Exhibit 10.1

 

PURCHASE AND SALE AGREEMENT

 

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made and entered into as
of January 30, 2013 (the “Effective Date”), by and among MOODY NATIONAL CY
SHADYSIDE S, LLC, a Delaware limited liability company (“Moody S”), and MOODY
NATIONAL CY SHADYSIDE MT, LLC, a Delaware limited liability company (“Moody MT”,
Moody S and Moody MT, collectively “Moody”), and CWI SHADYSIDE HOTEL, LLC, a
Delaware limited liability company (“CWI”).  Moody and CWI are sometimes
referred to collectively in this Agreement as the “Parties” and individually as
a “Party”.  Capitalized terms used herein and not otherwise defined shall have
the meaning set forth in Exhibit “A” attached hereto and incorporated by this
reference.

 

RECITALS:

 

A.           Moody S is the sole holder of the fee simple interest in the Real
Property (as defined below) and to that certain hotel located at 5308 Liberty
Avenue, Pittsburgh, Pennsylvania and currently operated as the “Courtyard
Pittsburgh Shadyside” (the “Hotel”).

 

B.           Pursuant to the terms of that certain Master Lease Agreement dated
March, 2008, by and between Moody S, as lessor, and Moody MT, as lessee (the
“Master Lease”), Moody S has leased the Real Property to Moody MT.

 

C.           Pursuant to the terms of that certain Agreement dated February 27,
2002 and that certain Lease dated February 27, 2002 by and between D.A.
Associates, LLC, a Pennsylvania limited liability company (“DA Associates”), and
CJV Associates, L.P., a Pennsylvania limited partnership (“CJV Associates”),
collectively, as landlord, and Sierra Liberty Associates, LLC, a Pennsylvania
limited liability company (“Sierra”), as tenant, as evidenced by that certain
memorandum of Lease dated February 27, 2002, and recorded in the Office of the
Recorder of Deeds of Allegheny County, Pennsylvania, in Deed Book Volume 11313,
Page 649; as amended by that certain unrecorded Amendment to Lease dated
March 15, 2004, by and between DA Associates, CJV Associates and Sierra; as
assigned to Moody S pursuant to that certain Assignment of Leasehold Interest
dated March 10, 2008 by and between DA Associates, CJV Associates, Sierra and
Moody S and recorded in the Office of the Recorder of Deeds of Allegheny County,
Pennsylvania in Deed Book Volume 13560, Page 235; as amended pursuant to that
certain Amendment Agreement dated March 20, 2008 by and between DA Associates,
CJV Associates and Moody S (collectively, the “Parking Lease”), relating to
off-site parking for the Hotel.

 

D.           Subject to the terms and conditions hereof, Moody desires to sell,
assign, transfer, convey and deliver to CWI, and CWI desires to acquire from
Moody, all of Moody’s right, title and interest in the Property, together with
all rights, benefits, privileges and appurtenances pertaining thereto, for such
consideration as is hereinafter set forth.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and certain other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:

 

ARTICLE 1

 

DEFINITIONS

 

 

1.1         Definitions.  Whenever used herein, all defined words and phrases,
unless the context otherwise requires, shall have the meanings assigned to each
as set forth and described on Exhibit “A” attached hereto.

 

ARTICLE 2

 

SALE AND PURCHASE OF PROPERTY

 

2.1         Purchase of Property.

 

2.1.1     Real Property. Subject to the terms and on the conditions set forth in
this Agreement, Moody S hereby covenants and agrees to sell and convey and CWI
agrees to purchase Moody S’ fee interest in the following assets (collectively,
the “Real Property”):

 

(a)          that land and all appurtenances thereto which is more particularly
described in Exhibit “B” hereto (the “Land”); and

 

(b)          the buildings, structures (surface and sub-surface), installations
and other improvements and fixtures as shall constitute real property located on
the Land.

 

2.1.2     Personal Property. In addition to the Real Property, and subject to
the terms and on the conditions set forth in this Agreement, Moody agrees to
sell and convey and CWI agrees to purchase the following assets (collectively,
the “Personal Property” and together with the Real Property, collectively known
as the “Property”):

 

(a)          all FF&E owned by Moody and located at, affixed or attached to the
Real Property or held in reserve storage for future use exclusively in
connection with the Hotel, including, without limitation, Moody’s interest as
lessee under an Equipment Lease with respect to any such items, subject to such
depletions, substitutions and replacements as shall occur and be made in the
ordinary course of business prior to the Closing Date;

 

(b)          all opened and unopened food and beverages whether in use or held
in reserve storage for future use exclusively in connection with the operation
of the Hotel (collectively, the “Consumables”);

 

(c)          all Supplies, whether in use or held in reserve storage for future
use in connection with the operation of the Hotel;

 

(d)          all service and maintenance contracts, supply contracts, and other
contracts or agreements (whether oral or written) relating to the maintenance,
operation, provisioning or equipping of the Hotel, together with all related
written warranties and guaranties, but excluding the Franchise Agreement and the
Management Agreement (collectively, the “Contracts”);

 

(e)          all of Moody’s right, title and interest in and to all equipment
leases set forth on Exhibit “C” (collectively, the “Equipment Leases”);

 

(f)           all of Moody’s books, records, files, computer data, operating
reports, plans and specifications and other documentation to the extent relating
to the ownership and operation of the Hotel, including the list of Hotel
Employees and records relating to the Bookings but excluding (A) the personnel
files and employment records for all Hotel Employees

 

 

(except for employees retained/rehired by CWI), (B) items that belong to or are
proprietary to Franchisor, Hotel Manager and either of their affiliates or other
third parties, (C) internal memoranda regarding the sale, financing and/or
valuation of the Hotel, and (D) materials and information that are covered by
the attorney-client privilege or any confidentiality agreement entered into by
or binding on Moody or their affiliates;

 

(g)          all contracts, reservations and sales files for the use or
occupancy of guest rooms of the Hotel (collectively, the “Bookings”) and the
aggregate amount of any deposits received by or on behalf of Moody (whether paid
in cash or by credit card) as a down payment for any Bookings (the “Advance
Deposits”);

 

(h)          all licenses, permits, consents, authorizations, approvals,
certificates of occupancy, ratifications, certifications, registrations,
exemptions, variances, exceptions and similar consents granted or issued by any
Governmental Authority, to the extent assignable or transferrable (collectively,
the “Permits”);

 

(i)           all of Moody’s right, title and interest in an to the Space Leases
(as defined herein);

 

(j)           all vehicles used in the operation of the Hotel including that
certain 2003 Chevy Extended Sports Van and that certain 2006 Chevy Uplander; and

 

(k)          all of Moody’s right, title and interest in and to, (1) all
intangible personal property used in connection with the ownership or operation
of the Hotel, including, without limitation, telephone numbers, post office
boxes, warranties and guaranties, signage rights, utility and development rights
and privileges, general intangibles; and (2) all websites and domains
exclusively used for the Hotel.

