited liability company (“Access Point”).
WHEREAS, Pledgor is the legal and beneficial owner of one hundred percent (100%) of the outstanding membership interests (”Pledge Membership Interests”) of LF3 AURORA, LLC, a Delaware limited liability company (“LF3”); and
WHEREAS, Lender has agreed to make a loan to the LF3 and LF3 Aurora TRS, LLC (collectively, the “Borrower”) the sum of Fifteen Million and No/100 Dollars ($15,000,000.00) (the “Loan”) pursuant to that certain Promissory Note in the amount of $15,000,000.00 (the “Note”) and that certain Fee and Leasehold Deed of Trust and Security Agreement by Borrower in favor of Lender, (the “Security Instrument”); and
WHEREAS, to induce Access Point to make the Loan and to secure Borrower’s performance under the Note, Pledgor has agreed to pledge to Access Point all of Pledgor’s right, title and interest in and to the Pledge Membership Interests, as more fully set forth below.
NOW, THEREFORE, for and in consideration of the premises, the mutual covenants contained herein, and for Ten Dollars ($10.00) and all other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Pledge and Security Interest. Pledgor hereby unconditionally grants and assigns to Access Point a continuing first priority security interest in and security title to the Pledge Membership Interests, together with the proceeds thereof, and all cash, additional securities and other property at any time and from time to time receivable or otherwise distributable in respect of or in exchange for any or all of the Pledge Membership Interests (collectively, the “Collateral”). Pledgor represents and warrants to Access Point that: (a) Pledgor is the legal and equitable owner of the Pledge Membership Interests, and that percentage ownership set forth above for the Pledge Membership Interests is true and correct; and (b) except for the security interest created hereby, Pledgor owns the Pledge Membership Interests free and clear of all liens, charges, encumbrances and security interests of every kind and nature whatsoever. Beneficial ownership of the Pledge Membership Interests, including, without limitation, all voting, consensual and dividend rights, shall remain in Pledgor until the occurrence of an Event of Default (defined below).
2. Obligations Secured. This Agreement is made, and the pledge and security interest created hereby is granted to Access Point, to secure the payment and performance of all obligations of Borrowers to Access Point under the Note.