Exhibit 10.6

 

PURCHASE AND SALE AGREEMENT

 

BY AND BETWEEN

 

BEHRINGER HARVARD MOCKINGBIRD COMMONS, LLC

 

AS SELLER

 

AND

 

THI VI DALLAS MOCKINGBIRD LLC

 

AS PURCHASER

 

 

 

 

Table of Contents

 

    Page       ARTICLE I  Sale 1 1.1 Real Property 1 1.2 Personal Property 2 1.3
Contracts and Leases 2       ARTICLE II Purchase Price 3 2.1 Purchase Price 3
2.2 Allocation of Purchase Price 3 2.3 Deposit 3 2.4 Assumption of Existing Loan
4       ARTICLE III Seller's Representations, Warranties and Covenants 5 3.1
Good Standing 5 3.2 Title 5 3.3 Due Authorization 5 3.4 No Violations or
Defaults 6 3.5 Bankruptcy 6 3.6 Space Leases 6 3.7 Equipment Leases, Service
Contracts and Rooms Agreements 6 3.8 Litigation 6 3.9 Compliance with Laws 6
3.10 Condemnation Actions 6 3.11 Hazardous Materials 7 3.12 Employees 7 3.13
Management and Franchise Agreements 7 3.14 Existing Loan 8 3.15 Terrorist
Organizations List 8 3.16 Financial Information 8 3.17 Certain Limitations on
Seller's Representations and Warranties 8       ARTICLE IV Purchaser's
Representations, Warranties and Covenants 9 4.1 Good Standing 9 4.2 Due
Authorization 9 4.3 Litigation 10 4.4 Terrorist Organizations List 10 4.5
Bankruptcy 10       ARTICLE V Closing 10 5.1 Closing 10 5.2 Costs 10

 

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Table of Contents

(continued)

 

ARTICLE VI Actions Pending Closing 11 6.1 Conduct of Business; Maintenance and
Operation of Property 11 6.2 Title 11 6.3 Survey 12 6.4 Cooperation 12 6.5
Service Contracts; Equipment Leases; Space Leases 13 6.6 Liquor License 13 6.7
Inspection 14 6.8 Feasibility Period 16 6.9 Existing Loan 17 6.10 WARN Act 17
6.11 Tax Clearance Certificate 18 6.12 Termination of Manager 18       ARTICLE
VII Purchaser's Conditions Precedent to Closing 18 7.1 Representations and
Warranties 18 7.2 Covenants of Seller 18 7.3 Termination of Existing Management
Agreement 19 7.4 Title 19 7.5 Approval of Assumption of Existing Loan 19 7.6
Failure of Condition 19       ARTICLE VIII Seller's Conditions Precedent to
Closing 19 8.1 Representations and Warranties 19 8.2 Covenants of Purchaser 19
8.3 Purchase Price 19 8.4 Approval of Assumption of Existing Loan 19 8.5 Failure
of Condition 20       ARTICLE IX Closing Deliveries 20 9.1 Deed 20 9.2 Bill of
Sale 20 9.3 Assignment of Permits and Licenses 20 9.4 Assignment of Service
Contracts, Rooms Agreements and Equipment Leases 20 9.5 FIRPTA Certificate 20
9.6 Assignment of Space Leases and Brackets Lease 20 9.7 Assignment of
Consulting Agreement 20 9.8 Closing Statement 20 9.9 Loan Assumption Documents
21 9.10 Termination of Excluded Contracts 21 9.11 Assignment of Declarant's
Rights 21 9.12 Resignation of Directors 21 9.13 Estoppels 21 9.14 Termination of
Existing Management Agreement 21 9.15 Consents 21 9.16 Original Documents 21

 

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Table of Contents

(continued)

 

9.17 Other Documents 21 9.18 Possession; Keys, Guest and Sales Information 21
9.19 Purchase Price 21       ARTICLE X Default 22 10.1 Purchaser's Default 22
10.2 Seller's Default 22       ARTICLE XI RELEASE/Indemnification 23 11.1
"AS-IS" CONVEYANCE 23 11.2 Agreement to Indemnify 25 11.3 Notice and Cooperation
on Indemnification 25       ARTICLE XII Casualty or Condemnation 26      
ARTICLE XIII Apportionments 26 13.1 Apportionments 26 13.2 Deposits 27 13.3 Room
Revenue 27 13.4 Accounts Receivable; Accounts Payable 27 13.5 Food and Beverage
Revenue; Vending Machine Revenue 28 13.6 Guests’ Property 28 13.7 Accounting 28
13.8 Employee Compensation 28 13.9 Existing Loan 29 13.10 Post-Closing True-Up
29 13.11 Gift Certificates 29       ARTICLE XIV Miscellaneous 30 14.1 Survival
30 14.2 Assignment 30 14.3 Consents 30 14.4 Applicable Law 30 14.5 Headings;
Exhibits and Schedules 30 14.6 Notices 30 14.7 Limitation on Liability 31 14.8
Waiver 32 14.9 Partial Invalidity 32 14.10 Entire Agreement 32 14.11 Time is of
the Essence 32 14.12 Waiver of Jury Trial 32 14.13 Counterparts 32 14.14
Brokerage 32 14.15 Time for Performance 32 14.16 No Public Disclosure 33 14.17
Recordation 33

 

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Definitions

 

The following capitalized terms used in this Agreement are defined in the
sections indicated below:

 

Accountants   Section 13.7 Accounts Receivable   Section 1.2 Additional Deposit
  Section 2.3 Affiliate   Section 3.14(a) Agreement   Introduction Apportionment
Date   Section 13.1 Appurtenances   Section 1.1 Brackets Lease   Section 6.5
Brackets TI/LC Amount   Section 6.5 Closing   Section 5.1 Closing Date   Section
5.1 Closing Statement   Section 9.8 Confidential Information   Section 6.7(d)
Consents   Section 6.8(a) Consent Notice   Section 6.8(a) Consent Notice
Deadline   Section 6.8(a) Consent Termination Notice   Section 6.8(a) Consulting
Agreement   Section 6.1(b) Continuing Employees   Section 6.10(a) Contract Date
  Introduction Conversion Kitchen Equipment   Section 1.2 Cut-Off Time   Section
13.1 Deed   Section 9.1 Deposit   Section 2.3 Due Diligence Materials   Section
6.7(a) Equipment Leases   Section 1.3 Escrow Agent   Section 2.1 Escrow
Instructions   Section 2.3 Encumbrances   Section 6.2(a) Environmental Laws  
Section 3.11(a) Environmental Reports   Section 3.11(b) Excluded Contracts  
Section 6.8(c) Excluded Personal Property   Section 1.2 Existing Lender  
Section 2.4(a) Existing Loan   Section 2.4(a) Existing Loan Assumption Fees  
Section 2.4(a) Existing Loan Documents   Section 3.14(a) Existing Management
Agreement   Section 3.13 FF&E   Section 1.2 Feasibility Period   Section 6.8(b)
Fixed Asset Supplies   Section 1.2 Gift Certificate Schedule   Section 13.11

 

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Hazardous Materials   Section 3.11(a) Hotel Employees   Section 6.10(a)
Improvements   Section 1.1 Initial Deposit   Section 2.3 Inventories   Section
1.2 Investigation Claims   Section 6.7(e) Land   Section 1.1 Lender   Section
2.4(a) Liquor Entity   Section 6.4 Loan Assumption Documents   Section 7.5 Loan
Assumption Term Sheet   Section 2.4(a) Loan Prepayment   Section 2.4(c)
Management Termination Fee   Section 6.12 Manager   Section 1.2 Manager
Acknowledgment   Section 6.12 Permitted Exceptions   Section 6.2(b) Permitted
Outside Parties   Section 6.7(d) Person   Section 3.15 Personal Property  
Section 1.2 Pre-Closing Loan Default   Section 3.14(b) Property   Article I PTO
Credit   Section 13.8 Purchase Price   Section 2.1 Purchaser   Introduction
Purchaser Investigations   Section 6.7(a) Purchaser Reports   Section 6.7(a)
Purchaser Representatives   Section 6.7(a) Real Property   Section 1.1
Restaurant Conversion   Section 6.1(b) Rooms Agreements   Section 1.3 Seller  
Introduction Seller Investigation Indemnified Parties   Section 6.7(e) Service
Contracts   Section 1.3 Space Leases   Section 1.3 Termination Notice   Section
6.8(b) Tesar Entity   Section 6.1(b) Title Commitment   Section 6.2(a) Title
Company   Section 6.2(a) Title Objection Notice   Section 6.2(b) Title Policy  
Section 6.2(a) True-Up   Section 13.10 Uniform System of Accounts   Section 1.2
WARN Act   Section 6.10(a)

 

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PURCHASE AND SALE AGREEMENT

 

THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is executed as of the 6th
day of May, 2014 (the "Contract Date") by and between BEHRINGER HARVARD
MOCKINGBIRD COMMONS, LLC, a Delaware limited liability company (the "Seller"),
and THI VI DALLAS MOCKINGBIRD LLC, a Delaware limited liability company (the
"Purchaser").

 

ARTICLE I

 

Sale

 

Subject to the terms and conditions set forth in this Agreement, Seller agrees
to sell and convey to Purchaser, and Purchaser agrees to buy from Seller the
following (collectively, the “Property”):

 

1.1           Real Property. That certain parcel of land situated in Dallas,
Texas located at 5300 and 5330 East Mockingbird Lane, as described on Exhibit A
attached hereto (the "Land"), including all right, title and interest of Seller,
if any, in and to the land lying in the bed of any street or highway in front of
or adjoining each such parcel to the center line thereof, all water and mineral
rights, development rights and all easements, rights and other interests
appurtenant thereto (the "Appurtenances"), and together with all buildings and
other improvements that are located thereon currently operated as a hotel and
retail facility, including, without limitation, all elevators, escalators,
furnaces, heating, ventilating and air-conditioning systems and equipment,
fixtures, electrical equipment, fire prevention and extinguishing apparatus
located therein (the "Improvements"). The Land, the Appurtenances, the
Improvements and Seller's development rights in connection with the foregoing
collectively are referred to herein as the "Real Property."

 

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1.2           Personal Property. All of Seller's right, title and interest, if
any, in the following personalty: (a) all furniture, furnishings, fixtures
(other than those which are part of the Improvements), machinery, signage,
plans, drawings, works of art, rugs, mats, carpeting, appliances, devices,
engines, telephone and other communications equipment, televisions and other
video equipment, plumbing fixtures, kitchen equipment (including, without
limitation, remaining equipment, if any, removed from the former Central 214
restaurant in connection with the Restaurant Conversion which Seller shall use
reasonable efforts to deliver to Purchaser at Closing (the “Conversion Kitchen
Equipment”)) and other equipment located in or related to the Real Property
(collectively, the "FF&E"); (b) all computer equipment located in the Real
Property and all computer software used at the Real Property, subject to the
terms of any applicable license agreements, (c) all items included within the
definition of "Property and Equipment" under the Uniform System of Accounts for
the Lodging Industry, Tenth Revised Edition, as published by the Hotel
Association of New York City, Inc. (the "Uniform System of Accounts"),
including, without limitation, linen, china, glassware, tableware, uniforms and
similar items, whether in use or held in stock for future use, in connection
with the operation of the Real Property, subject to such depletion and including
such resupplies prior to the Closing Date as shall occur in the ordinary course
of business (the "Fixed Asset Supplies"); (d) all "Inventories" as defined in
the Uniform System of Accounts, such as provisions in storerooms, refrigerators,
pantries, and kitchens, all food and beverages (alcoholic and non-alcoholic)
which are located at the Real Property, whether opened or unopened, other
merchandise intended for sale or resale, fuel, mechanical supplies, stationery,
guest supplies, maintenance and housekeeping supplies and other expensed
supplies and similar items (the "Inventories"), provided that to the extent that
any applicable law prohibits the transfer of alcoholic beverages from Seller to
Purchaser, such beverages shall not be considered a part of Inventories; (e) the
aggregate amount of any deposits received by Seller (whether paid in cash or by
credit card) as a down payment for reservations made for rooms, banquets, meals
or other services to be supplied from and/or after the Closing Date; (f) to the
extent in Seller's (or its agents' or Affiliates’) possession, surveys,
architectural, consulting and engineering blueprints, plans and specifications
and drawings related to the Real Property, all telephone numbers, all
non-proprietary customer and guest lists, databases and information and any
goodwill of Seller; (g) all trade names used exclusively in connection with the
operation of the Real Property, (h) subject to Section 13.4(a), the accounts
receivable related to the Property (the “Accounts Receivable”), and (i) any and
all other items of personalty located on, or used in connection with the
operation of, the Real Property, (all of the foregoing, collectively, the
"Personal Property"). The Personal Property specifically excludes (i) all
property of guests; (ii) all items, except for Conversion Kitchen Equipment, if
any, owned by Kimpton Hotel & Restaurant Group, LLC, a Delaware limited
liability company ("Manager") or any affiliates of Manager, and tenants under
the Space Leases; (iii) all tax deposits, utility deposits and other deposits
held by parties other than Seller, except for any transferable deposits assigned
to Purchaser, for which Seller is to be reimbursed as herein provided; (iv) any
tax, insurance, FF&E, capital improvement and/or other escrows, impounds or
reserves held by Manager or any other party, except to the extent such items are
specifically assigned to Purchaser and for which Seller is reimbursed, and
except for the Brackets TI/LC Amount which shall be assigned to Purchaser
without reimbursement to Seller; (vi) all cash (including cash on hand) and cash
equivalents, checks, drafts, notes and other evidence of indebtedness held at
the Real Property on the Closing Date, and any balances on deposit with banking
institutions relating to the Real Property (subject to the provisions of Section
13.9), including amounts held in "house banks"; and (vii) any right of Seller in
and to any agreement with Manager or any Service Contracts or any other
agreements that are not assignable without consent, for which Purchaser and
Seller have not obtained consent prior to Closing (collectively, the "Excluded
Personal Property").

 

1.3           Contracts and Leases. All of Seller's right, title and interest,
if any, under (a) the leases of vehicles, equipment, furnishings or other
personal property located at, and used in connection with, the operation of the
Real Property, to the extent assignable (the "Equipment Leases"); (b) the
service, maintenance and other agreements in connection with the operation of
the Real Property identified in Exhibit B attached hereto, to the extent
assignable (the "Service Contracts"); (c) the leases, licenses, concessions and
other agreements granting any occupancy, possessory or entry rights in or to the
Real Property, identified in Exhibit C attached hereto (the "Space Leases"),
including any prepaid rents or deposits held by Seller (or Manager) thereunder;
and (d) the corporate, airline, bus, tour operator, barter and similar
agreements identified in Exhibit D attached hereto, pursuant to which third
parties have been given certain rights to rooms or services at the Real Property
from and/or after the Closing Date (the "Rooms Agreements"), but specifically
excluding the Excluded Contracts.

 

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ARTICLE II

 

Purchase Price

 

2.1           Purchase Price. In accordance with the terms of this Agreement,
Seller shall sell and Purchaser shall buy the Property for a total purchase
price of FORTY-EIGHT MILLION AND NO 100THS Dollars ($48,000,000.00), subject to
Purchaser's assumption of the Existing Loan pursuant to Section 2.4 and
adjustment as described in Article XIII below (the "Purchase Price"), payable to
Seller on the Closing Date by wire transfer to First American Title Insurance
Company, Attn: Jennifer D. Panciera, as agent for the Title Company (the "Escrow
Agent").

 

2.2           Allocation of Purchase Price. The Purchase Price shall be
allocated among the Real Property and various items of Personal Property as set
forth on Exhibit E attached hereto. The parties agree that this allocation has
been arrived at by a process of arm's-length negotiations, including, without
limitation, the parties' best judgment as to the fair market value of each
respective asset, and the parties specifically agree to the allocation as final
and binding, and will consistently reflect those allocations on their respective
federal, state and local tax returns, including any state, county and other
local transfer or sales tax declarations or forms to be filed in connection with
this transaction, which obligations shall survive the Closing.

 

2.3           Deposit. Within one (1) business day following the Contract Date,
Purchaser shall deliver to Escrow Agent a deposit (together with any interest
earned thereon, the "Initial Deposit") in the amount of One Million and No
100ths Dollars ($1,000,000.00), comprised of immediately available funds. In
addition, unless Purchaser timely delivers a Termination Notice in accordance
with Section 6.8(b), no later than one (1) day after the expiration of the
Feasibility Period, Purchaser shall deliver to Escrow Agent, in immediately
available funds, an additional amount of One Million and No 100ths Dollars
($1,000,000.00) (together with any interest earned thereon, the "Additional
Deposit"). The Initial Deposit and the Additional Deposit (if posted) are
referred to herein as the "Deposit". Escrow Agent shall hold the Deposit in
accordance with the form of escrow instructions (the "Escrow Instructions")
attached hereto as Exhibit F. Purchaser acknowledges and agrees that unless
Purchaser timely delivers a Termination Notice in accordance with Section
6.8(b), then from and after the expiration of the Feasibility Period, the
Deposit shall be deemed to be non-refundable to Purchaser except as otherwise
provided in this Agreement. At Closing, the amount of the Deposit shall be
applied to and credited against payment of the Purchase Price.

 

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2.4           Assumption of Existing Loan.