 

Notwithstanding the foregoing, if the fair market value of the Personal Property
exceeds fifteen percent (15%) of the fair market value of the Property, then CWI
shall have the right to assign its right to acquire such excess Personal
Property to a wholly-owned “taxable REIT subsidiary.”

 

2.1.3     Excluded Assets. The following items are expressly excluded from the
transaction contemplated by this Agreement (collectively, the “Excluded
Assets”):

 

(a)          any fixtures, personal property or intellectual property owned by
(i) third parties (including, without limitation, equipment lessors, suppliers,
vendors and licensors) under Contracts or Permits, (ii) Franchisor, (iii) Hotel
Manager, (iv) any Hotel Employees or (v) any guests or customers of the Hotel;

 

(b)          all data and information relating to guests or customers of any
hotel or lodging property (including condominium or interval ownership
properties) other than the Hotel that are owned, leased, operated, licensed or
franchised by Franchisor, Hotel Manager or an affiliate of either of them, or
any facility associated with such hotels or other properties (including
restaurants, golf courses and spas);

 

(c)          any Excluded Liabilities; and

 

(d)          any items expressly excluded from Section 2.1.2.

 

 

2.2         Purchase Price.  The total purchase price for the Property shall be
Twenty-Nine Million Eight Hundred Fifty Thousand Dollars ($29,850,000.00) (the
“Purchase Price”), as increased or decreased by prorations and adjustments
pursuant to and in accordance with this Agreement, and will be paid by CWI by
wire transfer of immediately available good funds to Escrow Agent on the Closing
Date.

 

2.3         Earnest Money.

 

2.3.1     Concurrently with the execution and delivery of this Agreement, CWI,
Moody and First American Title Insurance Company, as escrow agent (“Escrow
Agent”) have executed or will promptly execute escrow instructions (the “Escrow
Instructions”), the form of such Escrow Instructions being attached hereto as
Exhibit “D”.

 

2.3.2     No later than 5:00 p.m. (Eastern Time) three (3) business days after
the Effective Date, CWI shall deposit the sum of Seven Hundred Fifty Thousand
Dollars ($750,000) in cash as an earnest money deposit (together with any
interest earned thereon, the “Good Faith Deposit”) by wire transfer to Escrow
Agent.  If the Good Faith Deposit is not timely made, Moody may terminate this
Agreement at any time prior to receipt by the Escrow Agent of the Good Faith
Deposit, in which case this Agreement shall immediately terminate and neither
Party shall have any further obligation to the other Party hereunder, except
each Party shall continue to be obligated under the indemnity and other
provisions in this Agreement that survive termination (collectively, the
“Surviving Obligations”).

 

2.3.3     If the Due Diligence Period expires without CWI having terminated this
Agreement, then no later than 5:00 p.m. (Eastern Time) two (2) business days
after the expiration of the Due Diligence Period, CWI shall deposit an
additional Seven Hundred Forty-Two Thousand Five Hundred Dollars ($742,500) in
cash as an earnest money deposit (together with any interest earned thereon, the
“Second Deposit”) by wire transfer to Escrow Agent (the Good Faith Deposit and
the Second Deposit and any interest earned thereon are collectively referred to
herein as the “Earnest Money”).  Failure of CWI to make the Second Deposit as
required pursuant to this Section 2.3.3 shall be deemed a material default by
CWI under this Agreement and Moody shall have the right to immediately terminate
this Agreement whereupon this Agreement shall automatically terminate, Escrow
Agent shall promptly distribute the Good Faith Deposit to Moody and neither
party shall have any further obligation to the other party hereunder, except for
the Surviving Obligations.

 

2.3.4     The Earnest Money shall be delivered to, held and disbursed by Escrow
Agent in escrow in an interest-bearing account pursuant to the terms of this
Agreement and the Escrow Instructions. If the Closing occurs in accordance with
the terms and provisions of this Agreement, the Earnest Money shall be paid to
Moody and credited against the Purchase Price.  The Earnest Money shall be
immediately refunded to CWI if CWI elects to terminate this Agreement pursuant
to any of CWI’s rights to terminate as set forth in this Agreement or as the
result of any material default by Moody or a failure to satisfy any of the
conditions set forth in Section 6.1; provided, however, if the Closing does not
occur due to a material default of CWI under this Agreement, the Earnest Money
shall be subject to Section 5.1 of this Agreement.

 

2.4         Allocation.  The aggregate Purchase Price shall be allocated by CWI
between the Real Property and the Personal Property (and among the classes of
Personal Property) included within the Property as of the Closing Date in
accordance with the applicable provisions of Section 1060 of the IRC.  Moody and
CWI agree to file federal, state and local tax returns consistent with such
allocations agreed upon between the parties.  If CWI and Moody cannot agree upon
allocation

 

 

of the Purchase Price, each party shall file federal, state and local returns
based on each party’s own determination of the proper allocations of the
Purchase Price, each bearing its own consequences of any discrepancies.

 

2.5         Closing.  The consummation of the transactions contemplated by this
Agreement (the “Closing”) shall occur on or before March 7, 2013 (the “Closing
Date”).

