| 2F - Franchise Default. The loan is secured by a 208 room lodging facility in Yakima, WA built in 1968 and renovated in 1978. The property was inspected on 04/11/2009; rated in Good condition. The Q2-2009 NCF DSCR is 1.49 with an occupancy of 57%. Loan has been placed on the watchlist due to servicer was notified in May 2009 that the Borrower was in default of the franchise agreement. Letter from Franchisor indicated that the Borrower was in default of failure to pay franchise fees, services fees/membership dues, and travel agent commission fees when due. Per the 04/28/2009 Franchisor letter, the total amount of $16,616.12 is past due for franchise, marketing, and reservations fees, service charges, and membership dues; and, $2,635.21 is past due for travel agent commission fees. The 04/28/09 letter indicates that the Borrower has ten (10) days from the date of the letter (05/08/09) to pay the delinquent fees or the Franchisor will discontinue reservations and marketing services until the defaults are cured. The 4/28/09 letter further indicates that if the fees are not paid within ten days from the date of the letter, the Franchisor will charge a $5000 fee to reinstate reservations services and may exercise the option to terminate the Franchise Agreement. Per a May 2009 update, the Borrower indicated that the amounts due to Choice Hotels have been paid. Borrower is waiting to receive the default cure letter, and will forward a copy to servicer once received. Bank of America has contacted the Borrower to obtain a copy of the default cure letter; waiting for a response.
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