 

(a)          Unless Purchaser elects the Loan Prepayment, a portion of the
Purchase Price shall be deemed paid by Purchaser acquiring title to the Property
encumbered by, and Purchaser's assumption of, the mortgage loan in the initial
principal amount of Thirty-One Million and No/100 Dollars ($31,000,000.00) made
by Great American Life Insurance Company (the "Lender", and together with any
servicer of the Existing Loan, collectively referred to herein as the "Existing
Lender") to Seller on December 20, 2012 (the "Existing Loan"). At Closing,
unless Purchaser elects the Loan Prepayment pursuant to Section 2.4(c) below,
the amount of the then outstanding principal balance of the Existing Loan shall
be applied and credited toward the payment of the Purchase Price. Promptly
following the Contract Date, Seller shall (i) notify the Existing Lender of its
desire to transfer the Property subject to the Existing Loan, (ii) introduce
Purchaser to the Existing Lender and (iii) work in good faith with Purchaser and
Existing Lender to obtain, prior to the Consent Notice Deadline, information
from the Existing Lender regarding the terms upon which an assignment of the
Existing Loan would be approved. After the Consent Notice Deadline, if this
Agreement remains in effect, Purchaser shall commence the application process
required by the Existing Lender for the assumption of the Existing Loan,
together with the assumption and application fee(s), if any, required to process
the Purchaser's proposed assumption of the Existing Loan, and Purchaser and
Seller shall thereafter diligently pursue said assignment and assumption of the
Existing Loan. Prior to the expiration of the Feasibility Period, Purchaser and
Seller shall use good faith efforts to obtain a term sheet approved by Purchaser
and Seller in their reasonable discretion or other written evidence provided by
Existing Lender (A) confirming that Purchaser's assumption of the Existing Loan
has been approved and will be consummated on or prior to the Closing Date, and
(B) setting forth the material terms and conditions upon which Existing Lender
has agreed to approve Purchaser's assumption of the Existing Loan and release
all obligations of Seller and any guarantors of the Existing Loan, including,
without limitation, the amount of any assumption and application fees and the
identity of any guarantors and/or indemnitors which are to replace the current
guarantors and/or indemnitors under the Existing Loan (the "Loan Assumption Term
Sheet"). For the avoidance of doubt, Seller shall only have approval rights over
that portion of the Loan Assumption Term Sheet that sets forth the terms and
conditions of the aforementioned release of Seller and any guarantors of the
Existing Loan. Purchaser shall provide Seller with copies of all material
correspondence (omitting any information which is confidential or proprietary in
nature) between Purchaser and Existing Lender relating to the status of the
request to assume the Existing Loan. If Purchaser's assumption of the Existing
Loan is approved by Existing Lender upon the terms and conditions set forth in
the Loan Assumption Term Sheet, Purchaser shall be solely responsible for the
payment of any and all assumption fees and other expenses (including legal fees)
charged by the Existing Lender relating to the assumption of the Existing Loan
(the "Existing Loan Assumption Fees").

 

(b)          Notwithstanding anything to the contrary contained herein, unless
Purchaser elects the Loan Prepayment pursuant to Section 2.4(c) below (in which
case the termination right of Purchaser set forth in this paragraph shall not be
applicable), Purchaser shall have the right to terminate this Agreement if (i)
at any time, the Existing Lender has indicated in writing that it has
disapproved or will not consent to the assumption of the Existing Loan by
Purchaser (provided that Purchaser shall deliver such termination notice to
Seller within five (5) business days of Purchaser's receipt of such written
notice); or (ii) the Existing Lender fails to approve the assumption of the
Existing Loan by Purchaser upon the terms and conditions agreed to by Purchaser,
Seller and Existing Lender as set forth in the Loan Assumption Term Sheet. If
Purchaser terminates this Agreement pursuant to this Section 2.4(b), then
neither Seller nor Purchaser shall have any further obligation under this
Agreement except for those obligations which expressly survive the termination
of this Agreement, and the Deposit shall be promptly refunded to Purchaser.
Purchaser shall provide to Seller a copy of any written notices or other
correspondence received by Purchaser from Existing Lender which indicate that
Existing Lender may not approve or consent to the assumption of the Existing
Loan by Purchaser.

 

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(c)          Purchaser may elect not to assume the Existing Loan at Closing and
remit to Seller cash in the full amount of the Purchase Price, in which case
Seller will pay the Existing Loan in full at Closing (the "Loan Prepayment");
provided, however, Purchaser shall be solely responsible for the payment of any
and all prepayment fees and other expenses (including legal fees) charged by the
Existing Lender relating to the Loan Prepayment. Purchaser shall deliver written
notice to Seller on or before the expiration of the Feasibility Period stating
whether Purchaser has chosen to assume the Existing Loan or has chosen Loan
Prepayment. If Purchaser does not provide such notice prior to the end of the
Feasibility Period, Purchaser shall be deemed to have chosen (i) Loan
Prepayment, if no Loan Assumption Term Sheet has been agreed upon and executed
by Purchaser, Seller and Existing Lender prior to the end of the Feasibility
Period, or (ii) assumption of the Existing Loan, if a Loan Assumption Term Sheet
has been agreed upon and executed by Purchaser, Seller and Existing Lender prior
to the end of the Feasibility Period. Promptly following Purchaser’s election or
deemed election not to assume the Existing Loan, Seller shall give notice of
prepayment to the Existing Lender and, subject to Purchaser's payment of the
prepayment fees and other expenses relating to the Loan Prepayment as set forth
herein, Seller shall deliver title to the Property at Closing free and clear of
any Encumbrance relating to or securing the Existing Loan. Notwithstanding
anything in this Agreement to the contrary, if the Existing Lender requires that
the Closing occur on a particular date in order to allow Loan Prepayment or
assumption of the Existing Loan, the Closing Date may be extended for up to
thirty (30) days in order to accommodate such requirement.

 

ARTICLE III

Seller's Representations, Warranties and Covenants

 

In order to induce Purchaser to enter into this Agreement and to consummate the
transactions contemplated hereby, Seller represents and warrants to, and
covenants with, Purchaser as follows, as of the Contract Date and as of the
Closing Date:

 

3.1           Good Standing. Seller is a limited liability company organized,
validly existing and in good standing under the laws of Delaware and is
qualified to do business and in good standing in the State of Texas.

 

3.2           Title. Seller has good and marketable title to the FF&E, Fixed
Asset Supplies, and Inventories, specifically excluding any Excluded Personal
Property, which shall be subject only to the Permitted Exceptions as of the
Closing Date. Seller has not previously assigned any interest in the Accounts
Receivable that shall be assigned to Purchaser pursuant to Section 13.4(a).

 

3.3           Due Authorization. Subject to obtaining the Consents, the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby have been authorized by all requisite
limited liability company actions of Seller (none of which actions have been
modified or rescinded, and all of which actions are in full force and effect).
Subject to obtaining the Consents, this Agreement constitutes a valid and
binding obligation of Seller, enforceable against Seller in accordance with its
terms.

 

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3.4           No Violations or Defaults. Seller has received no written notice
of an uncured violation or default under any agreement with any third party, or
under any judgment, order, decree, rule or regulation of any court, arbitrator,
administrative agency or other governmental authority to which it may be
subject, which violation or default will, in any one case or in the aggregate,
materially adversely affect the ownership or operation of the Property or
Seller's ability to consummate the transactions contemplated hereby. Subject to
obtaining the Consents, the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby will not
(a) violate any law or any order of any court or governmental authority with
proper jurisdiction; (b) result in a breach or default under any Space Lease or
provision of the organizational documents of Seller; (c) require any consent, or
approval or vote of any court or governmental authority or of any third person
or entity that, as of the Closing Date, has not been given or taken, and does
not remain effective; or (d) result in any Encumbrance, other than a Permitted
Exception, against the Property.

 

3.5           Bankruptcy. Seller is not the subject debtor under any federal,
state or local bankruptcy or insolvency proceeding, or any other proceeding for
dissolution, liquidation or winding up of its assets.

 

3.6           Space Leases. There are no leases, licenses, concessions or any
other agreements giving anyone other than Seller and transient hotel guests a
right to use or occupy any Property or any part thereof, except for the Space
Leases. To the actual knowledge of Seller, each of the Space Leases is in full
force and effect and there are no presently existing defaults thereunder.
Unaltered copies of each Space Lease identified on Exhibit C, to the extent in
the possession or control of Seller, Seller’s Affiliates or Manager, have been
made available to Purchaser.

 

3.7           Equipment Leases, Service Contracts and Rooms Agreements.
Unaltered copies of each of the Equipment Leases, Service Contracts and Rooms
Agreements identified on Exhibits H, B and D, respectively, to the extent in the
possession or control of Seller, Seller’s Affiliates or Manager, have been made
available to Purchaser. To the actual knowledge of Seller, each of the Equipment
Leases, Service Contracts and Rooms Agreements are in full force and effect and
there are no presently existing defaults thereunder.

 

3.8           Litigation. There are no actions, suits, arbitrations,
governmental investigations or other proceedings pending, or to Seller's actual
knowledge, threatened, against Seller or affecting the Property before any court
or governmental authority which would have a material adverse effect on (a) the
financial condition or operations of Seller or the Property or (b) Seller's
ability to enter into or perform this Agreement.

 

3.9           Compliance with Laws. Seller has received no written notice which
has not been cured stating that Seller and/or the Property are not in material
compliance with any laws, rules, regulations, health and sanitation codes,
zoning ordinances, environmental assessment and impact requirements or with the
terms of any Permits applicable to the Property.

 

3.10         Condemnation Actions. To the actual knowledge of Seller, there are
no pending or threatened condemnation actions or special assessments of any
nature with respect to the Property or any part thereof.

 

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3.1         Hazardous Materials.

 

(a)          As used herein, "Environmental Laws" shall mean all federal state
and local laws, statues, rules, codes, ordinances, regulations, orders,
judgments, decrees, binding and enforceable guidelines, policies or common law
now or hereafter in effect and in each case as amended, or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment in each case, to the extent binding, relating
to the environment, the protection of health or Hazardous Materials, including,
without limitation, the Comprehensive Environmental Response Compensation and
Liability Act, 42 USC §9601 et seq.; the Resource Conservation and Recovery Act,
42 USC §6901 et seq.; the Federal Water Pollution Control Act, 33 USC §1251 et
seq.; the Toxic Substances Control Act, 15 USC §2601 et seq.; the Clean Air Act,
42 USC §7401 et seq.; the Safe Drinking Water act, 42 USC §3803 et seq.; the Oil
Pollution Act of 1990, 33 USC §2701 et seq.; the Emergency Planning and
Community Right-to-Know Act of 1986, 42 USC §11001 et seq.; the Hazardous
Material Transportation Act, 49 USC §1801 et seq.; and the Occupational Safety
and Health Act, 29 USC §651 et seq. (to the extent it regulates occupational
exposure to Hazardous Materials); any state, local or foreign counterparts or
equivalents, in each case as amended from time to time. As used herein,
"Hazardous Materials" shall mean (i) substances that are defined or listed in,
or otherwise classified pursuant to, any applicable law or regulations as
"hazardous substances," hazardous materials," "hazardous wastes," "toxic
substances," "pollutants," "contaminants" or other similar term intended to
define, list or classify a substance by reason of such substance's ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity or "EP
toxicity", (ii) oil, petroleum or petroleum derive substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters and other
wastes associated with the exploration, development or production of crude oil,
natural gas or geothermal resources, (iii) any flammable substances or
explosives or any radioactive materials, (iv) asbestos in any form, (v)
polychlorinated biphenyls, (vi) mold, mycotoxins or microbial matter (naturally
occurring or otherwise) and (vii) infectious waste.

 

(b)          Seller has delivered to Purchaser unaltered copies of all
environmental reports for the Property in the possession or control of Seller or
any of Seller’s Affiliates (collectively, the “Environmental Reports”). Except
as set forth in the Environmental Reports, Seller has no knowledge of any
violations of any Environmental Law and Seller has not received written notice
of any uncured violation of any Environmental Law.

 

3.12         Employees.

 

(a)          No employment contracts or collective bargaining agreements exist
with respect to the Property that will subject Purchaser to a liability
therefor. Seller is not now, and has not been in the past, an employer of any
person employed at the Property.

 

(b)          To the actual knowledge of Seller, there is no strike, work
stoppage or other labor dispute relating to the operation on the Property or
threatened by any union and no application is pending or threatened for
certification of a collective bargaining agent.

 

3.13         Management and Franchise Agreements. There are no existing
management contracts or franchise agreements relating to the Property other than
the Hotel Operating Agreement, dated March 8, 2005, between Seller and the
Manager, together with all amendments thereto (the "Existing Management
Agreement"), to be terminated concurrently with the Closing.

 

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3.14         Existing Loan.

 

(a)          The documents described on Exhibit G attached hereto (the “Existing
Loan Documents”) comprise all of the Existing Loan Documents to which Seller or
any Affiliate of Seller is a party and each of such Existing Loan Documents is
in full force and effect as of date hereof. None of the Existing Loan Documents
have been modified, altered, or amended by Seller in any respect except as set
forth in the Loan Assumption Documents and/or as necessary in connection with
the transactions contemplated under this Agreement. True, complete and correct
copies of all Existing Loan Documents have been delivered to Purchaser.
"Affiliate" shall mean, with respect to a person or entity, all persons or
entities that, directly or indirectly, control, are controlled by, or under
common control with, such person or entity; or, with respect to a person or
entity, all persons or entities that, directly or indirectly, own, are owned by
or under common ownership with, such person or entity.

 

(b)          Seller has not received written notice from Existing Lender of any
uncured default by Seller of any obligation under the Existing Loan Documents.
No event has occurred during Seller's ownership of the Property that
constitutes, or after notice or the passage of time, or both, would constitute
default by Seller of an obligation under any of the Existing Loan Documents (a
"Pre-Closing Loan Default").

 

(c)          The Existing Loan is not currently in special servicing, and Seller
has not received notice from Existing Lender that the Existing Loan is to be
transferred to a special servicer.

 

3.15         Terrorist Organizations List. Seller is not acting, directly or
indirectly, for on or behalf of any Person named by the United States Treasury
Department as a Specifically Designated National and Blocked Person, or for or
on behalf of any Person designated in Executive Order 13224 as a Person who
commits, threatens to commit, or supports terrorism. Seller is not engaged in
the transaction contemplated by this Agreement directly or indirectly on behalf
of, or facilitating such transaction directly or indirectly on behalf of, any
such Person. "Person" shall mean any natural person, corporation, general or
limited partnership, limited liability company, association, joint venture,
trust, estate, governmental authority or other legal entity, in each case
whether in its own or a representative capacity.

 

3.16         Financial Information. Seller has made available, or within five
(5) days of Contract Date, shall make available to Purchaser unaltered copies of
the year-to-date monthly financial statements and annual audited financial
statements for calendar years 2011, 2012 and 2013 with respect to the Property,
to the extent in the possession or control of Seller, Seller’s Affiliates or
Manager; provided, however, that Seller makes no representation or warranty as
to the accuracy or completeness of any such financial statements.

 

3.17         Certain Limitations on Seller's Representations and Warranties. The
representations and warranties of Seller set forth in this Article III are
subject to the following express limitations:

 

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(a)          The term "to Seller's actual knowledge," or "to the actual
knowledge of Seller," or words of similar import shall mean the actual present
knowledge of Mr. Jeff Burns, after due inquiry of the general manager of the
Property.

 

(b)          The expiration, amendment or termination of any Space Lease,
Equipment Lease, Rooms Agreement or Service Contract by its terms or pursuant to
Section 6.1 of this Agreement shall not affect the obligations of Purchaser
hereunder or render any representation or warranty of Sellers untrue; and

 

(c)          Seller's liability shall be limited as set forth in Section 14.7.

 

(d)          With respect to Sections 3.6, 3.7 and 3.16, Seller shall request
from Manager current copies of the Space Leases, Equipment Leases, Service
Contracts, Rooms Agreements and Property financial statements. Seller shall
deliver to Purchaser copies of any of the foregoing documents provided by
Manager; provided, however, that Seller shall not be in default of this
Agreement if any of the documents provided by Manager are incomplete or
inaccurate and Seller has no knowledge of such incompleteness or inaccuracy.

 

ARTICLE IV

 

Purchaser's Representations, Warranties and Covenants

 

In order to induce Seller to enter into this Agreement and to consummate the
transactions contemplated hereby, Purchaser represents and warrants to, and
covenants with, Seller as follows, as of the Contract Date and as of the Closing
Date:

 

4.1           Good Standing. Purchaser is a limited liability company organized,
validly existing and in good standing under the laws of Delaware and is, or as
of the Closing Date shall be, qualified to do business in Texas.

 

4.2           Due Authorization. Subject to obtaining approval of the Investment
Committee of Thayer Hotel Investors VI LLC and Advisory Board of Thayer Hotel
Investors VI Feeder LP, which Purchaser shall obtain, if at all, prior to the
expiration of the Feasibility Period, the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby have
been authorized by all requisite limited liability company actions of Purchaser
(none of which actions have been modified or rescinded, and all of which actions
are in full force and effect). Subject to obtaining approval of the Investment
Committee of Thayer Hotel Investors VI LLC and Advisory Board of Thayer Hotel
Investors VI Feeder LP, which Purchaser shall obtain, if at all, prior to the
expiration of the Feasibility Period, this Agreement constitutes a valid and
binding obligation of Purchaser, enforceable against Purchaser in accordance
with its terms. Purchaser's failure to deliver a Termination Notice prior to the
expiration of the Feasibility Period shall be deemed Purchaser's representation
that Purchaser has obtained approval of the Investment Committee of Thayer Hotel
Investors VI LLC and Advisory Board of Thayer Hotel Investors VI Feeder LP, and
that the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been authorized by all
requisite limited liability company actions of Purchaser (none of which actions
have been modified or rescinded, and all of which actions are in force and
effect).

 

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4.3           Litigation. There are no actions, suits, arbitrations,
proceedings, governmental investigations or other proceedings that are pending,
or to Purchaser's knowledge, threatened, against Purchaser that would materially
and adversely affect its ability to enter into, or perform its obligations
under, this Agreement.