 

2.6         Due Diligence.

 

2.6.1     The “Due Diligence Period” will commence on the Effective Date and
will expire on February 14, 2013.  CWI shall have the right, at reasonable times
and on reasonable prior notice to Moody, to enter upon the Hotel to conduct such
inspections, investigations, tests and studies as CWI shall deem reasonably
necessary (including, without limitation, environmental site assessments,
engineering tests and studies, physical examinations, feasibility studies  and
other due diligence investigations of the Hotel), provided that, any such
testing and/or investigations shall be performed in a manner that does not
unreasonably interfere with or impair the operations at the Hotel and no
intrusive drilling or testing shall be performed without Moody’s prior approval
(such approval not to be unreasonably withheld, conditioned or delayed).  Prior
to conducting any on-site inspection of the Hotel, other than mere visual
examination, CWI shall obtain, and during the period of such inspection or
testing shall maintain, at its expense, commercial general liability insurance,
including a contractual liability endorsement, and personal injury liability
coverage, which insurance policies must have limits for bodily injury and death
of not less than Two Million Dollars ($2,000,000) for any one occurrence and not
less than Two Million Dollars ($2,000,000) for property damage liability for any
one occurrence.  CWI shall indemnify, defend and hold harmless Moody and its
respective affiliates, subsidiaries, officers, directors, members, shareholders,
and agents from any Claims arising from or related to CWI’s or its agents or
contractors entry upon the Real Property for any inspections, investigations,
tests and studies, except (i) for the discovery of existing conditions at the
Hotel so long as following such discovery CWI does not materially exacerbate
such conditions through its actions; and (ii) to the extent caused by Moody or
the Hotel Manager, or any of their respective agents, employees or contractors.
After any such entry, CWI shall promptly restore the Hotel to its prior
condition, if its condition was changed by such entry. This Section 2.6.1 shall
survive the Closing and any termination of this Agreement.

 

2.6.2     During the Due Diligence Period, Moody shall use commercially
reasonable efforts to cooperate with CWI in connection with CWI’s investigations
and inspections of the Hotel and the conduct of the business thereon. Prior to
or within three (3) business days after the Effective Date, Moody shall provide
to CWI those documents listed and described on Exhibit “L” (the “Investigation
Documents”).  If Moody fails to produce any of the Investigation Documents, CWI,
as its sole remedy, may terminate the Agreement in accordance with Section 2.6.3
of this Agreement.

 

2.6.3     CWI may for any reason or no reason, in its sole and absolute
discretion, elect to terminate this Agreement by notice to Moody given on or
before the expiration of the Due Diligence Period whereupon (i) this Agreement
shall automatically terminate; (ii) the Escrow Agent shall immediately release
and return the Earnest Money to CWI; (iii) CWI shall pay all of the expenses of
escrow; and (iv) neither Party shall have any further obligation to the other
party hereunder, except each party shall continue to be obligated for the
Surviving Obligations.

 

2.7         Title.

 

 

2.7.1     At Moody’s sole cost and expense, Moody shall (i) promptly cause First
American Title Insurance Company (the “Title Company”) to deliver to CWI the
preliminary title report (the “Title Report”) with respect to the Hotel,
together with complete and legible copies of all instruments and documents
referred to therein (collectively, the “PTR Exceptions”), and (ii) deliver to
CWI its existing ALTA survey (the “ALTA Survey”) with respect to the Hotel and
all improvements thereon and thereto.  Prior the expiration of the Due Diligence
Period, CWI may, but shall not be obligated, at its sole cost and expense,
obtain an updated ALTA Survey, together with complete and legible copies of all
instruments and documents referred to therein (collectively, the “Survey
Exceptions”) (the PTR Exceptions and the Survey Exceptions are collectively
referred to herein as the “Title Exceptions”).  Notwithstanding Section 2.6.3
above, CWI may, in its sole and absolute discretion, elect to terminate this
Agreement by notice to Moody given on or before February 18, 2013 solely as the
result of the updated ALTA Survey identifying a title exception not previously
identified prior to the expiration of the Due Diligence Period which would
materially impair the value of the Property, whereupon (I) this Agreement shall
automatically terminate; (II) the Escrow Agent shall immediately release and
return the Earnest Money to CWI; (III) CWI shall pay all of the expenses of
escrow; and (IV) neither Party shall have any further obligation to the other
party hereunder, except each party shall continue to be obligated for the
Surviving Obligations.

 

2.7.2     From and after the Effective Date, Moody shall promptly bring to CWI’s
attention any Title Exceptions (including any violations of law or municipal
ordinances, orders, requirements or regulations noted in or issued by any
municipal and other governmental departments and agencies having jurisdiction
over or affecting the Hotel, the Property and any outstanding work orders and
requirements of any company insuring the Hotel against casualty loss) which
(i) are created by Moody, (ii) Moody receives written notice of, or (iii) are to
Moody’s Knowledge, and, in each case, which were not included in the PTR
Exceptions received by CWI pursuant to Section 2.7.2 (each, an “Intervening
Lien”).  To the extent that there exist any Intervening Liens other than the
Permitted Exceptions, Moody, at its expense, shall undertake all necessary
actions to remove any and all Intervening Liens existing as of the date of this
Agreement or arising hereafter and to cure any Intervening Liens (or
modifications of exceptions or encumbrances existing as of the date of this
Agreement) prior to Closing; provided, however, that in the event that any
Intervening Liens other than the Permitted Exceptions exist at Closing, CWI
shall have the right to terminate this Agreement and in the event of such
termination Escrow Agent shall immediately return the Earnest Money (including
all interest thereon) to CWI.

 

2.7.3     At the Closing, the Title Company shall be unconditionally and
irrevocably prepared to issue a 2006 ALTA Owner’s (6/17/06) extended coverage
policy of title insurance for the Property, in favor of CWI, dated as of the
Closing, insuring that the Property is vested in CWI, with a liability limit in
an amount equal to the mutually agreed upon value of the Real Property and
otherwise in the form and with those endorsements required by CWI with no
exceptions other than the respective Title Exceptions approved by CWI prior to
February 18, 2013 (in its sole and absolute discretion) (the “Permitted
Exceptions”) and each and every title insurance endorsements required by CWI
(which CWI shall notify the Title Company of prior to February 18, 2013), the
form of such endorsements being acceptable to CWI in its sole and absolute
discretion (the “Title Endorsements”), (collectively, the “Title Policy”) and
the cost of such Title Policy shall be paid by CWI.  For avoidance of doubt, CWI
shall have no right to terminate this Agreement after February 18, 2013 solely
as the result of the Title Company’s failure to remove any Title Exceptions or
issue any Title Endorsements (including an acceptable form of endorsement) which
were not identified prior to February 18, 2013, excluding any Intervening Liens.

 

 

2.8         New Franchise Agreement.  Within three (3) business days after the
Effective Date, CWI shall submit a franchise application to Franchisor, together
with all required related documents and submittals.  From and after the
Effective Date, CWI shall work in good faith using commercially reasonable
efforts to cause Franchisor to commit in writing, in form and substance
reasonable acceptable to the parties, to at Closing: (i) terminate the Franchise
Agreement, with no cost, expense or liability to Moody or any of their
affiliates and to release each of them from any and all obligation therewith
(pursuant to a release in form and substance delivered by Franchisor in the
ordinary course of business under substantially similar circumstances); and
(ii) allow CWI to receive a license to operate the Hotel as a Courtyard by
Marriott hotel after the Closing pursuant to a new franchise agreement in the
form and substance acceptable to CWI (in CWI’s reasonable discretion)
(collectively, the “Franchisor Approval”).  If Franchisor has not granted
Franchisor Approval by the expiration of the Due Diligence Period, CWI shall
have an additional fifteen (15) day period (the “Franchisor Approval Period”)
solely to allow CWI to obtain the Franchisor Approval; provided CWI shall be
obligated to (a) deposit the Second Deposit in accordance with Section 2.3.3,
and (b) notify Moody in writing, prior to the expiration of the Due Diligence
Period, of its intent to utilize the Franchisor Approval Period.  Upon receipt
of the Franchisor Approval during the Franchisor Approval Period, (i) the
Franchisor Approval Period shall automatically expire, and (ii) CWI shall have
no further right to terminate this Agreement pursuant to Section 2.6.3.  If CWI
has not obtained the Franchisor Approval by the last day of the Franchisor
Approval Period, (1) this Agreement shall automatically terminate, (2) the
Escrow Agent shall immediately release and return the Earnest Money to CWI,
(3) CWI shall pay all of the expenses of escrow and (4) neither Party shall have
any further obligation to the other Party hereunder, except for the Surviving
Obligations.  For avoidance of doubt, the Franchisor Approval Period shall in no
way act as an extension of the Closing Date.

 

ARTICLE 3

 

REPRESENTATIONS AND WARRANTIES

 

3.1         Moody’s Representations and Warranties.  Moody hereby represents and
warrants to CWI that all Recitals set forth above are true, correct and complete
and, further, as follows:

 

3.1.1     Moody has the right and authority to execute and deliver this
Agreement and all documents now or hereafter to be executed by it pursuant to
this Agreement, to contribute, transfer and convey the Property to CWI and to
perform its obligations hereunder.

 

3.1.2     As of the Effective Date, the Permitted Exceptions, and except as set
forth on Schedule 3.1.2 (referred to therein and herein as “Approved
Liabilities”), neither Moody nor any of its Affiliates have (i) entered into any
contractual or other obligations or liabilities of any kind (whether written or
oral) with respect to the Hotel or any other Property; or (ii) excluding
non-material obligations made in the ordinary day-to-day course of business,
otherwise incurred any monetary or other obligations of any kind whatsoever with
respect to the Hotel or any other Property which have not been performed, paid
or otherwise satisfied in full.

 

3.1.3     Moody has filed or caused to be filed (on a timely basis since its
inception) all Tax Returns required to be filed on or prior to December 31,
2012, unless otherwise extended in accordance with all applicable Laws, with
respect to the operations of the Hotel with the appropriate Governmental
Authorities and all such Tax Returns are true, correct and complete in all
material respects.  On or before Closing, Moody shall have paid (or otherwise
escrowed with the Title Company) all Taxes, including penalties and interest
that are due on or have accrued through the Closing.  On or before Closing, all
sales and use taxes required to be paid or collected by Moody

 

 

in the ownership of the Hotel and the operation of the Hotel (collectively,
“Sales Taxes”) have been or will be collected and paid, in the ordinary course
of business, to the appropriate Governmental Authority through the Effective
Date.  Except as set forth in Schedule 3.1.7, there are no (i) actions currently
pending or, to Moody’s Knowledge, threatened against the Hotel by any
Governmental Authority for the assessment or collection of Taxes; (ii) audits or
other examinations in progress nor has the Hotel nor Moody been notified in
writing of any request for examination; or (iii) claims for assessment or
collection of Taxes that have been asserted in writing against Moody.  There are
no outstanding agreements, waivers or consents extending the statutory period of
limitations applicable to any Taxes of Moody, and Moody has not requested any
extensions of time within which to file any Tax Return.

 

3.1.4     Excluding the satisfaction by Moody of any mortgage encumbering the
Property and the terms and conditions of the Franchise Agreement, the transfer
and delivery of the Property to CWI as provided hereunder and the performance by
Moody of its obligations under this Agreement will not conflict with or result
in the breach of any of the terms of any Permit, agreement or other instrument
to which Moody, or any of its Affiliates, is a party or is otherwise bound.

 

3.1.5     Neither Moody nor any of its members or managers, has made, filed or
suffered, with respect to any Person or entity, (i) made or threatened to make a
general assignment for the benefit of creditors; (ii) filed any voluntary
petition in bankruptcy or suffered the filing of an involuntary petition in
bankruptcy by its creditors; (iii) suffered the appointment of a receiver to
take possession of all or substantially all of its assets; (iv) suffered the
attachment or other judicial seizure of all or substantially all of its assets;
(v) admitted in writing its inability to pay its debts as they became due; or
(vi) made an offer of settlement, extension or composition to its creditors
generally.

 

3.1.6     Neither Moody nor any of its Affiliates is (i) listed on the Specially
Designated Nationals and Blocked Persons List or any other similar list
maintained by the Office of Foreign Assets Control, Department of the Treasury
or the Department of Foreign Affairs and International Trade (Canada), pursuant
to any authorizing statute, executive order or regulation; (ii) a “specially
designated global terrorist” or other person listed on Appendix A to Chapter V
of 31 C.F.R., as the same has been from time to time updated and amended; or
(iii) a Person either (a) included within the term “designated national” as
defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515; or
(b) designated under Sections 1(a), 1(b), 1(c) or 1(d) of Executive Order
No. 13224, 66 Fed. Reg. 49079 (published September 25, 2001) or a person
similarly designated under any related enabling legislation or any other similar
Executive Orders.

 

3.1.7     Except as set forth on Schedule 3.1.7, there is no litigation
currently affecting the Property and the Hotel (including, without limitation,
personal injury or property damage, or breach of contract), and neither Moody
nor any of its Affiliates has been served with, nor received any notice
threatening, any lawsuit, litigation, arbitration, condemnation or other
proceedings with regard to or which would materially affect the Property and the
Hotel.

 

3.1.8     Except as set forth on Schedule 3.1.8, neither Moody nor any Affiliate
thereof has received written notice from any Governmental Authority declaring
that, the Property and/or the Hotel is in violation of any applicable federal,
state and local Laws, ordinances and regulations (including, without limitation,
those regarding zoning, land use, building, fire, health, safety, environmental,
subdivision, water quality, sanitation controls and the Americans with
Disabilities Act of 1990, as amended).