 

4.4           Terrorist Organizations List. Purchaser is not acting, directly or
indirectly, for on or behalf of any Person named by the United States Treasury
Department as a Specifically Designated National and Blocked Person, or for or
on behalf of any Person designated in Executive Order 13224 as a Person who
commits, threatens to commit, or supports terrorism. Purchaser is not engaged in
the transaction contemplated by this Agreement directly or indirectly on behalf
of, or facilitating such transaction directly or indirectly on behalf of, any
such Person.

 

4.5           Bankruptcy. Purchaser is not the subject debtor under any federal,
state or local bankruptcy or insolvency proceeding, or any other proceeding for
dissolution, liquidation or winding up of its assets.

 

ARTICLE V

 

Closing

 

5.1           Closing. The consummation of the purchase and sale of the Property
as contemplated by this Agreement (the "Closing") shall take place on the date
that is thirty (30) days following the last day of the Feasibility Period (the
"Closing Date"). The Closing shall be conducted as an "escrow closing" which
shall take place at the office of the Escrow Agent without either party being
present. The parties shall deliver to Escrow Agent, in escrow, on or before the
Closing Date, all of Seller's and Purchaser's deliveries, the cash payment of
the Purchase Price and sufficient additional cash necessary for the parties to
pay the costs contemplated by Section 5.2 and there shall be no requirement that
the parties attend a formal settlement. All transactions at the Closing shall be
interdependent and are to be considered simultaneous, so that none are effective
until all are effective.

 

5.2           Costs. Seller shall pay all transfer taxes and fees and any bulk
sales taxes and other personal property taxes associated with the Closing.
Purchaser shall pay for title insurance and the survey. Seller and Purchaser
shall aggregate and split in accordance with local custom all recording taxes
and fees and all fees of the Escrow Agent in connection with the Closing.
Purchaser shall pay either (i) the Existing Loan Assumption Fees and all other
fees associated with the assumption of the Existing Loan, including without
limitation the Existing Lender's title insurance costs or (ii) all prepayment
fees and other expenses (including the Existing Lender's legal fees) relating to
the Loan Prepayment, as the case may be. Purchaser shall pay the amount of the
Management Termination Fee, as described in Section 6.12. Each party shall pay
its own attorneys' fees incurred in connection with this transaction.

 

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ARTICLE VI

 

Actions Pending Closing

 

6.1           Conduct of Business; Maintenance and Operation of Property.

 

(a)          Between the Contract Date and the Closing Date, Seller shall carry
on the business of the Property as a full-service hotel in the ordinary course
and in a good and diligent manner consistent with prior practice. Seller shall
cause the Property to be maintained in its present order and condition, normal
wear and tear excepted, and subject to any casualty, which shall be governed by
Article XII, and shall cause the continuation of the normal operation thereof,
including the purchase and replacement of supplies and equipment, the
maintenance of its beneficial relations with guests, suppliers and others having
business dealings with the Seller and the continuation of the normal practice
with respect to maintenance and repairs so that the Property shall, except for
normal wear and tear and subject to any casualty, be in substantially the same
condition on the Closing Date as on the Contract Date. Seller shall not remove
or permit to be removed any Personal Property except in the ordinary course of
business or as necessary for repairs or replacements of worn out or obsolete
items. Seller shall pay or shall cause to be paid all tax amounts due for the
Property for the period prior to Closing.

 

(b)          Notwithstanding the foregoing to the contrary, Purchaser
acknowledges that Seller has been working with Chef John Tesar and his
affiliated entity, J Tesar LLC dba Tesar Restaurant Group ("Tesar Entity") on a
concept to convert the existing restaurant at the Real Property, Central 214, to
a modern steakhouse concept to be known as Knife (the "Restaurant Conversion").
Seller shall be responsible for certain capital expenditures related to the
Restaurant Conversion, which shall include (i) those items listed on Schedule
6.1(b) attached hereto, and (ii) such other items as agreed upon in writing by
Purchaser and Seller during the Feasibility Period. At Closing, Purchaser shall
assume the consulting agreement with Tesar Entity (which agreement shall be
provided within five (5) days of the Contract Date, the "Consulting Agreement"),
on terms mutually agreed upon by Seller and Purchaser.

 

6.2           Title.

 

(a)          Purchaser shall obtain a binding commitment for an owner's policy
of title insurance to be issued by First American Title Insurance Company or
other nationally recognized, financially sound title insurance company
acceptable to Purchaser and Seller (the "Title Company") to Purchaser on the
Form T-1 Owner's Policy of Title Insurance (the "Title Commitment"), committing
to insure Purchaser's good and indefeasible fee simple title to the Real
Property. The title policy to be issued pursuant to the Title Commitment (the
"Title Policy") shall be in an amount at least equal to the portion of the
Purchase Price allocable to the value of the Real Property, as shown in
Exhibit E. The Title Policy shall show no liens, mortgages, deeds of trust,
security interests, pledges, charges, options, encroachments, easements,
covenants, leases, reservations or restrictions of any kind (the "Encumbrances")
other than: (i) if Purchaser elects to assume the Existing Loan, the lien(s)
evidencing and securing the Existing Loan; (ii) applicable zoning regulations
and ordinances; (iii) liens for taxes, assessments, and governmental charges not
yet due and payable; and (iv) the Permitted Exceptions.

 

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(b)          Purchaser agrees to notify Seller in writing (the "Title Objection
Notice") of any objections to exceptions appearing in the Title Commitment no
later than ten (10) days prior to the expiration of the Feasibility Period.
Within five (5) days following the Title Objection Notice, Seller shall notify
Purchaser either that it will eliminate some or all exceptions to which
Purchaser has objected prior to the Closing Date or stating that it will not
eliminate any such exceptions. If Seller does not respond in such five (5) day
period, Seller shall be deemed to have notified Purchaser that Seller will not
eliminate any of the objections set forth on Purchaser's Title Objection Notice.
If Seller elects not to remove all exceptions to title to which Purchaser has
objected, Purchaser may terminate this Agreement in its sole discretion prior to
the end of the Feasibility Period and receive a return of the Deposit. If
Purchaser does not so terminate this Agreement, all exceptions shown on the
Title Commitment other than those that Seller has affirmatively agreed to remove
shall be deemed "Permitted Exceptions".

 

(c)          In the event that any updated Title Commitment provided to
Purchaser after the expiration of the Feasibility Period shows any material
exceptions that were not included on the original Title Commitment, Purchaser
shall have a period of five (5) days following receipt of such update to deliver
to Seller a Title Objection Notice with respect to such update. Within five (5)
days following such Title Objection Notice, Seller shall notify Purchaser either
that it will eliminate some or all of the new exceptions to which Purchaser has
objected prior to the Closing Date or stating that it will not eliminate any
such exceptions. If Seller does not respond in such five (5) day period, Seller
shall be deemed to have notified Purchaser that Seller will not eliminate any of
the objections set forth on Purchaser's Title Objection Notice. If Seller elects
not to remove all exceptions to title to which Purchaser has objected, Purchaser
may terminate this Agreement in its sole discretion on or before the date that
is five (5) days after Seller's response to Purchaser's Title Objection Notice
(or if Seller does not respond, the date that is ten (10) days after delivery of
Purchaser's Title Objection Notice), and receive a return of the Deposit. If
Purchaser does not so terminate this Agreement, all exceptions shown on any
update to the Title Commitment other than those that Seller has affirmatively
agreed to remove shall also be deemed "Permitted Exceptions".

 

(d)          The Title Policy may include such additional endorsements as
Purchaser reasonably may request, including without limitation, Access,
Contiguity, Minerals and Surface Damage, Restrictions, Encroachments and
Minerals, and Deletion of Arbitration endorsements, to the extent the Title
Company has agreed to issue such endorsements to Purchaser prior to the
expiration of the Feasibility Period; provided, however, that obtaining any
endorsements or extended coverage (including without limitation limiting the
standard exception for "any discrepancies, conflicts or shortages in area or
boundary lines, or any encroachments or protrusions, or any overlapping of
improvements" to "shortages in area" only) shall not be a condition precedent to
Purchaser's obligation to close.

 

6.3           Survey. Seller shall cooperate with Purchaser in obtaining an
as-built survey of the Property, prepared in conformity with current American
Land Title Association/American Congress on Surveying and Mapping standards for
"Class-A" surveys and certified to Purchaser, the Existing Lender and the Title
Company by a duly licensed land surveyor or professional engineer. Any
objections to the survey shall be addressed in Purchaser's Title Objection
Notice, and shall be deemed waived if Purchaser does not terminate this
Agreement prior to the expiration of the Feasibility Period.

 

6.4           Cooperation. Seller shall cooperate reasonably, at no cost to
Seller, with Purchaser in securing the transfer or issuance of any permits or
licenses, including, without limitation, a liquor license which is held by KHRG
Texas Holdings, Inc. an affiliate of Manager ("Liquor Entity"), necessary to
permit the lawful, continuous operation of the Property by Purchaser immediately
following the Closing Date.

 

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6.5           Service Contracts; Equipment Leases; Space Leases. Between the
Contract Date and the Closing Date, Seller shall not renew, extend or modify any
Service Contract, Equipment Lease or Space Lease or enter into any new such
agreements that would survive the Closing Date other than in the ordinary course
of business, without Purchaser's prior written consent in each instance (which
consent shall not be withheld or delayed unreasonably). Notwithstanding the
foregoing, the parties acknowledge that Seller has entered into a letter of
intent dated January 31, 2014, which has been previously reviewed by Purchaser,
for the lease of the former Brackets space at the Real Property (the "Brackets
Lease"). Seller shall (i) provide Purchaser with all material information in
Seller's possession regarding the negotiation of the proposed Brackets Lease,
(ii) within three (3) days after the Contract Date introduce Purchaser to the
proposed tenant thereunder, and (iii) permit Purchaser to lead and initiate all
subsequent discussions with said proposed tenant. Seller and Purchaser shall use
commercially reasonable efforts to obtain the proposed tenant's signature, prior
to Closing, on the Brackets Lease (in a commercially reasonable form acceptable
to Purchaser, which lease document will provide that the Brackets Lease will
only be effective upon the occurrence of the Closing). All of Seller's interest
in and to the Brackets Lease shall be assigned to and assumed by Purchaser as of
the Closing. The amount of Six Hundred Thousand and No/100ths Dollars
($600,000.00) (the "Brackets TI/LC Amount"), is currently held by Existing
Lender in a reserve account pursuant to the Existing Loan. If the Existing Loan
is assumed by Purchaser, the Brackets TI/LC Amount shall be assigned to
Purchaser as of the Closing (to be disbursed by Existing Lender pursuant to the
Existing Loan Documents, as amended by those loan documents executed in
connection with the assignment and assumption of the Existing Loan), and if
Purchaser chooses the Loan Prepayment, Purchaser shall instead be credited the
amount of the Brackets TI/LC Amount at Closing.

 

6.6           Liquor License. Promptly following the expiration of the
Feasibility Period, Purchaser shall make an application to the appropriate
governmental authorities to have a new liquor license issued in the name of
Purchaser or an entity designated by Purchaser in compliance with local law, and
Seller shall reasonably cooperate with Purchaser in this regard, at Purchaser's
sole cost and expense. Purchaser shall use all reasonable efforts, at its sole
cost and expense, to obtain the approval of applicable authorities for the
issuance of a new liquor license prior to, or contemporaneously with, the
Closing. If such issuance has not been approved by the Closing Date, Seller
agrees to use commercially reasonable efforts to cause Liquor Entity to execute
such documents as are legal and customary to permit the continued sale of
alcoholic beverages for up to ninety (90) days after the Closing pending such
approval. In such event, Purchaser shall maintain liquor liability insurance in
amounts currently maintained by Liquor Entity naming Liquor Entity and Seller as
additional insureds, and Purchaser further agrees to indemnify, defend and hold
Liquor Entity and Seller harmless from and against any liability, cost or
expense arising out of Liquor Entity's cooperation with Purchaser during such
interim period. The provisions of this Section 6.6 shall survive the Closing.

 

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6.7           Inspection.

 

(a)          Purchaser acknowledges that since April 10, 2014, Purchaser has
been given certain access to the Property at its own risk, cost and expense and
has been permitted to enter, or cause its representatives, engineers,
contractors, consultants, agents, officers or employees ("Purchaser
Representatives") to enter upon the Property for the purpose of making surveys
or other tests, inspections, investigations and/or studies of the Property
("Purchaser Investigations"). Purchaser shall continue to have the right, upon
no less than two full (2) business days' notice to Seller, at its own risk, cost
and expense and at any date or dates prior to Closing, to enter, or cause its
agents or representatives to enter, upon the Property for the Purchaser
Investigations. Purchaser's written notice (which may be by email) shall specify
the intended date of entry and shall provide a detailed description of the
proposed Purchaser Investigations, including, without limitation, a list of
contractors who will be performing the proposed Purchaser Investigation, a copy,
if applicable, of the Purchaser’s testing plan and such other information as
Seller reasonably requires in connection with such proposed Purchaser
Investigation. Purchaser shall not conduct any test or investigation involving
physical disturbance, sampling or invasive testing of any portion of the
Property without Seller's prior written approval, which may be withheld or
conditioned in Seller's sole and absolute discretion. Neither Purchaser nor any
Purchaser Representatives shall enter the Property until Seller has given
written approval (which may be by email) of both the request and any testing
plan. In addition, and subject to this Section 6.7, Purchaser may conduct such
architectural, environmental, engineering, economic and other non-invasive
studies of the Property as Purchaser may, in its sole discretion, deem
desirable. Purchaser shall not make any physical alterations to the Property,
and all such entry shall be conducted during normal business hours of the
Property and shall not unreasonably interfere with the use, occupation or
operation of the Property, and Purchaser shall indemnify, defend and hold Seller
harmless from any cost, claim, liability or expense incurred in connection
therewith, except that Purchaser's obligations as set forth in this sentence
shall not extend to previously existing conditions that are discovered by
Purchaser to be present on, under or about the Property unless exacerbated by
Purchaser's Investigations. Purchaser shall have reasonable access to all
documentation, agreements and other information in the possession of Seller or
Seller's agents related to the Property, all of which shall be without
representation or warranty of any kind except as expressly set forth in this
Agreement or in any of the Closing documents, and Purchaser shall have the right
to make copies of same, including, without limitation, the Existing Loan
Documents and those documents listed on Exhibit J attached hereto (the "Due
Diligence Materials"), but specifically excluding any internal memoranda and
attorney-client privileged documents. Unaltered copies of the Due Diligence
Materials shall be delivered to Purchaser upon execution of this Agreement. A
representative of Seller shall have the right, but not the obligation, to be
present during any Purchaser Investigation. Purchaser shall, at its own expense,
promptly fill and compact any holes, and otherwise restore any damage to the
Property related to the Purchaser Investigations. Upon Purchaser’s completion of
Purchaser Investigations, Purchaser shall be responsible for returning the
Property to substantially the condition existing prior to Purchaser’s entry.
Neither Purchaser nor any Purchaser Representative shall damage any part of the
Property or any personal property owned or held by any tenant, occupant or guest
of the Real Property. If Purchaser elects to terminate this Agreement pursuant
to Section 6.8(b), Purchaser agrees to supply Seller with the results of any
tests, studies or inspections of the Property performed pursuant to this Section
6.7 (the "Purchaser Reports"); provided, however, that Purchaser shall not be
required to provide Seller with any Purchaser Reports to the extent the same (i)
are legally privileged or constitute attorney work product, (ii) are subject to
a confidentiality agreement or to applicable law prohibiting their disclosure by
Purchaser, or (iii) constitute confidential internal assessments, reports,
financial analysis, studies, memoranda, notes or other correspondence prepared
by or on behalf of any officer, employee, lawyer or accountant of Purchaser in
connection with Purchaser’s due diligence investigations. Seller acknowledges
that the delivery of any such Purchaser Reports shall be without warranty or
representation whatsoever other than that such materials have been fully paid
for and may be delivered to Seller.

 

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(b)          Except as otherwise set forth in Section 6.10, Purchaser shall not
purposefully contact any Property tenant, employee, guest, or invitee without
Seller’s prior written consent, and Seller or its designated representative
shall have the right to be present (whether telephonically or in person, as
determined by Seller) during any conversations between Purchaser and any such
person.

 

(c)          Before and during Purchaser Investigations, Purchaser and each
Purchaser Representative conducting any Purchaser Investigation shall maintain
workers’ compensation insurance in accordance with applicable law, and
Purchaser, or the applicable Purchaser Representative conducting any Purchaser
Investigation, shall maintain commercial general liability insurance with limits
of at least Two Million Dollars ($2,000,000.00) combined single limit for
personal injury and property damage per occurrence. Purchaser shall deliver to
Seller evidence of such workers’ compensation insurance and a certificate
evidencing the commercial general liability and property damage insurance before
conducting any Purchaser Investigation on the Property. Each such insurance
policy shall be written by a reputable insurance company having a rating of at
least "A+:VII" by Best’s Rating Guide (or a comparable rating by a successor
rating service), and shall otherwise be subject to Seller’s prior reasonable
approval. Such insurance policies shall name as additional insureds Seller,
Manager, and such other parties holding insurable interests as Seller may
designate.