 

 

3.1.9     None of Moody or any of their respective affiliates has any employees
with respect to the ownership, operation or maintenance of the Property. 
Neither Moody nor, to Moody’s Knowledge, Hotel Manager are parties to any
written employment agreement, collective bargaining agreement or compensation
agreement.  To Moody’s Knowledge, there are no union organization efforts
pending or threatened with respect to any employees.

 

3.1.10   Schedule 3.1.10 contains true, correct and complete list of all
Contracts (i) with an annual cost per contract or agreement in excess of Ten
Thousand Dollars ($10,000) per annum to which or by which Moody, the Hotel or
any other Property may be bound; (ii) with a term of greater than twelve (12)
months; or (iii) which cannot be terminated by the Hotel owner upon not more
than thirty (30) days written notice and without payment of any fee or penalty. 
Moody has provided CWI with true, correct and complete copies of all written
Contracts (including all amendments and/or modifications thereto) and, to
Moody’s Knowledge, all Contracts are in full force and effect.  Neither Moody
nor any of its Affiliates have delivered or received a written notice of breach
or default under any Contract which has not been cured and to Moody’s knowledge,
there exists no breach, default, or event or condition which, the giving of
notice or the passage of time, or both, would constitute such a breach of
default under any such Contract which has not been cured.  Except for a
termination of a Contract resulting from an uncured material default thereunder,
neither Moody nor any Affiliate shall terminate any Contracts without obtaining
the prior written consent of CWI, which consent shall not be unreasonably
withheld or delayed.

 

3.1.11   Schedule 3.1.11 contains a true, correct and complete list of all
leases, concessions or occupancy agreements in effect by which any of the
Property or assets may be bound (collectively, the “Space Leases”).  Moody has
provided CWI with true, correct and complete copies of all Space Leases
(including all amendments and/or modifications thereto) and all Space Leases are
in full force and effect.  Neither Moody nor any Affiliates thereof (including,
without limitation, Hotel Manager), has delivered or received a written notice
of breach or default under any Space Lease which has not been cured and to
Moody’s knowledge, there exists no breach, default, or event or condition which,
the giving of notice or the passage of time, or both, would constitute such a
breach of default under any such Space Lease which has not been cured.  Moody
shall not terminate any such Space Leases without obtaining the prior written
consent of CWI, which consent shall not be unreasonably withheld or delayed. 
All deposits required to have been delivered to the under all Space Leases have
been delivered and are currently being held by Moody or its Affiliates or
designees, as applicable.

 

3.1.12   Schedule 3.1.12 contains a true, complete and correct list of all
Permits Moody maintains for the ownership, management, occupancy, leasing and
operation of the Hotel in the manner currently operated, which Permits have been
issued to Moody and/or Hotel Manager and are in full force and effect.  Neither
Moody nor any Affiliate thereof has received written notice of any material
violations of any Permit and to Moody’s Knowledge, no violation or other event
has occurred that, with the giving of notice or the passage of time or both,
would constitute an event for which a violation notice could be given has
occurred under any Permit which has not been cured.

 

3.1.13   To Moody’s Knowledge, the existing insurance policies on the Property
are in full force and effect and no written notice of cancellation has been
received by Moody with respect to any such policy and to Moody’s Knowledge, none
is threatened; and no such policy requires notice to and/or the consent of any
insurance company to continue providing such existing coverage after the Closing
of the transactions contemplated in this Agreement.

 

 

3.1.14   Neither Moody nor any Affiliate thereof has received written notice
from any Governmental Authority declaring that the Hotel is in violation (in any
material respect) of applicable building codes or zoning laws, or any other
applicable Laws (including, without limitation, those regarding land use, fire,
health, safety, environmental, subdivision, water quality, sanitation controls
and the Americans with Disabilities Act of 1990, as amended).  To Moody’s
Knowledge, there exists no structural or other material defect or damage in or
to such portions of the Property, whether latent or otherwise, which will impair
the value of or adversely affect its use or the business operations conducted
thereon.  Neither Moody nor any Affiliate thereof, has delivered or received a
written notice of non-compliance with respect to any building codes, zoning laws
or other applicable Law (including, without limitation, those regarding land
use, fire, health, safety, environmental, subdivision, water quality, sanitation
controls and the Americans with Disabilities Act of 1990, as amended) and, to
Moody’s Knowledge, no violation has occurred that, with the giving of notice or
the passage of time or both, would constitute an event for which a violation
notice could be given has occurred which has not been cured.

 

3.1.15   Except as set forth on Schedule 3.1.15, any and all construction
contracts or development agreements for the performance of any work on,
improvement at or for the benefit of, the Hotel entered into by Moody or any of
its Affiliates prior to the Effective Date have been terminated or completed and
fully paid, and there is no amount remaining to be paid under any such
construction contracts or development agreements, nor to Moody’s Knowledge, is
any liability or obligation with respect thereto that is reasonably likely to be
or become, or give rise to a claim of, lien against the Hotel and/or the
Property.

 

3.1.16   Except as set forth in the Environmental Reports (as defined below) or
on Schedule 3.1.16, neither Moody nor any Affiliates thereof, have used, stored,
disposed of or released (or permitted to be used, stored, disposed of or
released) Hazardous Materials at the Hotel, except for such Hazardous Materials
as are used in the ordinary course of business of the Hotel in accordance with
Environmental Laws.  Neither Moody nor any Affiliates thereof have received any
written notice of any pending or threatened Action or proceeding arising out of
the environmental condition of the Hotels, Hazardous Materials located on the
land beneath the Hotel, or any alleged violation of Environmental Law and, to
Moody’s knowledge, no event has occurred that, with the giving of notice or the
passage of time or both, would constitute an event for which a notice of any
pending or threatened Action or proceeding is reasonably likely to be given.

 

3.1.17   Schedule 3.1.10 contains true, correct and complete list of all
Equipment Leases.  Moody has provided CWI with true, correct and complete copies
of all Equipment Leases (including all amendments and/or modifications thereto)
and all Equipment Leases are in full force and effect and Moody has not entered
into any agreements which waive, modify, compromise or amend any of the
provisions thereof.  Neither Moody nor any of its Affiliates have delivered or
received a written notice of breach or default under any Equipment Leases which
has not been cured and to Moody’s knowledge, there exists no breach, default, or
event or condition which, the giving of notice or the passage of time, or both,
would constitute such a breach of default under any such Equipment Leases which
has not been cured.  Except for a termination of an Equipment Lease resulting
from an uncured material default thereunder, neither Moody nor any Affiliate
shall terminate any Equipment Lease without obtaining the prior written consent
of CWI, which consent shall not be unreasonably withheld or delayed.

 

3.1.18   There are no pending eminent domain or condemnation actions with
respect to the Hotel and/or any part thereof, and Moody has not received written
notice of any such threatened or contemplated eminent domain or condemnation
action.

 

 

 

 

3.1.19   The liquor licenses issued by Pennsylvania Liquor Control Board are
held by Moody MT with respect to the Hotel, and each respective liquor license
is in full force and effect and there is no investigation pending by the
Pennsylvania Liquor Control Board and there has been no event or omission which
will threaten the continued effectiveness of such liquor licenses or, to Moody’s
knowledge, threatened by Pennsylvania Liquor Control Board.  The consummation of
the transactions contemplated under this Agreement, including, without
limitation, the transfer of the Hotel and the Property, do not interfere with
the continued and uninterrupted operation of the Hotel generally or the
continued effectiveness of any and all applicable liquor licenses specifically. 
Moody and/or its Affiliates have taken all requisite action, filed all necessary
documents (if any) and fulfilled all requirements of the Pennsylvania Liquor
Control Board in connection with the issuance of the above referenced liquor
licenses to CWI or its designee.

 

For purposes of this Section 3.1, “to Moody’s Knowledge” shall mean the actual
knowledge of Brett Moody and David Gould, without duty of inquiry or
investigation.

 

In the event Michael G. Medzigian, Michael C. Coolidge, Gil Murillo and/or
Patrick Vyncke obtain actual knowledge (with no duty of inquiry or
investigation) on or before Closing of any material inaccuracy in any of the
representations and warranties contained in this Section 3.1, CWI may as its
sole and exclusive remedy either: (i) terminate this Agreement whereupon this
Agreement shall automatically terminate and Escrow Agent shall promptly
distribute the Earnest Money to CWI, and neither party shall have any further
obligation to the other party hereunder, except for the Surviving Obligations;
or (ii) waive any and all claims against Moody on account of such inaccuracy and
close the transaction.  In the event Michael G. Medzigian, Michael C. Coolidge,
Gil Murillo and/or Patrick Vyncke obtain actual knowledge (with no duty of
inquiry or investigation) before the expiration of the Due Diligence Period of
any inaccuracy in any of the representations and warranties contained in this
Section 3.1, and CWI does not terminate this Agreement on or before the
expiration of the Due Diligence Period, CWI shall be deemed to have waived any
and all claims against Moody on account of such inaccuracy (including the right
to terminate this Agreement following the expiration of the Due Diligence
Period).  The provisions of this Section 3.1 shall survive the Closing.

 

3.2         CWI’s Representations and Warranties.  CWI hereby represents and
warrants to Moody, as of the date hereof, as follows:

 

3.2.1     CWI is a limited liability company duly organized, validly existing
and in good standing under the laws of the State of Delaware.

 

3.2.2     CWI has the right and authority to execute and deliver this Agreement
and all documents now or hereafter to be executed by it pursuant to this
Agreement to perform its obligations hereunder.

 

3.2.3     The performance by CWI of its respective obligations under this
Agreement will not conflict with or result in the breach of any of the terms of
any agreement or instrument to which CWI is a party or is otherwise bound, and
no consent from third parties are required for the performance of any
obligations hereunder.

 

3.2.4     Neither CWI nor any of its Affiliates is (i) listed on the Specially
Designated Nationals and Blocked Persons List or any other similar list
maintained by the Office of Foreign Assets Control, Department of the Treasury
or the Department of Foreign Affairs and International Trade (Canada), pursuant
to any authorizing statute, executive order or regulation; (ii) a “specially
designated global terrorist” or other person listed on Appendix A to Chapter V
of 31

 

 

C.F.R., as the same has been from time to time updated and amended; or (iii) a
Person either (a) included within the term “designated national” as defined in
the Cuban Assets Control Regulations, 31 C.F.R. Part 515; or (b) designated
under Sections 1(a), 1(b), 1(c) or 1(d) of Executive Order No. 13224, 66 Fed.
Reg. 49079 (published September 25, 2001) or a person similarly designated under
any related enabling legislation or any other similar Executive Orders.

 

3.3         Update of Representations and Warranties.  Each of the Parties’
respective representations and warranties set forth in Sections 3.1 and 3.2
shall be deemed to have been remade at and as of the Closing Date.

 

3.4         Survival.  The representations and warranties made in this Agreement
shall not merge into any instrument delivered at the Closing but shall survive
Closing for a period of twelve (12) months (the “Survival Period”).

 

3.5         Covenants of Moody.  Moody covenants and agrees that, until the
earlier of the termination of this Agreement or the Closing, Moody shall:

 

(a)          at all times from and after the Effective Date until the Closing,
conduct its business and operate the Hotel only in a manner consistent with the
past practices of the Hotel, and in the ordinary course of business;

 

(b)          use its commercially reasonable efforts to maintain the levels of
inventories of FF&E and Supplies at the Hotel at the values or quantity as of
the Effective Date; provided, however, inventories of terry and linen shall in
no event be less than a par level of three (3) (the “Baseline Inventory Level”),
subject in each case, to the sale and replacement of the Consumable Inventory in
the normal and ordinary course of operations at the Hotel;

 

(c)          timely make all repairs, maintenance, and replacements to keep the
Hotel (including, but not limited to, all FF&E and all other Personal Property)
in good operating condition consistent with past practices, and not commit any
waste of any portion of the Hotel;

 

(d)          continue to take guest reservations and to book functions and
meetings and otherwise to promote the business of the Hotel in generally the
same manner as it did during the twelve (12) months prior to the Effective Date;

 

(e)          pay all Sales Taxes due on or which have accrued through the
Closing in respect of the operations and use of the Hotel; and

 

(f)           not take the following actions unless Moody has obtained the prior
written consent of CWI (which consent may be granted or withheld in CWI’s sole
and absolute discretion):

 

(i)           sell, refinance or otherwise transfer or otherwise dispose of any
Property or any other interest in the Hotel other than contemplated by this
Agreement;

 