 

(d)          Purchaser agrees that information gathered in connection with this
Agreement, including without limitation the results of the Purchaser
Investigations (including those Purchaser Investigations undertaken prior to the
Contract Date) and the Due Diligence Materials that is not generally known to
the public (the "Confidential Information") shall be considered to be
confidential, and such Confidential Information shall be used by Purchaser and
Purchaser Representatives solely for the purpose of Purchaser’s evaluation of
the physical and environmental condition of the Property and evaluation of the
transaction. Purchaser shall use commercially reasonable efforts not to reveal,
disclose, disseminate, publish or communicate to any other persons, parties or
entities any Confidential Information, without the prior written consent of
Seller, which shall be given or withheld in Seller’s sole, but reasonable,
discretion, other than to Purchaser’s partners, employees, consultants,
attorneys, engineers, prospective investors, and lenders involved in this
transaction who are responsible for determining the feasibility of Purchaser’s
acquisition of the Property and who have agreed to preserve the confidentiality
of such information as required hereby (collectively, "Permitted Outside
Parties"). Purchaser shall be responsible for ensuring that any and all
Purchaser Representatives and Permitted Outside Parties (and any other person
for whom Purchaser has responsibility hereunder) complies with the provisions of
this Section 6.7(d) except in connection with a court order, other legal process
or if necessary to comply with any reporting requirements mandated by law. In
permitting Purchaser and the Permitted Outside Parties to review the Due
Diligence Materials or any other Confidential Information, Seller has not waived
any privilege or claim of confidentiality with respect thereto, and no third
party benefits or relationships of any kind, either express or implied, have
been offered, intended or created. The provisions of this Section 6.7(d) shall
survive the termination of this Agreement in accordance with Section 14.1(a)
below. Purchaser shall also promptly notify Seller in writing of requests for
Confidential Information from any third party or regulatory agency.

 

15

 

 

(e)          Purchaser shall indemnify, defend and hold Seller, Seller’s asset
management company, Seller’s property management company, and their respective
affiliates, partners, shareholders, officers, managers, members, directors,
agents and employees (the "Seller Investigation Indemnified Parties") harmless
from any and all losses, costs, liens, claims, causes of action, liability,
damages, expenses and liability (including, without limitation, court costs and
reasonable attorneys’ fees) (all of the foregoing, collectively, "Investigation
Claims") incurred in connection with or arising in any way from (i) any
Purchaser Investigation conducted by Purchaser and/or any Purchaser
Representative, (ii) any entry onto the Real Property by Purchaser or any
Purchaser Representative in connection with a Purchaser Investigation; or
(iii) any breach by Purchaser and/or any Purchaser Representative of the terms
of this Section 6.7, other than Investigation Claims resulting from the gross
negligence or willful misconduct of any Seller Investigation Indemnified Party.
This indemnity provision shall survive termination or expiration of this
Agreement.

 

6.8           Feasibility Period.

 

(a)          Seller has disclosed to Purchaser that the limited liability
company operating agreement of Seller requires that the manager of Seller notify
all members of the proposed sale, and permit any member that does not approve
the sale an opportunity to purchase the interest in the Seller owned by the
other member(s) and/or the Property. Seller shall commence the process of
obtaining all members' consent to the sale (the "Consents") no later than one
(1) business day following the Contract Date. If Seller has not delivered to
Purchaser written notice that Seller has obtained all necessary Consents (the
“Consent Notice”) by the date that is fifteen (15) business days following the
Contract Date (the “Consent Notice Deadline”), then Seller may terminate this
Agreement by delivering written notice to Purchaser and the Escrow Agent (the
“Consent Termination Notice”) within one (1) business day following the Consent
Notice Deadline. The Consent Notice, if any, shall contain evidence reasonably
satisfactory to Purchaser and the Title Company that the Consents have been
received. If Seller terminates this Agreement by delivering the Consent
Termination Notice to Purchaser and the Escrow Agent in a timely manner, then
the Deposit shall be returned immediately to Purchaser, and neither party shall
have any obligations hereunder except for those which expressly survive
termination. If Seller does not timely deliver the Consent Termination Notice,
Seller’s right to terminate this Agreement pursuant to this Section 6.8(a) shall
be deemed to have been waived, this Agreement shall remain in full force and
effect, and Seller shall be obligated to deliver evidence reasonably
satisfactory to Purchaser and the Title Company of the Consents prior to
Closing.

 

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(b)          If, during the period between the Contract Date and the date that
is 5:00 p.m. Dallas, Texas time on the date which is thirty (30) days after the
date that the Consent Notice is delivered to Purchaser (the "Feasibility
Period"), Purchaser gives Seller written notification (the "Termination Notice")
that Purchaser elects not to consummate the purchase of the Property in
accordance with the terms of this Agreement, this Agreement shall terminate, the
Deposit shall be returned immediately to Purchaser and neither party shall have
any obligations hereunder except for those which expressly survive termination.
The Purchaser shall have the absolute right, in its sole discretion, to
determine whether to give the Termination Notice. If Purchaser elects not to
give the Termination Notice prior to the expiration of the Feasibility Period,
Purchaser's right to terminate this Agreement pursuant to this Section 6.8(b)
shall be deemed to have been waived, this Agreement shall remain in full force
and effect, and the Deposit shall become non-refundable except as specifically
set forth herein.

 

(c)          Prior to the expiration of the Feasibility Period, Purchaser shall
notify Seller of any Service Contracts, Space Leases, Equipment Leases and/or
Rooms Agreements that Purchaser requests that Seller terminate, each of which
shall be terminated at or prior to Closing (collectively, the "Excluded
Contracts"). Purchaser shall be responsible for any fees or penalties in
connection with the Excluded Contracts; provided, however, that Seller shall be
obligated to terminate any Service Contract, Space Lease, Equipment Lease and/or
Rooms Agreement that is not assignable by its terms and shall be responsible for
any fees or penalties in connection therewith.

 

6.9           Existing Loan. Prior to Closing, Seller shall perform its
obligations under the Existing Loan Documents (which shall include, without
limitation, all monetary obligations). Except for any amendments or
modifications to the Existing Loan Documents relating to Purchaser's assumption
of the Existing Loan as contemplated hereunder, Seller shall not amend, modify
or terminate any of the Existing Loan Documents without Purchaser's prior
written consent, which consent may be withheld in Purchaser's sole and absolute
discretion. Seller shall promptly deliver to Purchaser copies of any notices
received by Seller from Existing Lender or delivered by Seller to Existing
Lender under the Existing Loan Documents during the term of this Agreement,
provided, that, the same do not include any confidential or proprietary
information relating to Seller or any of Seller's Affiliates.

 

6.10         WARN Act.

 

(a)          Neither Seller nor Manager shall give any termination notices under
the Worker Adjustment and Retraining Notification Act (collectively with any
similar applicable state or local laws, the "WARN Act") to any Hotel Employees
or any governmental authorities. All employees of the Manager allocated to the
Property (the "Hotel Employees") shall have their employment at the Property
terminated as of the Closing Date and all wages, commissions, withholding,
contributions and other employment benefits will have been properly paid and
accounted for by Manager; provided, however, that Purchaser may hire the Hotel
Employees (the "Continuing Employees"), on such terms and conditions as they may
agree, following termination of their employment by Manager. Notwithstanding
anything to the contrary contained herein, concurrently with the Closing,
Purchaser shall cause its replacement manager to offer to hire a sufficient
number of Hotel Employees on terms sufficient to avoid applicability of the WARN
Act and shall continue to employ a sufficient number of Continuing Employees for
a sufficient period of time to avoid application of the WARN Act. If Purchaser
shall fail to comply with the provisions of this Section 6.10(a), Purchaser
shall indemnify, defend and hold harmless the Seller Indemnitees from and
against any and all liabilities, losses, costs, damages and expenses (including,
without limitation, reasonable attorneys' fees) that may be incurred by, or
asserted against, any such Seller Indemnitee arising out of or relating to the
failure to give a termination notice under the WARN Act to the Hotel Employees
or to any governmental authorities. This Section 6.10(a) shall survive the
Closing.

 

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(b)          Seller hereby grants Purchaser the right, but not the obligation,
to have its replacement manager begin interviewing employees of Seller at the
Property following expiration of the Feasibility Period so that such replacement
manager can determine which of the Hotel Employees Purchaser’s replacement
manager intends to rehire. Notwithstanding the foregoing, if this Agreement is
not terminated by Seller prior to the Consent Termination Deadline, Purchaser
and/or its representative thereafter may interview the general manager, director
of finance/controller, director of human resources, director of revenue
management, director of sales and marketing and food and beverage general
manager, provided that Seller is given at least two (2) business days' prior
written notice (which may be by email) and the opportunity to have a
representative present.

 

6.11         Tax Clearance Certificate. Purchaser may, at Purchaser's option,
request a tax clearance certificate issued by the local taxing authority having
jurisdiction over the Property, in order to determine whether all sales and use
taxes for the Property have been paid to date. Seller shall reasonably cooperate
with such request (which may be fulfilled by making a written request to Manager
to cooperate with such request, if applicable) at no cost to Seller.

 

6.12         Termination of Manager. Seller shall obtain an acknowledgement from
Manager (a) setting forth the amount of the termination fee required to be paid
to Manager in connection with the termination of the Existing Management
Agreement (the “Management Termination Fee”), (b) acknowledging that upon
receipt of the Management Termination Fee, effective as of the Cut-Off Time, the
Existing Management Agreement shall be terminated and Manager shall thereafter
have no rights or claims against the Purchaser or the Property arising out of or
relating to the Existing Management Agreement or its termination, and (c)
agreeing to enter into, or cause Liquor Entity to enter into, an interim
beverage agreement with Purchaser or Purchaser's designee necessary to permit
the continued sale of alcoholic beverage at the Property in accordance with
Section 10.3.3 of the Existing Management Agreement (the “Manager
Acknowledgment”).

 

ARTICLE VII

 

Purchaser's Conditions Precedent to Closing

 

It shall be an express precondition to Purchaser's obligation to purchase the
Property that each and every one of the following conditions shall have been
satisfied as of the Closing Date (or waived by Purchaser).

 

7.1           Representations and Warranties. Each of Seller's representations
and warranties shall be true and accurate in all material respects as if made on
and as of the Closing Date.

 

7.2           Covenants of Seller. All actions Seller covenants herein to take
shall have been completed.

 

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7.3           Termination of Existing Management Agreement. The Management
Agreement shall have been terminated; provided, however, that Seller shall
receive a credit at Closing from Purchaser for the Management Termination Fee to
the extent set forth in the Manager Acknowledgment. On the Closing Date, there
shall be no contract or agreement in effect between Seller and any third party
for management of the Property after the Closing Date. There shall be no fees,
payments, commissions or other sums due and owing in connection with management
of the Property under the Existing Management Agreement or any other management
agreement for the period prior to the Closing Date, except to the extent to be
paid by Seller following Closing in the ordinary course of business.

 

7.4           Title. Purchaser shall be able to obtain a policy of title
insurance in conformance with the Title Commitment, subject only to the
Permitted Exceptions.

 

7.5           Approval of Assumption of Existing Loan. Unless Purchaser has
elected, in a timely manner, to prepay rather than assume the Existing Loan
pursuant to Section 2.4(c), the Existing Lender shall have delivered loan
assumption documents for Purchaser's proposed assumption of the Existing Loan
consistent with the terms and conditions set forth in the Loan Assumption Term
Sheet (the "Loan Assumption Documents").

 

7.6           Failure of Condition. In the event of the failure of any condition
precedent set forth above, Purchaser, at its sole election, may (a) terminate
this Agreement (and receive a return of the Deposit); (b) waive the condition
and proceed to Closing; (c) with respect to a failure of the condition set forth
in Section 7.5 only, extend the Closing Date for up to an additional ten (10)
days; or (d) if such failure arises from Seller's breach of this Agreement,
avail itself of any remedies provided in Section 10.2.

 

ARTICLE VIII

 

Seller's Conditions Precedent to Closing

 

It shall be an express precondition to Seller's obligation to convey the
Property that each and every one of the following conditions shall have been
satisfied as of the Closing Date (or waived by Seller).

 

8.1           Representations and Warranties. Each of Purchaser's
representations and warranties shall be true and accurate in all material
respects as if made on and as of the Closing Date.

 

8.2           Covenants of Purchaser. All actions Purchaser covenants herein to
take shall have been completed.

 

8.3           Purchase Price. Purchaser shall be able to deliver the Purchase
Price to the Escrow Agent.

 

8.4           Approval of Assumption of Existing Loan. If Purchaser is assuming
the Existing Loan, the Existing Lender shall have delivered Loan Assumption
Documents containing a release as approved by Seller pursuant to Section 2.4(a).

 

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8.5           Failure of Condition. In the event of the failure of any condition
precedent set forth above, Seller, at its sole election, may (a) terminate this
Agreement (and the Deposit shall be returned to Purchaser); (b) waive the
condition and proceed to Closing; (c) with respect to a failure of the condition
set forth in Section 8.4 only, extend the Closing Date for up to an additional
ten (10) days; or (d) if such failure arises from Purchaser's breach of this
Agreement, avail itself of any remedies provided in Section 10.1.

 

ARTICLE IX

 

Closing Deliveries

 

9.1           Deed. Seller shall deliver a special warranty deed in recordable
form in the form attached hereto as Exhibit K, conveying Seller's fee simple
interest in the Real Property (the "Deed"), dated as of the Closing Date, free
of all encumbrances other than the Permitted Exceptions conveying to Purchaser
fee simple interest in the Real Property as required hereunder.

 

9.2           Bill of Sale. Seller and Purchaser shall deliver a bill of sale,
dated as of the Closing Date, conveying to Purchaser the Personal Property, but
specifically excluding the Excluded Personal Property, in the form attached
hereto as Exhibit L.

 

9.3           Assignment of Permits and Licenses. Seller and Purchaser shall
deliver an assignment of all existing permits and licenses relating to the
Property if and to the extent assignable to Purchaser, in the form attached
hereto as Exhibit M.

 

9.4           Assignment of Service Contracts, Rooms Agreements and Equipment
Leases. Seller and Purchaser shall deliver an assignment of all Service
Contracts, Rooms Agreements and Equipment Leases (but specifically excluding any
Excluded Contracts), in the form attached hereto as Exhibit N, which Purchaser
shall assume from and after Closing.

 

9.5           FIRPTA Certificate. Seller shall deliver a certificate, dated as
of the Closing Date, to establish that Seller is not a foreign person for the
purposes of the Foreign Investors in Real Property Tax Act.

 

9.6           Assignment of Space Leases and Brackets Lease. Seller and
Purchaser shall deliver an assignment of the Space Leases and any interest of
Seller in the proposed Brackets Lease (but specifically excluding any Excluded
Contracts), in the form attached hereto as Exhibit O, which Purchaser shall
assume from and after Closing.

 

9.7           Assignment of Consulting Agreement. Seller and Purchaser shall
deliver an assignment of the Consulting Agreement, duly executed by an
authorized signatory of Tesar Entity, in the form attached hereto as Exhibit P
or such other form as may be agreed upon by Purchaser, Seller and Tesar Entity
during the Feasibility Period, which Purchaser shall assume from and after
Closing.

 

9.8           Closing Statement. Seller and Purchaser shall each deliver a
counterpart of the closing and apportionment statement agreed to by Seller and
Purchaser which reflects all adjustments to the Purchase Price contemplated by
this Agreement (the "Closing Statement").

 

20

 

 

9.9           Loan Assumption Documents. If Purchaser is assuming the Existing
Loan, each of Seller and Purchaser shall deliver the Loan Assumption Documents
to which each is a party, each duly executed and acknowledged by Seller,
Purchaser and Existing Lender (where appropriate).

 

9.10         Termination of Excluded Contracts. Seller shall deliver
satisfactory evidence of Seller’s or Manager’s, as the case may be, termination
or notice of termination of the Excluded Contracts effective as of, or to be
effective promptly after, the Closing Date.

 

9.11         Assignment of Declarant's Rights. Seller shall deliver to Purchaser
an executed and acknowledged assignment of its rights as declarant in recordable
form pursuant to the Master Condominium Declaration for M Central Master
Condominium, recorded in the Official Records of Dallas County on September 16,
2005, as Document No. 3511362.

 

9.12         Resignation of Directors. Seller shall deliver to Purchaser
satisfactory evidence of the resignation of each of the four (4) directors
elected or appointed by Seller as the “Class A Member” pursuant to the Bylaws of
the M Central Master Condominium Association, Inc.

 

9.13         Estoppels. Seller shall deliver estoppel certificates, in form
approved by Purchaser, from Exhale Enterprises VIII, Inc., DD+JJ Productions,
LLC, M Central Master Condominium Association, Inc. and from M Central
Residences Condominium Association, Inc. Seller shall also deliver any other
estoppel certificates in its possession or control as of the Closing Date.

 

9.14         Termination of Existing Management Agreement. Seller shall deliver,
or shall cause Manager to deliver, the Manager Acknowledgment.

 

9.15         Consents. Seller shall deliver evidence reasonably satisfactory to
Purchaser and the Title Company that the Consents have been obtained.

 

9.16         Original Documents. Seller shall deliver any original permits,
Service Contracts, Equipment Leases and Space Leases that are in Seller's
possession or control which are to be assigned to Purchaser, by leaving them at
the Property following the Closing.

 

9.17         Other Documents. Seller and Purchaser shall each deliver such other
documents and instruments as may be reasonably requested by the Title Company,
including, without limitation, any commercially reasonable form of owner’s or
seller’s affidavits, to effectuate the transactions contemplated by this
Agreement and to induce the Title Company to insure title to the Real Property
as described herein.

 

9.18         Possession; Keys, Guest and Sales Information. Seller shall deliver
possession of the Property to Purchaser, together with all keys, including,
without limitation, keys for all security systems, rooms and offices. Seller
shall, or shall cause Manager to, transfer to Purchaser all non-proprietary
guest history and sales information for the Property in the possession or
control of Seller, any of Seller’s Affiliates or Manager.

 

9.19         Purchase Price. Purchaser shall deliver funds in the amount of the
Purchase Price, subject to the adjustments and apportionments set forth on the
Closing Statement, in the manner provided for in this Agreement. Purchaser shall
also deliver to the Title Company the amount of the Management Termination Fee
to be delivered to Manager in accordance with the instructions set forth in the
Manager Acknowledgment.

 

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ARTICLE X

 

Default

 

10.1         Purchaser's Default. If Purchaser fails to consummate the purchase
and sale contemplated herein by the Closing Date after all conditions precedent
to Purchaser's obligation to do so have been satisfied or waived by Purchaser,
or if Purchaser otherwise fails to perform any of its obligations as and when
required hereunder, Escrow Agent shall pay the Deposit to Seller in accordance
with the Escrow Instructions, as full and complete liquidated damages (provided,
however, that if Purchaser disputes Seller’s right to the Deposit and Seller
commences an action in a court of proper jurisdiction in order to recover the
Deposit, then if Seller is the prevailing party in any such action, Seller shall
also be entitled to a reimbursement by Purchaser of Seller's attorneys’ fees and
out-of-pocket costs in connection with such action), as the exclusive and sole
right and remedy of Seller, whereupon this Agreement shall terminate and neither
party shall have any further obligations or liabilities to the other party
except for those expressly stated to survive the termination of this Agreement.
Except for, and in consideration of, the foregoing pre-Closing remedies of
Seller, Seller hereby waives any other remedies available at law or in equity,
specifically excluding, if the Closing does occur, those indemnities set forth
in this Agreement that expressly survive Closing.

 

10.2         Seller's Default. If Seller fails to consummate the purchase and
sale contemplated herein by the Closing Date after all conditions precedent to
Seller’s obligation to do so have been satisfied or waived by Seller, or if
Seller otherwise fails to perform any of its obligations as and when required
hereunder, Purchaser's sole and exclusive remedies prior to Closing shall be
either to (a) waive said failure or breach and proceed to Closing, (b) enforce
specific performance of Seller's obligations under this Agreement, including
Seller's obligation to sell the Property to Purchaser (and Purchaser shall be
entitled to offset Purchaser’s attorneys’ fees and out-of-pocket costs against
the Purchase Price in connection with such action), or (c) terminate this
Agreement and obtain a refund of the Deposit, and Purchaser shall be entitled,
as its sole remedy, to recover its actual third party out-of-pocket costs
(including attorneys’ fees) incurred in connection with the transactions
contemplated hereunder, not to exceed $150,000.00. Purchaser shall be deemed to
have elected the immediately preceding option (c) if Purchaser fails to file
suit for specific performance against Seller in a court having jurisdiction in
the county and state in which the Property is located, on or before thirty (30)
days following the date upon which the Closing Date was to have occurred. Except
for, and in consideration of, the foregoing pre-Closing remedies of Purchaser,
Purchaser hereby waives any other remedies available at law or in equity,
specifically excluding, if the Closing does occur, those indemnities set forth
in this Agreement that expressly survive Closing.

 

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ARTICLE XI

 

RELEASE/Indemnification

 

11.1         "AS-IS" CONVEYANCE. PURCHASER ACKNOWLEDGES THAT THIS AGREEMENT
CONTEMPLATES THAT IT HAS, OR BY THE END OF THE FEASIBILITY PERIOD, WILL HAVE,
BEEN GIVEN THE OPPORTUNITY TO STUDY AND INVESTIGATE THE PROPERTY. EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN ANY OF THE CLOSING DOCUMENTS,
PURCHASER ACKNOWLEDGES THAT IT IS PURCHASING THE PROPERTY IN ITS EXISTING
CONDITION, "AS IS, WHERE IS AND WITH ALL FAULTS", AS OF THE CLOSING DATE,
INCLUDING, WITHOUT LIMITATION, WITH RESPECT TO ALL FACTS, CIRCUMSTANCES, TITLE,
ZONING AND LAND USE RESTRICTIONS, AND OTHER PROPERTY CONDITIONS.

 

EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN ANY OF THE CLOSING
DOCUMENTS, SELLER HEREBY DISCLAIMS ALL WARRANTIES OF ANY KIND OR NATURE
WHATSOEVER PERTAINING TO THE CONDITION OF THE PROPERTY (INCLUDING WARRANTIES OF
MERCHANTABILITY OR HABITABILITY AND FITNESS FOR PARTICULAR PURPOSES) OR TITLE TO
THE PROPERTY, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION,
WARRANTIES WITH RESPECT TO ZONING, TITLE, LAND VALUE, AVAILABILITY OF ACCESS OR
UTILITIES, COMPLIANCE WITH ANY LOCAL, STATE OR FEDERAL REQUIREMENTS, PRESENCE OF
HAZARDOUS MATERIALS, RIGHTS OF INGRESS OR EGRESS, GOVERNMENTAL APPROVALS, RIGHTS
OF THIRD PARTIES RELATING TO THE CONDITION OF THE PROPERTY, FUTURE RESTRICTIONS
UPON USE OR SALE, THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND
USES WHICH PURCHASER MAY CONDUCT THEREON (INCLUDING ANY DEVELOPMENT OF THE LAND
OR IMPROVEMENTS), THE QUALITY AND STATE OF REPAIR (OR LACK OF REPAIR) OF THE
LAND AND IMPROVEMENTS, THE VALUE OF AND INCOME TO BE DERIVED FROM THE PROPERTY,
DEFICIENCY OF ANY UNDER SHORING OR DRAINAGE, OR THE SOIL OR WATER CONDITIONS OF
THE PROPERTY.

 

23

 

 

EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN ANY OF THE CLOSING
DOCUMENTS, PURCHASER ACKNOWLEDGES THAT IN PURCHASING THE PROPERTY, PURCHASER IS
NOT RELYING ON ANY REPRESENTATION OR WARRANTY OF SELLER (OR ITS REPRESENTATIVES,
AGENTS OR EMPLOYEES) REGARDING THE PHYSICAL, ENVIRONMENTAL OR OTHER CONDITIONS
OF THE PROPERTY, OR WITH REGARD TO HABITABILITY OR FITNESS FOR A PARTICULAR USE,
OR WITH RESPECT TO THE VALUE, PROFITABILITY OR MARKETABILITY OF THE PROPERTY OR
TRANSFERABILITY OF ANY FRANCHISE, MANAGEMENT OR MEMBERSHIP AGREEMENT RELATING TO
THE PROPERTY, AND SELLER SPECIFICALLY DISCLAIMS MAKING ANY SUCH REPRESENTATION
OR WARRANTY NOT EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN ANY OF THE CLOSING
DOCUMENTS. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN ANY OF THE
CLOSING DOCUMENTS, PURCHASER ACKNOWLEDGES THAT ANY INFORMATION MADE AVAILABLE TO
PURCHASER OR PROVIDED OR TO BE PROVIDED BY OR ON BEHALF OF SELLER WITH RESPECT
TO THE PROPERTY WAS OBTAINED FROM A VARIETY OF SOURCES AND THAT SELLER HAS NOT
MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND
SELLER MAKES NO REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF SUCH
INFORMATION. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN ANY OF THE
CLOSING DOCUMENTS, NO STATEMENT, WHETHER ORAL OR IN WRITING, MADE BY ANY
PRINCIPAL, MEMBER, AGENT, REPRESENTATIVE, CONSULTANT, CONTRACTOR OR EMPLOYEE OF
SELLER, WHETHER BEFORE OR AFTER THE DATE OF THIS AGREEMENT, SHALL BE CONSIDERED
A REPRESENTATION OR WARRANTY OF SELLER, AND NO SUCH STATEMENT SHALL RESULT IN
ANY LIABILITY OF SELLER. EXCEPT WITH RESPECT TO ANY CLAIMS ARISING OUT OF ANY
BREACH OF ANY EXPRESS REPRESENTATION, WARRANTY, COVENANT OR INDEMNITY SET FORTH
IN THIS AGREEMENT, AND TO THE EXTENT AND SUBJECT TO THE LIMITATIONS AS EXPRESSLY
SET FORTH IN THIS AGREEMENT, PURCHASER AGREES TO FULLY AND IRREVOCABLY RELEASE
ALL SUCH SOURCES OF INFORMATION AND PREPARERS OF INFORMATION AND DOCUMENTATION
TO THE EXTENT SUCH SOURCES OR PREPARERS ARE SELLER, OR ITS EMPLOYEES, OFFICERS,
DIRECTORS, PARTNERS, REPRESENTATIVES, AGENTS, SERVANTS, ATTORNEYS, AFFILIATES,
SUCCESSORS OR ASSIGNS FROM ANY AND ALL CLAIMS THAT THEY MAY NOW HAVE OR
HEREAFTER ACQUIRE AGAINST SUCH SOURCES AND PREPARERS OF INFORMATION FOR ANY
COSTS, LOSS, LIABILITY, DAMAGE, EXPENSE, DEMAND, ACTION OR CAUSE OF ACTION
ARISING FROM SUCH INFORMATION OR DOCUMENTATION.

 

EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN ANY OF THE CLOSING
DOCUMENTS, PURCHASER HEREBY RELEASES SELLER FROM ANY AND ALL CLAIMS, LOSSES,
LIABILITIES, FINES, CHARGES, DAMAGES, INJURIES, PENALTIES, RESPONSE COSTS, AND
EXPENSES OF ANY AND EVERY KIND, WHATSOEVER (WHETHER KNOWN OR UNKNOWN) AND WAIVES
ANY CLAIM RELATING TO: (A) THE PRESENCE ON OR UNDER, OR THE ESCAPE, SEEPAGE,
LEAKAGE, SPILLAGE, DISCHARGE, EMISSION, OR RELEASE OF ANY HAZARDOUS MATERIAL ON
THE PROPERTY, IF ANY, INCLUDING WITHOUT LIMITATION, ANY RESIDUAL CONTAMINATION,
IN, ON, UNDER OR ABOUT THE PROPERTY OR AFFECTING NATURAL RESOURCES, WHETHER
OCCURRING PRIOR TO OR AFTER CLOSING, (B) MATTERS REASONABLY DISCOVERABLE BY
PRUDENT INVESTIGATION DURING THE FASIBILITY PERIOD; (C) MATTERS THAT ARE OF
PUBLIC RECORD; (D) MATTERS OTHERWISE DISCLOSED BY SELLER TO PURCHASER OR
DISCOVERED BY PURCHASER AT ANY TIME PRIOR TO THE CLOSING; (E) MATTERS THAT ARE
UNKNOWN TO SELLER; AND (F) ANY OTHER ITEMS DESCRIBED IN THIS SECTION 11.1.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT OR IN ANY
OF THE CLOSING DOCUMENTS, SELLER SHALL PROMPTLY NOTIFY PURCHASER OF ANY
INFORMATION SELLER BECOMES AWARE OF THAT REASONABLY COULD CAUSE ANY OF THE
REPRESENTATIONS OR WARRANTIES SET FORTH IN THIS AGREEMENT OR IN ANY OF THE
CLOSING DOCUMENTS TO BE INACCURATE OR UNTRUE.

 

24

 

 

THIS RELEASE AND WAIVER INCLUDES CLAIMS OF WHICH PURCHASER IS PRESENTLY UNAWARE
OR WHICH PURCHASER DOES NOT PRESENTLY SUSPECT TO EXIST WHICH, IF KNOWN BY
PURCHASER, WOULD MATERIALLY AFFECT PURCHASER'S RELEASE TO SELLER. PURCHASER
SPECIFICALLY WAIVES THE PROVISION OF ANY APPLICABLE LAW WHICH PROVIDES THAT A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT ARE NOT KNOWN AT THE TIME OF
EXECUTING THE RELEASE.

 

11.2         Agreement to Indemnify. Subject to any express provisions of this
Agreement to the contrary:

 

(a)          Seller shall hold harmless, indemnify and defend Purchaser against
any and all obligations, claims, losses, damages, liabilities and expenses
(including reasonable attorneys' fees and other charges) arising out of any
claims as a result of: (i) the inaccuracy of any representation or warranty of
Seller set forth in this Agreement (or any ancillary agreement entered into in
connection with this Agreement); or (ii) the failure of Seller to perform any of
its obligations under this Agreement (or any ancillary agreement entered into in
connection with this Agreement). Notwithstanding the foregoing, if prior to the
Closing, Purchaser has knowledge of an inaccuracy or breach of any of Seller's
representations, warranties or covenants and Purchaser nonetheless proceeds with
and consummates the Closing, then Purchaser shall be deemed to have waived and
forever renounced any right to assert a claim of breach or for indemnification
with respect to such inaccuracy or breach that was known to Purchaser prior to
Closing.

 

(b)          Purchaser shall hold harmless, indemnify and defend Seller against
any and all obligations, claims, losses, damages, liabilities and expenses
(including, without limitation, reasonable attorneys' fees and other charges)
arising out of any claims as a result of: (i) the inaccuracy of any
representation or warranty of Purchaser set forth in this Agreement (or any
ancillary agreement entered into in connection with this Agreement); or (ii) the
failure of Purchaser to perform any of its obligations under this Agreement (or
any ancillary agreement entered into in connection with this Agreement).
Notwithstanding the foregoing, if prior to the Closing, Seller has knowledge of
an inaccuracy or breach of any of Purchaser's representations, warranties or
covenants and Seller nonetheless proceeds with and consummates the Closing, then
Seller shall be deemed to have waived and forever renounced any right to assert
a claim of breach or for indemnification with respect to such inaccuracy or
breach that was known to Seller prior to Closing.

 

11.3         Notice and Cooperation on Indemnification. Whenever either party
shall learn through the filing of a claim or the commencement of a proceeding or
otherwise of the existence of any liability for which the other party is or may
be responsible under this Agreement, the party learning of such liability shall
notify the other party promptly and furnish such copies of documents (and make
originals thereof available) and such other information as such party may have
that may be used or useful in the defense of such claims and shall afford said
other party full opportunity to defend the same in the name of such party and
generally shall cooperate with said other party in the defense of any such
claim.

 

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ARTICLE XII

 

Casualty or Condemnation

 

If, prior to Closing, (a) condemnation proceedings are commenced against all or
any material portion of the Property or (b) the Property is damaged by fire or
other casualty to the extent that the cost of repairing such damage shall be Two
Million Four Hundred Thousand and No 100ths Dollars ($2,400,000.00) or more,
Purchaser shall have the right, upon notice in writing to the Seller delivered
within ten (10) days after actual notice of such condemnation, fire or other
casualty, to terminate this Agreement, whereupon the Deposit shall be returned
immediately to Purchaser, and neither party shall have any further liability to
the other hereunder except for those liabilities which expressly survive the
termination hereof. If Purchaser does not elect, or is not entitled, to
terminate this Agreement, the Purchase Price shall not be reduced except as
hereinafter set forth, but Purchaser shall be entitled to an assignment of all
of Seller's share of the proceeds of fire or other casualty insurance proceeds
(if any) payable with respect to the period after Closing except to the extent
utilized by Seller to repair the Property prior to Closing, or of the
condemnation award, as the case may be, and Seller shall have no obligation to
repair or restore the Property; provided, however, that the Purchase Price shall
be reduced by an amount equal to the sum of (a) the amount of any deductible
applied by Seller's insurer with respect to such fire or casualty and (b) the
amount by which the proceeds of such insurance will be reduced by reason of the
application of any co-insurance clause in Seller’s insurance policy. If
Purchaser proceeds to Closing hereunder, Seller shall not compromise, settle or
adjust any claims to such proceeds or awards, without Purchaser's prior written
consent, which shall not be unreasonably withheld, conditioned or delayed.

 

ARTICLE XIII

 

Apportionments

 

13.1         Apportionments. The following apportionments shall be made between
the parties at the Closing as of 11:59 p.m. (the "Cut-Off Time") on the day
immediately prior to the Closing Date (the "Apportionment Date").

 

(a)          real estate taxes, personal property taxes, special assessments and
vault charges, if any, on the basis of the fiscal period for which assessed;

 

(b)          fuel oil in the tank at the Property, if any, (based upon invoice
cost, first in, first out), water and sewer service charges and charges for gas,
electricity, telephone and all other public utilities. If there are meters
measuring the consumption of water, gas or electric current, Seller, not more
than one day prior to the Apportionment Date, if possible, shall cause such
meters to be read, and shall pay all utility bills for which Seller is liable
upon receipt of statements therefor. Purchaser shall be responsible for causing
such utilities and services to be changed to its name and shall be liable for
and shall pay all utility bills for services rendered after the Apportionment
Date. All utility adjustments will be made by the parties outside of Closing;

 

26

 

 

(c)          amounts which have been paid or are payable under the Service
Contracts, Equipment Leases, Space Leases, Consulting Agreement and Brackets
Lease assigned to and assumed by Purchaser at Closing;

 

(d)          prepaid advertising expenses;

 

(e)          commissions of credit and referral organizations; and

 

(f)          all other charges and fees customarily prorated and adjusted in
similar transactions; it being understood, however, that the Purchase Price
shall include all Inventories, whether opened or unopened, including alcoholic
and non-alcoholic beverage inventory.

 

13.2         Deposits. All deposits (including any interest thereon due the
party making such deposit) held by Seller and not applied prior to the Closing
Date, from guests or others made as security or in connection with future
services to be rendered, including deposits made under the Space Leases and
Rooms Agreements, shall be credited to Purchaser at the Closing. Purchaser shall
assume responsibility for the amount so credited and shall hold Seller harmless
therefrom. Seller shall hold Purchaser harmless from any liability for deposits
not so credited.

 

13.3         Room Revenue. All revenues received or to be received from
transient guests who checked in prior to Closing shall be prorated through
Closing. Seller shall be entitled to all charges to such guests up to the
Cut-Off Time, and Purchaser shall be entitled to all charges assessed to such
guests after the Cut-Off Time. Room rental receipts for the night immediately
before Closing shall be shared 50/50 by Seller and Purchaser.