(ii)          execute, modify or terminate, or waive any material rights or
remedies with respect to any single contract or other commitment of any kind
(expressly excluding group bookings or other reservation contracts or
commitments in the ordinary course of business) in excess of Ten Thousand
Dollars ($10,000) or which is not terminable (without fee or penalty) upon
thirty (30) days’ prior notice;

 

 

(iii)         cause or permit the removal of any Personal Property from the
Hotel except for the purpose of discarding worn and valueless items that have
been replaced with personal property of equal or greater quality;

 

(iv)         grant options or rights to acquire any interest in the Hotel;

 

(v)          take any action or execute any agreement that would interfere with
or contravenes, or failing to take any action as may be required under
applicable laws, for the valid and effective consummation of the transactions
provided for in this Agreement;

 

(vi)         fail to pay on a current basis all payables which are due and owing
as well as any and all obligations and liabilities, fixed or contingent, which
are due and owing, including, without limitation, tax obligations;

 

(vii)       incur any indebtedness or additional material liabilities (whether
contingent or absolute, matured or un-matured, known or unknown) secured by any
interest in the Hotel, except for trade debt incurred in the ordinary course of
business;

 

(viii)      fail to make any payments which are due and owing in connection with
the operation and maintenance of the Hotel; or

 

(ix)         grant any easement, covenant, lien or other encumbrance affecting
title to the Hotel.

 

(g)          Moody agrees to promptly deliver to CWI all of the audit request
materials listed on Exhibit “E”; provided, however, Moody shall deliver all such
materials within its possession (or which are otherwise reasonably accessible to
CWI as of the Effective Date) not later than February 7, 2013; provided further,
Moody acknowledges and agrees to use its good faith efforts to also provide such
additional information which is deemed relevant and reasonably necessary (as
reasonably determined by CWI) to enable CWI and its accountants to prepare
financial statements in compliance with (i) Rule 3-05 of Regulation S-X of the
Securities and Exchange Commission which audit will commence immediately upon
Closing and which is required to be completed and filed with the Securities and
Exchange Commission within seventy-five (75) days after Closing; (ii) any other
rule issued by the Securities and Exchange Commission and applicable to CWI; and
(iii) any registration statement, report or disclosure statement filed with the
Securities and Exchange Commission by, or on behalf of, CWI.  Notwithstanding
the foregoing, Moody shall engage (at CWI’s sole cost and expense) McGladrey LLP
to commence any and all such required audits.  Moody acknowledges and agrees
that the foregoing is a representative description of the information and
documentation that CWI and its accountants may require in order to comply with
(i), (ii) and (iii) above.  In connection with the foregoing post-Closing
audit(s), and in furtherance of Moody’s obligations to assist CWI pursuant to
this Section, Moody covenants and agrees to execute and deliver to McGladrey LLP
the audit representation letters, the form of which are attached hereto as
Exhibit “F” (each, an “Audit Representation Letter”), provided that the form of
such Audit Representation Letters may be modified as required to account for any
issues identified during the audit.  Moody’s obligations under this
Section 3.5(g) shall survive the Closing for a period of twelve (12) months.

 

3.6         Condition of the Property.

 

3.6.1     CWI EXPRESSLY ACKNOWLEDGES AND AGREES THAT, AS A MATERIAL PART OF THE
CONSIDERATION FOR THIS AGREEMENT, THE PROPERTY

 

 

IS BEING SOLD TO CWI IN AN “AS IS, WHERE IS” CONDITION AS OF THE CLOSING WITH NO
REPRESENTATIONS OR WARRANTIES FROM MOODY, EITHER EXPRESS OR IMPLIED, EXCEPT FOR
THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN
ANY OTHER DOCUMENTS TO BE DELIVERED BY MOODY TO CWI AT CLOSING.  CWI agrees that
CWI is not relying upon, and has not received or been given, any representations
(except for the representations and warranties expressly set forth in this
Agreement or in any other documents to be delivered by Moody to CWI at Closing),
statements or warranties (oral or written, implied or express) of or by any
officer, employee, agent or representative of Moody, or any salesperson or
broker (if any) involved in this transaction, as to the Property or any part or
component thereof in any respect, including, but not limited to, any
representations, statements or warranties as to the physical or environmental
condition of the Property, the fitness of the Property for use as a hotel, the
financial performance or potential of the Property, the compliance of the
Property with applicable building, zoning, subdivision, environmental, life
safety or land use laws, codes, ordinances, rules, orders, or regulations, or
the state of repair of the Property, and CWI, for itself and its heirs, legal
representatives, successors and assigns, waives any right to assert any claim or
demand against Moody at law or in equity relating to any such matter, whether
latent or patent, disclosed or undisclosed, known or unknown, now existing or
hereafter arising.  Except for any title or survey matters created by Moody in
breach or default of this Agreement and/or matters resulting from Moody’s fraud
or intentional failure to disclose any such matters to Moody’s Knowledge, CWI
agrees that it shall have no recourse whatsoever against Moody, at law or in
equity, should the ALTA Survey or the Title Policy fail to disclose any matter
affecting the Property or reveal any such matter in an inaccurate, misleading or
incomplete fashion or otherwise be in error.  CWI acknowledges that it shall
review the ALTA Survey and the Title Policy (as same may be marked at Closing)
and to discuss their contents with the independent contractors who prepared or
issued each of them.  CWI accordingly agrees to look solely to the preparer of
the ALTA Survey and/or the Title Company, as applicable for any claim arising
out of or in connection with such instruments and hereby releases Moody from any
such claim (except for such claims for which Moody is expressly liable pursuant
to the terms of this Agreement and/or for or any claim that Moody agrees to cure
as set forth in this Agreement).

 

3.6.2     CWI recognizes that the Hotel and Personal Property are not new and
that there exists a possibility that the Property is not in compliance with the
requirements which would be imposed on a newly constructed hotel by presently
effective federal, state and local building, plumbing, electrical, fire, health,
handicap, environmental and life safety laws, codes, ordinances, rules, orders
and/or regulations (collectively, the “building codes”).  Except for the
representations and warranties expressly set forth in this Agreement or in any
other documents to be delivered by Moody to CWI at Closing, Moody makes no
representation, warranty, or guaranty of any kind with respect to the compliance
of the Property with applicable Law, any building codes and/or whether the Hotel
and other improvements on the Real Property may contain substances or materials
no longer permitted to be used in newly constructed buildings including, without
limitation, asbestos or other insulation materials, lead or other paints,
wiring, electrical, or plumbing materials and may not contain other materials or
equipment required to be installed in a newly constructed building.  CWI has had
the opportunity, to review the results of such investigations and inspections of
the Property as CWI deemed necessary with respect to all such matters and except
for the representations and warranties expressly set forth in this Agreement or
in any other documents to be delivered by Moody to CWI at Closing, CWI agrees to
accept and shall accept the Property in an “AS-IS, WHERE IS” condition and at
Closing to accept and assume the risk of noncompliance of the Property with all
such building codes.  Except for the representations and warranties expressly
set forth in this Agreement or in any other documents to be delivered by Moody
to CWI at Closing, CWI waives any right to excuse (except as specifically set
forth in this Agreement) or delay

 

 

performance of its obligations under this Agreement or to assert any claim
against Moody (before or after Closing) arising out of any failure of the
Property to comply with any such building codes.