 

13.4         Accounts Receivable; Accounts Payable.

 

(a)          All Accounts Receivable that are the property of Seller under this
Agreement shall be set forth in a schedule on the Closing Date, and shall be
assigned to Purchaser as of the Closing. Purchaser shall credit to Seller, in
the form of an increase in Purchase Price at Closing, an amount calculated as
follows: (i) one hundred percent (100%) of the amount of the Accounts Receivable
that have been outstanding for 0-60 days as of the Cut-Off Time; (ii) ninety
percent (90%) of the amount of the Accounts Receivable that have been
outstanding for 61-90 days as of the Cut-Off Time; (iii) eighty percent (80%) of
the amount of the Accounts Receivable that have been outstanding for 91-120 days
as of the Cut-Off Time; and (iv) zero percent (0%) of the amount of the Accounts
Receivable that are outstanding 121 days or more as of the Cut-Off Time. All
such Accounts Receivable as of the Cut-Off Time and all Accounts Receivable
arising out of Property operations from and after the Cut-Off Time shall be the
property of Purchaser after the Closing.

 

(b)          Any indebtedness, accounts payable, liabilities or obligations of
any kind or nature related to Seller or the Property for the periods prior to
and including the Apportionment Date shall be retained and paid by Seller, and
Purchaser shall not be or become liable therefor, except to the extent Purchaser
receives a credit therefor at Closing or otherwise assumes such liabilities
pursuant to this Agreement.

 

27

 

 

13.5         Food and Beverage Revenue; Vending Machine Revenue. All other
monies received in connection with the Property, including without limitation
the bar and restaurant services at the Property (other than amounts due from any
guest) on or before the Cut-Off Time shall belong to Seller, and after the
Cut-Off Time shall belong to Purchaser. Vending machine proceeds shall be
counted as close to the Cut-Off Time as is possible and the net amount thereof
shall be credited to Seller at Closing.

 

13.6         Guests’ Property. All baggage or other property of patrons of the
Property checked or left in care of Seller shall be listed in an inventory to be
prepared in duplicate and signed by Seller’s and Purchaser’s representatives on
the Closing Date. Purchaser shall be responsible from and after the Closing Date
and will indemnify, defend and hold Seller harmless from and against all claims
for all baggage and property listed in such inventory. Seller shall indemnify,
defend and hold harmless Purchaser from and against claims for baggage and
property not listed in such inventory but shown to have been left in custody at
the Property prior to the Closing Date.

 

13.7         Accounting. Except as otherwise expressly provided herein, all
apportionments and adjustments shall be made on an accrual basis in accordance
with generally accepted accounting principles. The computation of the
adjustments shall be jointly prepared by Seller and Purchaser, and, upon the
request of either Purchaser or Seller, shall be reviewed by RSM McGladrey, or
another similarly reputable accounting firm (the “Accountants”) and reviewed by
representatives of both Purchaser and Seller. To the extent the exact amount of
any adjustment item provided for in this Article XIII cannot be precisely
determined on the Closing Date, the Accountants shall estimate the amount
thereof, for purposes of computing the net amount due Seller or Purchaser
pursuant to this Article XIII and shall determine the exact amount thereof not
later than ninety (90) days after the Closing Date in accordance with Section
13.10. The determinations made by the Accountants shall be binding on both
Seller and Purchaser. The fees and expenses of the Accountants shall be borne
one-half each by Seller and Purchaser.

 

13.8         Employee Compensation.

 

(a)          Manager shall be solely responsible for any liability for payment
of all employees’ wages, accrued vacation pay, sick leave, bonuses, pension
benefits, including, without limitation, any COBRA rights, and other benefits
earned by and due to or accrued to Hotel Employees through the Cut-Off Date,
together with F.I.C.A., unemployment and other taxes and benefits due from any
employer of such employees; provided, however, that to the extent Manager is
entitled to any reimbursement thereof, Seller shall be solely responsible for
such reimbursement. Purchaser or its replacement manager, as applicable, shall
be solely responsible for any liability for payment of all employees’ wages,
accrued vacation pay, sick leave, bonuses, pension benefits, including, without
limitation, any COBRA rights, and other benefits earned by and due to or accrued
to Continuing Employees from and after the Cut-Off Date, together with F.I.C.A.,
unemployment and other taxes and benefits due from any employer of such
employees. Seller shall indemnify, defend and hold Purchaser harmless from and
against any and all liability, loss, cost, damage or expense related to any of
the foregoing items arising prior to Closing, and Purchaser shall indemnify,
defend and hold Seller harmless from and against any and all liability, loss,
cost, damage or expense related to any of the foregoing items arising from and
after Closing. Such indemnities shall survive Closing.

 

28

 

 

(b)          Notwithstanding the foregoing, subject to the approval of Manager,
Purchaser may elect, at its option, during the Feasibility Period, to assume the
obligations of Manager and Seller with respect to accrued vacation pay and sick
leave for the Continuing Employees, and if Purchaser make such election in a
timely manner, then (i) Purchaser shall receive a credit at Closing in the
amount of such accrued vacation pay and sick leave for the Continuing Employees
(the “PTO Credit”) and (ii) Purchaser shall indemnify, defend and hold Seller
harmless from and against any and all liability, loss, cost, damage or expense
for claims by such Continuing Employees for vacation pay and sick leave to the
extent credited to Purchaser in accordance with clause (i).

 

13.9         Existing Loan. Provided that the Existing Loan is assumed by
Purchaser at Closing as provided in this Agreement, then the outstanding
principal balance of the Existing Loan as of the Apportionment Date shall be
credited toward payment of the Purchase Price. Accrued and unpaid interest
payable under the Existing Loan shall be prorated on an accrual basis. Seller
shall be debited with all such interest which accrues prior to the Apportionment
Date and Purchaser shall be credited with such amount. At Closing, title to any
reserves, impounds or escrow accounts under the Existing Loan for real estate
taxes, insurance, FF&E, capital improvements, deferred maintenance or other
items shall be assigned by Seller to Purchaser, and Seller shall be credited
with the amount (except Seller shall not be credited for the amount of the
Brackets TI/LC Amount held in a reserve account and assigned to Purchaser
pursuant to Section 6.5(a) above), as certified in writing by Existing Lender,
in such account as of the Apportionment Date. In the event that any amounts held
in any reserves, impounds or escrow accounts under the Existing Loan cannot be
assigned to Purchaser, then such amounts shall be liquidated and disbursed to
Seller at Closing.

 

13.10         Post-Closing True-Up. Except as provided below, on the date which
is ninety (90) days following the Closing, Seller and Purchaser shall make a
final determination of the apportionments required hereunder (the “True-up”),
and within ten (10) business days of the True-up, Seller or Purchaser, as the
case may be, shall pay to the other the amount as may be required by the
True-up. At the True-up, Seller and Purchaser shall recalculate and reapportion
any income and expenses (i) which were not apportioned on the Closing Statement
because of the unavailability of information, (ii) which were apportioned on the
Closing Statement based upon estimated or incomplete information, or (iii) for
which errors exist on the Closing Statement.  The True-up shall be final and
except as otherwise expressly set forth in this Agreement, there shall be no
further adjustment between Seller and Purchaser for income and expenses.

 

13.11         Gift Certificates. Seller shall provide Purchaser with a credit at
Closing for any gift certificates for use at the Real Property in an amount
equal to (i) seventy-five percent (75%) of the face amount of all gift
certificates outstanding as of the Closing Date plus (ii) one hundred dollars
($100) per room night for any “free room” gift certificates or donated gift
certificates as shown on Schedule 13.11 attached hereto (the “Gift Certificate
Schedule”), which Gift Certificate Schedule shall be updated by Seller as of
Closing.

 

29

 

 

ARTICLE XIV

 

Miscellaneous

 

14.1         Survival.

 

(a)          The representations, warranties, covenants and indemnities
contained in this Agreement shall be effective as of the Closing Date, and any
liability with respect to breach thereof shall survive the Closing for a period
of nine (9) months. Except as otherwise expressly provided herein, all claims by
either party hereto, whether for amounts due or otherwise, under any provision
of this Agreement, must be made in writing to the other party no later than
thirty (30) days from the date when the factual basis for such claim became
known to the party asserting the claim.

 

(b)          If Purchaser receives knowledge or notice of any default or
potential default by Seller of the representations and warranties set forth in
Section 3.14 (and/or any facts or circumstances which might give rise to a claim
by Purchaser against Seller for a breach of such representations or warranties,
including, without limitation, any notice from Existing Lender of a Pre-Closing
Loan Default), then Purchaser shall promptly provide written notice thereof to
Seller setting forth in reasonable detail the facts and circumstances of such
actual or potential Pre-Closing Loan Default. Purchaser acknowledges and agrees
that prior to Seller becoming liable to Purchaser for any breach of any
representation and warranty set forth in Section 3.14 with respect to a
Pre-Closing Loan Default, Seller shall have the benefit of all notice and cure
rights afforded to the “Borrower” under the Existing Loan Documents with respect
to any such default, alleged default or event of default.

 

14.2         Assignment. This Agreement may not be assigned by Purchaser without
the prior written consent of Seller, which Seller may grant or deny in its sole
and absolute discretion; provided, however that Purchaser shall be permitted to
assign this Agreement without the prior consent of Seller to any entity wholly
owned and controlled by Purchaser, provided notice thereof and a fully executed
copy of the assignment and assumption agreement is given to Seller at least five
(5) business days prior to the Closing and such assignee assumes in writing all
of Purchaser’s obligations hereunder. Notwithstanding the assumption of this
Agreement by such assignee, the Purchaser named herein shall remain liable for
all of the Purchaser’s obligations hereunder until the Closing Date and shall
not be deemed to be released as a result of such permitted assignment and
assumption prior to the Closing Date.

 

14.3         Consents. If, under this Agreement, the consent of a party is
required, the consent shall be in writing and shall be executed by a duly
authorized officer or agent.

 

14.4         Applicable Law. This Agreement shall be governed by the laws of the
State of Texas, without resort to the choice of law rules thereof.

 

14.5         Headings; Exhibits and Schedules. The headings of articles and
sections of this Agreement are inserted only for convenience; they are not to be
construed as a limitation of the scope of the particular provision to which they
refer. All exhibits and schedules attached or to be attached to this Agreement
are incorporated herein by this reference.

 

14.6         Notices. Notices and other communications required by this
Agreement shall be in writing and delivered by hand against receipt or sent by
recognized overnight delivery service or by certified or registered mail,
postage prepaid, with return receipt requested. All notices shall be addressed
as follows:

 

30

 

 

If to Purchaser:  

THI VI Dallas Mockingbird LLC

c/o Thayer Advisory Group LLC

1997 Annapolis Exchange Parkway, Suite 550

Annapolis, Maryland 21401

Attention: Linda Yau, Managing Director, Development

Telephone: (443) 758-9044

Facsimile: (410) 268-1582

Email: lyau@thayerlodging.com 

      with a copy to:  

Hogan Lovells US LLP

555 Thirteenth Street, N.W.

Washington, D.C. 20004

Attention: Carol Weld King, Esq.

Telephone: (202) 637-5634

Facsimile: (202) 637-5910

Email: carol.king@hoganlovells.com

      If to Seller:   Behringer Harvard Mockingbird Commons, LLC
15601 Dallas Parkway, Suite 600
Dallas, Texas 75001
Attention: Jeff Burns
Telephone: 214.655.1600
Facsimile: 214.655.1610           Behringer Harvard Mockingbird Commons, LLC
15601 Dallas Parkway, Suite 600
Dallas, Texas 75001
Attention: Jeff Carter
Telephone: 214.655.1600
Facsimile: 214.655.1610       with a copy to:   Jeffer Mangels Butler & Mitchell
LLP
1900 Avenue of the Stars, 7th Floor
Los Angeles, CA 90067
Attention: David Sudeck, Esq.
Telephone: 310.201.3518
Facsimile: 310.712.8566

 

or to such other address as may be designated by a proper notice. Notices shall
be deemed to be effective upon receipt (or refusal thereof) if personally
delivered or sent by recognized overnight delivery service or three (3) days
following the date of mailing if sent by certified mail.

 

14.7         Limitation on Liability. Seller shall have no liability for the
breach of any representation, warranty, covenant indemnity or other obligation
expressly stated to survive the Closing hereunder unless and until the aggregate
amount of Purchaser’s out-of-pocket damages and expenses directly resulting from
such breaches exceeds one-quarter of one percent (0.25%) of the Purchase Price.
In no event will Seller be liable to Purchaser for any damages to the Purchaser
in excess of the sum of four percent (4%) of the Purchase Price.

 

31

 

 

14.8         Waiver. The failure of either party to insist on strict performance
of any of the provisions of this Agreement or to exercise any right granted to
it shall not be construed as a relinquishment or future waiver; rather, the
provision or right shall continue in full force. No waiver of any provision or
right shall be valid unless it is in writing and signed by the party giving it.

 

14.9         Partial Invalidity. If any part of this Agreement is declared
invalid by a court of competent jurisdiction, this Agreement shall be construed
as if such portion had never existed, unless this construction would operate as
an undue hardship on Seller or Purchaser or would constitute a substantial
deviation from the general intent of the parties as reflected in this Agreement.

 

14.10         Entire Agreement. This Agreement, together with the other writings
signed by the parties and incorporated by reference and together with any
instruments to be executed and delivered under this Agreement, constitutes the
entire agreement between the parties with respect to the purchase and sale of
the Property and supersedes all prior oral and written understandings.
Amendments to this Agreement shall not be effective unless in writing and signed
by the parties hereto.

 

14.11         Time is of the Essence. Time is of the essence with respect to
performance of all obligations under this Agreement.

 

14.12         Waiver of Jury Trial. Seller and Purchaser each hereby waives any
right to jury trial in the event any party files an action relating to this
Agreement or to the transactions or obligations contemplated hereunder.

 

14.13         Counterparts. This Agreement may be executed in any number of
original, facsimile or PDF counterparts which, when taken together, shall
constitute a single, binding instrument.

 

14.14         Brokerage. Purchaser and Seller represent to each other that no
broker or consultant acting on its behalf brought about this transaction. Each
of the parties hereto agrees to indemnify, defend and hold the other harmless
from claims made by any broker, attorney or finder claiming through such party
for a commission, fee or compensation in connection with this Agreement or the
sale of the Property hereunder. The provisions of this Section 14.14 shall
survive Closing.

 

14.15         Time for Performance. If the date for the performance of any
obligation, or the giving of any notice, by Seller or Purchaser hereunder falls
upon a Saturday, Sunday or legal holiday recognized by the United States
government, then the time for such performance or notice shall be extended until
the next business day.

 

32

 

 

14.16         No Public Disclosure. Prior to Closing, Seller and Purchaser agree
to keep this Agreement confidential and not disclose or make any public
announcements with respect to the subject matter hereof without the reasonable
approval of the other party; provided, however, that Purchaser shall be
permitted to provide a copy of this Agreement to Purchaser’s Permitted Outside
Parties and Seller shall be permitted to provide a copy of this Agreement to its
members in connection with Seller’s obligations under Section 6.8(a). In
addition, prior to Closing, all press releases or other dissemination of
information to the media or responses to requests from the media for information
relating to the transaction contemplated herein shall be subject to the prior
written consent of Purchaser and Seller.

 

14.17         Recordation. Purchaser and Seller agree not to record this
Agreement or any memorandum hereof.

 

[SIGNATURES APPEAR ON FOLLOWING PAGE]

 

33

 

 

IN WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to be
executed as of the date indicated below.

 

    SELLER       WITNESS:   BEHRINGER HARVARD MOCKINGBIRD COMMONS, LLC,     a
Delaware limited liability company           By:       Name:   Date:     Its:  
          PURCHASER           THI VI DALLAS MOCKINGBIRD LLC,     a Delaware
limited liability company           By:       Name:   Date:     Its:  

 

34

 

 

EXHIBITS AND SCHEDULES

  

A Legal Description of Land B List of Service Contracts C List of Space Leases D
List of Rooms Agreements E Purchase Price Allocation F Form of Escrow
Instructions For Deposit G Existing Loan Documents H List of Equipment Leases J
Due Diligence Materials K Form of Deed L Form of Bill of Sale M Form of
Assignment of Permits and Licenses N Form of Assignment of Service Contracts,
Rooms Agreements and Equipment Leases O Form of Assignment of Space Leases and
Brackets Lease P Form of Assignment of Consulting Agreement 6.1(b) Capital
Expenditures 13.11 Gift Certificates

 

 

 

 

EXHIBIT A

 

Legal Description of Land

 

THE REAL PROPERTY REFERRED TO HEREIN IS ALL THAT CERTAIN REAL PROPERTY LOCATED
IN THE CITY OF DALLAS, COUNTY OF DALLAS, STATE OF TEXAS DESCRIBED AS FOLLOWS:

 

TRACT I:

 

Unit *, of M CENTRAL MASTER CONDOMINIUM, a Condominium regime in the City of
Dallas, Dallas County, Texas, according to the Declaration filed for record on
September 16, 2005, and recorded in Volume 2005182, Page 111, Real Property
Records, Dallas County, Texas, and affected by First Amendment recorded under
Clerk’s File No. 200600480560, Real Property Records, Dallas County, Texas, and
affected by Second Amendment recorded under Clerk’s File No. 20070028530, Real
Property Records, Dallas County, Texas, together with an undivided interest in
the General Common Elements as described in and allocated pursuant to said
Declaration, and together with the exclusive use of the Limited Common Elements
appurtenant thereto, all as described in said Declaration.

 

Unit *

 

Hotel Unit

Retail Unit

Hotel Room Unit 1

Hotel Room Unit 2

Hotel Room Unit 3

Hotel Room Unit 4

 

(Without any representation or warranty by Seller, Seller is informed and
believes that Hotel Room Units 1-4 were originally described as Hotel Room Units
1-17 in the M Central Master Condominium Declaration. The foregoing statement is
for informational purposes only, and shall not be included in the legal
description attached to the Deed or any other documents delivered at Closing.)

 

TRACT II

 

Unit *, of M CENTRAL RESIDENCES, a Condominium regime in the City of Dallas,
Dallas County, Texas, according to the Declaration filed for record on September
16, 2005, and recorded in Volume 2005182, Page 204, Real Property Records,
Dallas County, Texas, and affected by First Amendment recorded under Clerk’s
File No. 200600480562, Real Property Records, Dallas County, Texas, and affected
by Second Amendment recorded under Clerk’s File No. 20070028529, Real Property
Records, Dallas County, Texas, together with an undivided allocated percent
interest in the Residential General Common Elements as described in and
allocated pursuant to said Declaration, and together with the exclusive use of
the Residential Limited Common Elements appurtenant thereto, all as described in
said Declaration.

 

Unit *

 

Penthouse in Hotel Tower

 

Exhibit A
1

 

 

EXHIBIT B

 

List of Service Contracts

 

Service Provider   Service Name ACFN ATM   ATM Provider Advent   Telephone
Switch Maintenance Aquarium Environments   Fish Tank Maintenance Vingcard –
Elsafe – Ving   Guest Key Machine Support AT&T Superclick   Guest Internet
Support Avero   POS Data Interface Brinks   Armored Car Service Cintas   Uniform
Rental – Engineering Dallas Janitorial   Kitchen Cleaning ECOtality   Electric
Vehicle Charging Stations Eleven Wireless   Wireless Guest Internet
Provider/Payment Collection Fintech   Alcoholic Beverage Payment Processor GEMS
  Mini Bar Software System Gray V   Background Music Guestware   Customer
Relationship Management System IDEA’s   Yield Management System Infor – Epitome
– PMS   Property Management System Lodgenet – Free to Guest   Free to Guest
Television Lodgenet – Pay Per View   Pay Per View Television Open Table  
Restaurant Reservation Service Otis Elevator   Elevator Maintenance Pegasus  
Travel Agent Payment Processing Radiant – Aloha – POS   Restaurant Point of Sale
System Reliant   Electricity Provider SDD Jazz Fusion – Telemanager   Telephone
Profitability System Signature Garment Care – Room Linen   Hotel and Guest
Linen/Cloth Washing Service Signature Garment Care – F & B Linen   F & B Linen
Service Swank – PSAV   On Site Audio Visual Service Provider Telepacific  
Admin/Guest Internet Provider XO Communications   Admin/Guest Internet Provider

 

Exhibit B
1

 

 

EXHIBIT C

 

List of Space Leases

 

Audali, Inc., f/k/a/ Optix Eye Care and Gallery, P.A. and Linda Fain Hatton,
O.D., P.A.

 

·Retail Lease dated May 8, 2009 by and between Behringer Harvard Mockingbird
Commons, LL

·Assignment and Assumption of Lease dated August 17, 2009 by and between
Behringer Harvard Mockingbird Commons, LLC, a Delaware limited liability company
(“Landlord”) and Optix Eye Care and Gallery, P.A., a Texas professional
Association f/k/a Linda Fain Hatton, O.D., P.A. (“Assignor”) and Audali, Inc., a
Texas corporation (“Assignee”)

·Consent to Sublease dated August 17, 2009 by and between Behringer Harvard
Mockingbird Commons, LLC, a Delaware limited liability company (“Landlord”) and
Audali, Inc., a Texas corporation (“Sublessor”) and Optix Eye Care and Gallery,
P.A., a Texas professional association (“Sublessee”)

·Sublease Agreement dated August 17, 2009 by and between Audali, Inc. a Texas
corporation (“Sublessor”) and Linda Fain Hatton, OD, PA (“Sublessee”)

·Notice of Lease Term dated September 16, 2009 by and between Behringer Harvard
Mockingbird Commons, LLC, a Delaware limited liability company (“Landlord”) and
Audali, Inc., a Texas corporation (“Tenant”)

 

DD+JJ Productions, LLC d/b/a Salon Pompeo

·Retail Lease dated September 4, 2008 by and between Behringer Harvard
Mockingbird Commons LLC, a Texas limited liability company (“Landlord”) and
DD+JJ Productions, a Texas limited liability company (“Tenant”)

·First Amendment to Retail Lease dated March 2, 2012 by and between Behringer
Harvard Mockingbird Commons, LLC, a Delaware limited liability company f/k/a
Behringer Harvard Mockingbird Commons LP, a Texas limited partnership
(“Landlord”) and DD+JJ Productions, LLC, a Texas limited liability company dba
Salon Pompeo (“Tenant”) and joined by Deanna Dipizio Johnson (“Guarantor”)

 

Exhale Enterprises VIII, Inc.

 

·Retail Lease dated October 7, 2005 by and between Behringer Harvard Mockingbird
Commons LP, a Texas limited partnership (“Landlord”) and Exhale Enterprises
VIII, Inc., a Delaware corporation (“Tenant”)

·First Amendment to Retail Lease dated September 3, 2008 by and between
Behringer Harvard Mockingbird Commons, LLC, a Texas limited liability company
(“Landlord”) and Exhale Enterprises VIII, Inc., a Delaware corporation
(“Tenant”)

·Second Amendment to Retail Lease dated September ___, 2010, by and between
Behringer Harvard Mockingbird Commons, LLC, a Delaware limited liability company
f/k/a Behringer Harvard Mockingbird Commons LP, a Texas limited partnership
(“Landlord”) and Exhale Enterprises VIII, Inc., a Delaware corporation
(“Tenant”)

 

Exhibit C
1

 

 

Mint Dentistry

 

·Retail Lease dated April 10, 2009 by and between Behringer Harvard Mockingbird
Commons, LLC, a Delaware limited liability company (“Landlord”) and Mint
Dentistry, PLLC, a Texas professional limited liability company (“Tenant”)

·First Amendment to Lease Agreement dated July 8, 2009 by and between Behringer
Harvard Mockingbird Commons, LLC, a Delaware limited liability company
(“Landlord”) and Mint Dentistry, PLLC, a Texas professional limited liability
company (“Tenant”)

 

Rooftop Leases:

 

T-Mobile

 

·Rooftop Lease with Option by and between Maharishi School of Vedic Science,
Predecessor in Interest to Behringer Harvard Mockingbird Commons, LLC, a
Delaware limited liability company (“Landlord”) and T-Mobile West, LLC (formerly
Cook Inlet/VoiceStream PCS, LLC) (“Tenant”)

 

GTP Acquisition Partners III, LLC

 

·Master Rooftop Lease Agreement dated September 30, 2009 by and between
Behringer Harvard Mockingbird Commons, LLC successor in interest to Behringer
Harvard Mockingbird Commons, LP acting by and through HPT Management Services,
LP, its property manager (“Landlord”) and GTP Acquisition Partners III, LLC a
Delaware limited liability company (“Tenant”)

·Site License Agreement (part of Master Rooftop Agreement) dated October 6, 2009
by and between GTP Acquisition Partners III, LLC, a Delaware limited liability
company (“Lessor”) and Clear Wireless, LLC, a Nevada limited liability company
(“Lessee”)

·First Amendment to Site License Agreement (part of Master Rooftop Agreement)
dated June 30, 2010 by and between GTP Acquisition Partners II, LLC, a Delaware
limited liability company (“Lessor”) and Clear Wireless, LLC, a Nevada limited
liability company (“Lessee”)

·Second Amendment to Site License Agreement (part of Master Rooftop Agreement)
dated March 14, 2013 by and between GTP Acquisition Partners III, LLC, a
Delaware limited liability company (“Lessor”) and Clear Wireless, LLC, a Nevada
limited liability company (“Lessee”)

·Lease Extension Letter dated January 9, 2013 by and between Behringer Harvard
Mockingbird Commons, LLC successor in interest to Behringer Harvard Mockingbird
Commons, LP acting by and through HPT Management Services, LP, its property
manager (“Landlord”) and GTP Acquisition Partners III, LLC a Delaware limited
liability company (“Tenant”)

 

2

 

 

EXHIBIT D

 

List of Rooms Agreements

 

None.

 

Exhibit D
1

 

 

EXHIBIT E

 

Purchase Price Allocation

 

Personal Property  $1,000,000  Intangibles  $6,200,000  Real Property 
$40,800,000 

 

Exhibit E
1

 

 

EXHIBIT F

 

Form of Escrow Instructions For Deposit

 

__________, 2014

 

Jennifer D. Panciera

First American Title Insurance Company

633 Third Avenue,

New York, New York 10017

jpanciera@firstam.com

 

Re:Deposit under Purchase and Sale Agreement (the "Agreement") dated May __,
2014, by and between Behringer Harvard Mockingbird Commons LLC ("Seller") and
THI VI Dallas Mockingbird LLC ("Purchaser")

 

Ms. Panciera:

 

Purchaser and Seller have entered into the Agreement pursuant to which Purchaser
agrees to purchase the hotel and retail space located at 5300 and 5330 East
Mockingbird Lane, Dallas, Texas, all as more particularly set forth in the
Agreement. In accordance with the Agreement, Purchaser is delivering herewith
cash in the amount of One Million and No/100ths Dollars ($1,000,000.00) (which,
along with any interest earned thereon, or any additional cash, is hereinafter
referred to as the "Deposit"). You are to hold the Deposit in escrow and deliver
it to Seller or Purchaser in accordance with these instructions.

 

If, prior to __________, 20141, you receive a notice from Purchaser stating that
it is terminating the Agreement, you shall immediately return the Deposit to
Purchaser. If, at any time after such date, you receive a written statement from
Seller ("Seller's Notice") stating that (i) Purchaser is in default under the
Agreement, and (ii) a copy of Seller's Notice has been delivered to Purchaser,
you shall, on the fifth (5th) day after receipt of Seller's Notice, deliver the
Deposit (by delivering cash, certified check or some other form of immediately
available funds, if the Deposit was made in cash, or by delivering the letter of
credit if the Deposit was made by letter of credit) to Seller, at 15601 Dallas
Parkway, Suite 600, Dallas, Texas, 75001, Attention: Jeff Burns, or such other
address as Seller may request, except that if you receive written notice from
Purchaser or Purchaser's counsel within four (4) days after receipt of Seller's
Notice that Purchaser disputes Seller's right to receive the Deposit and directs
you not to make the foregoing delivery, you shall not deliver the Deposit to
Seller but shall instead retain the Deposit or, if appropriate, interplead the
Deposit in a court of competent jurisdiction.

 

 

1            Purchaser and Seller to jointly provide date to be inserted to
Escrow Agent no later than May 29, 2014. Date to be inserted is either (a) 30
days after the date that Seller delivers the Consent Notice to Purchaser or (b)
if Seller does not deliver the Consent Notice to Purchaser by the Consent Notice
Deadline, and if Seller chooses not to terminate the Agreement in accordance
with Section 6.8(a) of the Agreement, 30 days after the Consent Notice Deadline.

 

Exhibit F
2

 

 

If closing occurs under the Agreement, you shall apply the Deposit in accordance
with instructions from Purchaser and Seller. If you receive a written statement
from Purchaser ("Purchaser's Notice") stating that (A) Purchaser is excused from
performing under the Agreement, and that a copy of Purchaser's Notice has been
delivered to Seller, or (B) Seller is in default under the Agreement, and that a
copy of Purchaser's Notice has been delivered to Seller, you shall, on the fifth
(5th) day after receipt of Purchaser's Notice, deliver the Deposit to Purchaser
at c/o Thayer Advisory Group LLC, 1997 Annapolis Exchange Parkway, Suite 550,
Annapolis, Maryland 21401, Attention: Linda Yau, except that if you receive
written notice from Seller or Seller's counsel within four (4) days after
receipt of Purchaser's Notice that Seller disputes Purchaser's right to receive
the Deposit and directs you not to make the foregoing delivery, you shall not
deliver the Deposit to Purchaser but shall instead retain it or, if appropriate,
interplead the Deposit in a court of competent jurisdiction.

 

You are not to disclose to any person (other than the parties hereto, their
employees, agents or independent contractors) any information about the
Agreement or its existence or this letter of instructions (except if requested
by either party or as may be required by court in any litigation or by law).

 

If the Deposit (or a portion thereof) is made in cash, you are to maintain the
Deposit in a federally-insured interest-bearing account in a financial
institution in the Washington, D.C. metropolitan area, and all interest accruing
thereon shall be paid to the party entitled to the Deposit under the terms of
the Agreement. However, whether the Deposit be cash or a letter of credit, we
understand that you assume no responsibility for, nor will we hold you liable
for, any loss accruing due to bank failure and/or takeover by a federal
regulatory agency, or which arises solely from the fact that the escrow amount
exceeds One Hundred Thousand Dollars ($100,000) and that the excess amount is
not insured by the Federal Deposit Insurance Corporation. Nor shall you be
required to institute legal proceedings of any kind pursuant to these
instructions, nor be required to defend any legal proceedings which may be
instituted against you with respect to the subject matter of these instructions
unless you are requested to do so by Purchaser or Seller and arrangements
reasonably satisfactory to you have been made to indemnify you against the cost
and expense of such defense by the party making such request. If any dispute
shall arise with respect to these instructions, whether such dispute arises
between the parties hereto or between the parties hereto and other persons, you
may interplead such disputants. Escrow Agent shall be responsible only for the
performance of such duties as are strictly set forth herein and in no event
shall Escrow Agent be liable for any act or failure to act under the provisions
of this letter except where such action or inaction is the result of Escrow
Agent's willful misconduct or negligence.

 

Seller and Purchaser each hereby agrees to indemnify you and hold you harmless
against any loss, liability or damage (including the cost of litigation and
reasonable counsel fees) incurred in connection with the performance of your
duties hereunder except as a result of your willful misconduct or negligence.

 

Exhibit F
3

 

 

Please indicate your agreement to comply with the foregoing instructions by
executing at least two copies of this letter and returning one to Purchaser's
counsel and one to Seller's counsel.

 

    Very truly yours,           SELLER       WITNESS/ATTEST:   BEHRINGER HARVARD
MOCKINGBIRD COMMONS LLC                 By:         Name:         Its:          
        PURCHASER               THI VI DALLAS MOCKINGBIRD LLC                
By:         Name:         Its:                       ACKNOWLEDGED AND AGREED:  
            FIRST AMERICAN TITLE INSURANCE COMPANY                 By:        
Name:         Its:                    

Exhibit F
4

 

 

EXHIBIT G

 

Existing Loan Documents

 

·Promissory Note

 

·Deed of Trust, Fixture Filing, Assignment of Rents and Security Agreement

 

·Assignment of Leases and Rents

 

·Indemnity, Guaranty and Suretyship Agreement

 

·Hazardous Substances Indemnity Agreement

 

·Subordination Agreement

 

·Liquor License Agreement

 

·Collateral Assignment and Subordination and Nondisturbance of Hotel Operating
Agreement

 

Exhibit G
1

 

 

EXHIBIT H

 

List of Equipment Leases

 

Equipment Leases

 

·Pitney Bowes Global Financial Services Lease Agreement dated 6/3/2010

·IKON Financial Services Lease Agreement dated 12/4/2009 – Please note, this
Agreement has now expired but continues on a MTM basis

 

Vehicle Leases

 

·Sewell Lexus Retail Lease Agreement dated December 20, 2011 for a 2012 Lexus
Model GX460

 

Exhibit H
1

 

 

EXHIBIT J

 

Due Diligence Materials

 

1)Audited historical financial statements

 

2)Historical separate hotel and restaurant P&Ls (currently only have
consolidated)

 

3)YE 2012 STR Report

 

4)Latest 2014 reforecast

 

5)2014 operating, marketing and capital plans

 

6)2014 CAM budget

 

7)Real estate and personal property tax bills for the past two years

 

8)Utility bills for the past two years

 

9)Historical Exhale Spa Gross Sales since 2008 (or rent reconciliation)

 

10)Historical insurance bills for retail

 

11)Historical utility bills for retail

 

12)Historical real estate tax bills for retail

 

13)Historical capex spend. Future capital expenditures budget (if available)

 

14)New guestroom renovation design concept and cost estimates

 

15)Restaurant and bar renovation design concept and cost estimates

 

16)Copy of all trademarks, trade names, and copyrights

 

17)Existing appraisal, environmental, asbestos, mechanical, soil, physical or
other reports, studies or surveys prepared within the past three years

 

18)Recent survey, title insurance policy and evidence of zoning compliance.

 

19)Copy of as-built plans and specifications. Full retail floor plans

 

20)Copy of any collective bargaining or other related agreements, employment
contracts and an employee census

 

21)Copy of all contracts, leases, license agreements, service or equipment
agreements, permits, marketing contracts and any instruments that Buyer is
expected to assume

 

Exhibit J
1

 

 

22)Copy of all zoning and use permits, development rights, certificates of
occupancy, elevator permits and licenses, liquor licenses and any other permits
or authorizations required for the current uses or future development of the
Property

 

23)Complete list of advance reservations, room contract agreements, group room
booking and catering pace reports

 

24)Guest Room Control Log

 

25)Summary of pending litigation

 

26)General liability claims and schedule of claims including worker's
compensation

 

27)Organizational chart

 

28)Insurance loss history report for past five years

 

29)Recent health, fire, building, and elevator inspection reports

 

30)Loan documents

 

31)2013 and latest pace reports for group and catering

 

Exhibit J
2

 

 

EXHIBIT K

 

Form of Special Warranty Deed

 

NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR
STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT
TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE
PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S LICENSE NUMBER.

 

 

 

SPECIAL WARRANTY DEED

 

 

 

STATE OF TEXAS §   § COUNTY OF ____________ §

 

________________________, a _____________________ ("Grantor"), whose mailing
address is _____________________________________________, for and in
consideration of the sum of TEN AND NO/100 DOLLARS ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged from ______________________, a _________________ ("Grantee"), whose
mailing address is ______________________________, has GRANTED, SOLD AND
CONVEYED, and by these presents does GRANT, SELL AND CONVEY, unto Grantee, the
following described property:

 

(i)That certain real property in _________ County, Texas, which is described on
Exhibit A attached hereto and incorporated herein by reference (the "Land");

 

(ii)All buildings, structures, utility lines, utility facilities, utility
improvements, street and drainage improvements, and other improvements of any
kind or nature located in, on, or under the Land (all of the foregoing being
referred to herein collectively as the "Improvements"); and

 

(iii)All appurtenances benefiting or pertaining to the Land or the Improvements,
including, without limitation, all of Grantor's right, title, and interest in
and to all development and utility rights and permits benefiting the Land and
all streets, alleys, rights-of-way, or easements adjacent to or benefiting the
Land, and all strips or pieces of land abutting, bounding, or adjacent to the
Land (all of the foregoing being referred to herein collectively as the
"Appurtenances").

 

The Land, Improvements and Appurtenances are collectively referred to herein as
the "Property".

 

Exhibit K
1

 

 

TO HAVE AND TO HOLD the Property, together with all and singular the rights and
appurtenances thereto in anywise belonging unto Grantee, and Grantee's
successors or assigns, forever; and, subject to all of the matters set forth or
referred to herein, Grantor does hereby bind itself and its successors to
WARRANT AND FOREVER DEFEND all and singular the Property unto Grantee, Grantee's
successors and assigns, against every person whomsoever lawfully claiming or to
claim the same, or any part thereof, by, through or under Grantor, but not
otherwise; provided, however that this conveyance is made by Grantor and
accepted by Grantee

 

subject to: (a) all of the title exceptions revealed in or by the recorded
documents affecting the Property; (b) all matters that would be shown on an
accurate survey or by an inspection of the Property; and (c) all standby fees,
taxes and assessments by any taxing authority for the current and all subsequent
years, and all liens securing the payment of any of the foregoing.

 

EXECUTED AND DELIVERED the ____ day of ___________, 2014.

 

  GRANTOR:         By:     Name:     Title:  

 

Exhibit K
2

 

 

ACKNOWLEDGMENT

 

STATE OF TEXAS §   § COUNTY OF ____________ §

 

This instrument was acknowledged before me on ____________, 2014, by
________________, _______________________ of ___________________, the
____________________ of __________________________, a ___________________ on
behalf of said ________________.

 

  ________________________________   Notary Public for the State of Texas

 

Grantee's Address:

 

__________________________
__________________________
__________________________

 

After Recording, Return to:

 

__________________________
__________________________
__________________________

 

Exhibit K
3

 

 

EXHIBIT L

 

Form of Bill of Sale

 

BILL OF SALE

 

THIS BILL OF SALE ("Bill of Sale") is made this _____ day of _______, 2014 by
_________________, a ______________ ("Seller"), in favor of ______, a
_______________ ("Purchaser").

 

WITNESSETH:

 

WHEREAS, Seller and Purchaser entered into that certain Purchase and Sale
Agreement dated as of _________________ (the "Contract") with respect to the
sale of the Land identified on Exhibit A attached thereto and the Improvements
located thereon. (Any term with its initial letter capitalized and not otherwise
defined herein shall have the meaning set forth in the Contract.)

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Seller does hereby absolutely and
unconditionally give, grant, bargain, sell, transfer, set over, assign, convey,
release, confirm and deliver to Purchaser all of the Personal Property, but
specifically excluding the Excluded Personal Property.

 

THIS ASSIGNMENT IS MADE SUBJECT, SUBORDINATE AND INFERIOR TO THE PERMITTED
EXCEPTIONS (AS DEFINED IN THE CONTRACT). EXCEPT FOR THE REPRESENTATIONS,
WARRANTIES AND COVENANTS OF SELLER SET FORTH IN THE CONTRACT, PURCHASER
ACKNOWLEDGES AND AGREES THAT SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY
DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR
GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL
OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO:
(A) THE NATURE, QUALITY OR CONDITIONS OF THE PERSONAL PROPERTY, (B) THE
SUITABILITY OF THE PERSONAL PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH
PURCHASER MAY CONDUCT THEREON, (C) THE COMPLIANCE OF OR BY THE PERSONAL PROPERTY
OR ITS OPERATION WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY
APPLICABLE GOVERNMENTAL AUTHORITY OR BODY, (D) THE HABITABILITY, MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OF THE PERSONAL PROPERTY, OR (E) ANY OTHER
MATTER WITH RESPECT TO THE PERSONAL PROPERTY. EXCEPT FOR THE REPRESENTATIONS,
WARRANTIES AND COVENANTS OF SELLER SET FORTH IN THE CONTRACT, PURCHASER FURTHER
ACKNOWLEDGES AND AGREES THAT, HAVING BEEN GIVEN THE OPPORTUNITY TO INSPECT THE
PERSONAL PROPERTY, PURCHASER IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE
PERSONAL PROPERTY AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY
SELLER. PURCHASER FURTHER ACKNOWLEDGES AND AGREES, EXCEPT AS SET FORTH IN THE
CONTRACT, THAT THE SALE OF THE PERSONAL PROPERTY AS PROVIDED FOR HEREIN IS MADE
ON AN "AS IS, WHERE IS" CONDITION AND BASIS "WITH ALL FAULTS."

 

Exhibit L
1

 

 

This Bill of Sale shall be binding upon and inure to the benefit of the
successors, assigns, personal representatives, heirs and legatees of Purchaser
and Seller.

 

This Bill of Sale shall be governed by, interpreted under, and construed and
enforceable in accordance with, the laws of the State of Texas.

 

EXECUTED as of the date first written above.

 

  SELLER:                         By:     Name:     Its:                
PURCHASER:                         By:     Name:     Its:          

 

Exhibit L
2

 

 

EXHIBIT M

 

Form of Assignment of Permits and Licenses

 

ASSIGNMENT AND ASSUMPTION OF PERMITS AND LICENSES

 

______________, a _____________________ ("Assignor"), for good and valuable
consideration, the receipt and sufficiency of which are acknowledged, does
hereby transfer, assign and convey unto _______________________________________,
a ____________________ ("Assignee"), in accordance with the terms and provisions
of that certain Purchase and Sale Agreement dated as of ___________, 2014 (the
"Purchase Agreement"), by and between Assignor and Assignee, all Assignor’s
right, title and interest in and to the licenses and permits listed on Exhibit A
attached hereto (collectively, the "Permits") relating to the "Hotel Palomar
Dallas" located at 5300 and 5330 East Mockingbird Lane, Dallas, Texas and more
particularly described in the Purchase Agreement (the "Property").

 

Assignee hereby accepts and assumes and agrees to pay, perform and fulfill, from
and after the date hereof, all of the obligations of Assignor under each of such
Permits which first arise or accrue on or after the date hereof, which
obligations relate to the periods on or after the date hereof, but excluding any
obligations accruing prior to the date hereof and excluding any obligations
which relate to the period prior to the date hereof. Assignee covenants and
agrees to indemnify, hold harmless and defend Assignor from and against any and
all claims, suits, judgments, costs, expenses, losses or liabilities (including
without limitation reasonable attorneys’ fees and disbursements) suffered or
incurred by Assignor and arising out of Assignee’s failure to pay, perform or
fulfill any and all such obligations under such Permits first arising or
accruing on or after the date hereof.

 

This Assignment and Assumption shall be binding on and inure to the benefit of
Assignor and Assignee and their respective successors and assigns.

 

This Assignment and Assumption may be executed in counterparts, each of which
shall be deemed to be an original, and all of which when taken together
constitute one and the same instrument.

 

Exhibit N
1

 

 

 

IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this
Assignment and Assumption as of this ____ day of ____________ 2014.

 

"Assignor"     ,   a           By:     Name:     Title:  

 

"Assignee"     ,   a           By:     Name:     Title:  

 

 

Exhibit N
2

 

 

Exhibit A to Exhibit M

 

PERMITS

 

Permit Type   Issuer Occupancy   City of Dallas Sales and Use Tax   State of
Texas Mixed Beverage   State of Texas Mixed Beverage Late Hours   State of Texas
Beverage Cartage   State of Texas Catering   State of Texas Mini Bar   State of
Texas Liquor   Dallas County Beer/Wine/Liquor   City of Dallas Food Products
Establishment Central 214 Kitchen   City of Dallas Food Products Establishment
Banquet Kitchen   City of Dallas Food Products Establishment Central 214 Bar  
City of Dallas Elevator 62138   State of Texas Elevator 56399   State of Texas
Elevator 62928   State of Texas Elevator 68609   State of Texas Boiler 233206  
State of Texas Boiler 233207   State of Texas Boiler 233208   State of Texas
Boiler 241967   State of Texas Fire Permit, Flammable and Combustible Liquid  
City of Dallas Swimming Pool Permit   Held by Master Association

 

Exhibit N
3

 

  

EXHIBIT N

 

Form of Assignment of Service Contracts, Rooms Agreements and Equipment Leases

 

ASSIGNMENT AND ASSUMPTION OF SERVICE CONTRACTS, ROOMS AGREEMENTS AND EQUIPMENT
LEASES

 

______________, a _____________________ ("Assignor"), for good and valuable
consideration, the receipt and sufficiency of which are acknowledged, does
hereby transfer, assign and convey unto _______________________________________,
a ____________________ ("Assignee"), in accordance with the terms and provisions
of that certain Purchase and Sale Agreement dated as of ___________, 2014 (the
"Purchase Agreement"), by and between Assignor and Assignee, all Assignor’s
right, title and interest in and to (i) the Service Contracts listed on Exhibit
A attached hereto, (ii) the Rooms Agreements listed on Exhibit B attached hereto
and (iii) the Equipment Leases listed on Exhibit C attached hereto (as such
terms are defined in the Purchase Agreement) (the Service Contracts, the Rooms
Agreements and the Equipment Leases are collectively referred to herein as the
"Assigned Contracts") relating to the "Hotel Palomar Dallas" located at 5300 and
5330 East Mockingbird Lane, Dallas, Texas and more particularly described in the
Purchase Agreement (the "Property").

 

Assignee hereby accepts and assumes and agrees to pay, perform and fulfill, from
and after the date hereof, all of the obligations of Assignor under each of such
Assigned Contracts which first arise or accrue on or after the date hereof,
which obligations relate to the periods on or after the date hereof, but
excluding any obligations accruing prior to the date hereof and excluding any
obligations which relate to the period prior to the date hereof. Assignee
covenants and agrees to hold harmless and indemnify Assignor from and against
any and all claims, suits, judgments, costs, expenses, losses or liabilities
(including without limitation reasonable attorneys’ fees and disbursements)
suffered or incurred by Assignor and arising out of Assignee’s failure to pay,
perform or fulfill any and all such obligations under such Assigned Contracts
first arising or accruing on or after the date hereof.

 

This Assignment and Assumption shall be binding on and inure to the benefit of
Assignor and Assignee and their respective successors and assigns.

 

This Assignment and Assumption may be executed in counterparts, each of which
shall be deemed to be an original, and all of which when taken together
constitute one and the same instrument.

 

Exhibit N
4

 

IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this
Assignment and Assumption as of this ____ day of ____________ 2014.

 

"Assignor"     ,   a           By:     Name:     Title:  

 

"Assignee"     ,   a           By:     Name:     Title:  

 

Exhibit N
5

 

  

EXHIBIT O

 

Form of Assignment of Space Leases and Brackets Lease

 

ASSIGNMENT AND ASSUMPTION OF SPACE LEASES

 

______________, a _____________________ ("Assignor"), for good and valuable
consideration, the receipt and sufficiency of which are acknowledged, does
hereby transfer, assign and convey unto _______________________________________,
a ____________________ ("Assignee"), in accordance with the terms and provisions
of that certain Purchase and Sale Agreement dated as of ___________, 2014 (the
"Purchase Agreement"), by and between Assignor and Assignee, all Assignor’s
right, title and interest in and to (i) the Space Leases listed on Exhibit A
attached hereto and (ii) the Brackets Lease more particularly described on
Exhibit B attached hereto (as such terms are defined in the Purchase Agreement)
(the Space Leases and the Brackets Lease are collectively referred to herein as
the "Assigned Leases") relating to the "Hotel Palomar Dallas" located at 5300
and 5330 East Mockingbird Lane, Dallas, Texas and more particularly described in
the Purchase Agreement (the "Property").

 

Assignee hereby accepts and assumes and agrees to pay, perform and fulfill, from
and after the date hereof, all of the obligations of Assignor under each of such
Assigned Leases which first arise or accrue on or after the date hereof, which
obligations relate to the periods on or after the date hereof, but excluding any
obligations accruing prior to the date hereof and excluding any obligations
which relate to the period prior to the date hereof (other than the obligation
to refund any tenant or other deposits to the extent Assignee actually receives
a credit at Closing, for which Assignee shall be and remain fully liable (the
"Deposit Refund Obligations"). Assignee covenants and agrees to indemnify, hold
harmless and defend Assignor from and against any and all claims, suits,
judgments, costs, expenses, losses or liabilities (including without limitation
reasonable attorneys’ fees and disbursements) suffered or incurred by Assignor
and arising out of Assignee’s failure to pay, perform or fulfill (i) any and all
such obligations under such Assigned Leases first arising or accruing on or
after the date hereof and (ii) the Deposit Refund Obligations.

 

This Assignment and Assumption shall be binding on and inure to the benefit of
Assignor and Assignee and their respective successors and assigns.

 

This Assignment and Assumption may be executed in counterparts, each of which
shall be deemed to be an original, and all of which when taken together
constitute one and the same instrument.

 

Exhibit O
1

 

IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this
Assignment and Assumption as of this ____ day of ____________ 2014.

 

"Assignor"     ,   a           By:     Name:     Title:  

 

"Assignee"     ,   a           By:     Name:     Title:  

 

Exhibit O
2

 

EXHIBIT P

 

Form of Assignment of Consulting Agreement

 

ASSIGNMENT AND ASSUMPTION OF CONSULTING AGREEMENT

 

______________, a _____________________ ("Assignor"), for good and valuable
consideration, the receipt and sufficiency of which are acknowledged, does
hereby transfer, assign and convey unto _______________________________________,
a ____________________ ("Assignee"), in accordance with the terms and provisions
of that certain Purchase and Sale Agreement dated as of ___________, 2014 (the
"Purchase Agreement"), by and between Assignor and Assignee, all Assignor’s
right, title and interest in and to the Consulting Agreement (as defined in the
Purchase Agreement) relating to the "Hotel Palomar Dallas" located at 5300 and
5330 East Mockingbird Lane, Dallas, Texas and more particularly described in the
Purchase Agreement (the "Property").

 

Assignee hereby accepts and assumes and agrees to pay, perform and fulfill, from
and after the date hereof, all of the obligations of Assignor under the
Consulting Agreement which first arise or accrue on or after the date hereof,
which obligations relate to the periods on or after the date hereof, but
excluding any obligations accruing prior to the date hereof and excluding any
obligations which relate to the period prior to the date hereof. Assignee
covenants and agrees to indemnify, hold harmless and defend Assignor from and
against any and all claims, suits, judgments, costs, expenses, losses or
liabilities (including without limitation reasonable attorneys’ fees and
disbursements) suffered or incurred by Assignor and arising out of Assignee’s
failure to pay, perform or fulfill any and all such obligations under the
Consulting Agreement first arising or accruing on or after the date hereof.

 

This Assignment and Assumption shall be binding on and inure to the benefit of
Assignor and Assignee and their respective successors and assigns.

 

This Assignment and Assumption may be executed in counterparts, each of which
shall be deemed to be an original, and all of which when taken together
constitute one and the same instrument.

 

Exhibit P
1

 

IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this
Assignment and Assumption as of this ____ day of ____________ 2014.

 

"Assignor"     ,   a           By:     Name:     Title:  

 

"Assignee"     ,   a           By:     Name:     Title:  

  

CONSENT TO ASSIGNMENT

 

I hereby consent to this Assignment and Assumption this ______ day of
___________, 2014.

 

J Tesar LLC dba Tesar Restaurant Group a         By:     Name:     Title:    

 

Exhibit P
2

 

SCHEDULE 6.1(b)

 

Capital Expenditures

 

FF&E and Construction Costs      Lobby   18,525  Entry Hostess   30,760  Bar
Area   70,050  Private Dining Room   67,150  Main Dining/Expo   54,500  Side
Dining Area   46,480  Kitchen and Bar   29,500  Built in Furnishings   28,475 
Permits   4,000  Insurance   1,485  General Conditions (temp partitions) 
 45,590  Contractors Fee   39,651  Sales Tax   35,984  Total Construction Costs 
 472,150         Design and Development Costs      Design Fee   25,000  Chairs 
 15,600  Chairs at Private Dining   7,200  Counter Stools   4,200  Bar Stools 
 10,500  Decorative Lighting   10,000  Community Tables at Bar   7,700 
Community Tables at Main Dining   8,000  Tabletops   10,775  Bar Furnishings 
 21,308  Private Dining Furnishings   14,450  Kitchen Equipment and Smallwares 
 150,000  Total Development Costs   284,733         Patio and Lobby Design, FF&E
and Construction Costs      Design Fee   10,000  Construction and Furnishings 
 225,000  Total Patio and Lobby   235,000         Other      Uniforms   30,000 
Menu’s   2,500  Collateral   14,000  Web and Menu Design   8,500  Total Other 
 55,000  Contingency 10%   104,688         Grand Total   1,151,571 

 

 

Schedule 6.1(b)
1

 

SCHEDULE 13.11

 

Gift Certificates

 

[tex10-6pg72.jpg]

 

Schedule 13.11
1

 

 

[tex10-6pg73.jpg]

 

Schedule 13.11
2

 

 

[tex10-6pg74.jpg]

 

Schedule 13.11
3

 

 

[tex10-6pg75.jpg]

 

Schedule 13.11
4

 

  

[tex10-6pg76.jpg]

 

Schedule 13.11
5

 

 

[tex10-6pg77.jpg]

 

Schedule 13.11
6

 

 

[tex10-6pg78.jpg]

 

Schedule 13.11
7