 

3.6.3     Except for the representations and warranties expressly set forth in
this Agreement or in any other documents to be delivered by Moody to CWI at
Closing, it is specifically understood and agreed by Moody and CWI that Moody
does not make, and shall not be deemed to have made, any representation,
warranty or covenant with respect to (i) any Environmental Laws that may affect
any of the Property or (ii) the presence or absence of any Hazardous Materials
or in, on, above, under or about any of the Property (“Environmental
Conditions”).  From and after Closing, except for a breach by Moody of its
representations and warranties expressly set forth in this Agreement or in any
other documents to be delivered by Moody to CWI at Closing, CWI agrees for
itself and for its heirs, successors and assigns, to waive all other rights
under any Environmental Laws to require Moody to remediate or “clean up” the
Property and releases Moody from any liability of any kind or nature arising
with respect to any Environmental Conditions at the Property.  CWI acknowledges
and agrees that:  (a) CWI is an experienced and sophisticated owner of real
property; (b) CWI has expressly negotiated the limitations of liability
contained in this Section; and (c) the limitations contained in this Section are
reasonable.  CWI acknowledges and agrees that Moody has agreed to enter into
this Agreement in consideration for and in reliance upon the foregoing
limitations of liability, and that the consideration under this Agreement is
based in part on the limitations of liability.

 

3.6.4     The provisions of this Section 3.6 shall survive Closing.

 

ARTICLE 4

 

TRANSFER TAX, PRORATIONS AND OTHER CLOSING COSTS

 

4.1         Transfer Taxes; Reserves.  If the Alleghany County, City of
Pittsburgh or any other Governmental Authority determines that documentary
transfer taxes or similar fees or taxes (“Transfer Taxes”) are due in connection
with the transactions contemplated hereby (when considered individually or when
considered with any prior transfers of any direct or indirect ownership or other
individual interests in the Hotel), Moody and CWI shall each be responsible for
payment of one-half (1/2) of the amount of such Transfer Taxes at Closing.  CWI
shall file all necessary Tax Returns with respect to all Transfer Taxes.

 

4.2         Prorations; Credits and Adjustments.

 

4.2.1     All assets and liabilities of the Hotel, determined in accordance with
the Uniform System (provided that all non-Hotel assets and liabilities, if any,
shall be determined in accordance with generally accepted accounting
principles), shall be prorated (whether or not Moody or the Hotel shall have
been invoiced therefor prior to the Cut-Off Time) as of 12:01 a.m. Eastern
Daylight Time on the Closing Date (the “Cut-Off Time”).  In connection with the
foregoing:

 

(a)          Moody has prepared a proforma of the accounting for the transaction
that reflects how items subject to proration will be accounted for (the “Draft
Closing Statement”).  The Draft Closing Statement reflects Moody’s good faith
estimate of all of the prorations, credits and/or other adjustments to be made
at Closing, a copy of which is attached hereto as Exhibit “G”; and

 

 

(b)          Not later than five (5) business days prior to the Closing, Moody
shall update the Draft Closing Statement and cause a preliminary statement of
prorations and adjustments required under this Section 4.2 or under any other
provisions of this Agreement to be prepared and delivered to CWI for CWI’s
review, with such supporting documentation as the Parties hereto may reasonably
require being attached thereto (the “Preliminary Closing Statement”); and

 

(c)          On the day prior to Closing, CWI and Moody will conduct
inventories, examinations and audits of the Property as may be necessary to
verify and/or make revisions to the Preliminary Closing Statement based on such
audits, examinations and inventories, and on the night preceding the Closing
immediately after the Cut-Off Time, CWI and Moody will make all final
adjustments necessitated by such nights’ operations and prepare a final
statement of prorations and adjustments required under this Section 4.2 with
such supporting documentation as the Parties hereto may reasonably require being
attached thereto (the “Closing Statement”).

 

All prorations reflected on the Draft Closing Statement and the Preliminary
Closing Statement shall be made on the basis of the actual number of days in the
year and month in which the Closing occurs or in the period of computation.

 

4.2.2     The following shall be prorated as of the Cut-Off Time:

 

(a)          expenses and other amounts payable under any Contracts;

 

(b)          costs and expenses related to construction, capital improvement and
other similar work performed at the Hotel prior to the Cut-Off Time;

 

(c)          utility charges (including, without limitation, charges for phone
service, cable television, gas, water, sewer and electricity);

 

(d)          installments of municipal and other governmental improvement liens
and special assessments;

 

(e)          periodic license and permit fees;

 

(f)           revenues and expenses from any Hotel guest rooms and facilities
(other than those set forth in clause (h) below) occupied on the evening
immediately preceding the Cut-Off Time, including any Sales Taxes, room taxes
and other taxes charged to guests in such rooms and all parking charges
allocable to such rooms with respect to the evening immediately preceding the
Cut-Off Time, shall be divided 50:50 between Moody and CWI (where a complete
meeting package (“CMP”) guest is staying on a CMP rate, the food and beverage
revenues shall be allocated based on whether the applicable meal or service
occurred before or after the Cut-Off Time); provided, however, that to the
extent that either Moody or Hotel Manager, as applicable, records in the
ordinary course the times at which food and beverage sales, telephone, facsimile
or data communication, in-room movie, laundry, and other services are ordered by
guests, then the same shall be prorated when orders for the same were received. 
All revenues from restaurants and other service operations conducted at the
Hotel shall be prorated based on whether the same accrued before or after the
Cut-Off Time as described in the preceding sentence.  The revenues referred to
in this clause (g) are referred to collectively as “guest revenues”;

 

(g)          revenues and expenses from conferences, receptions, meetings, and
other functions occurring in any conference, banquet or meeting rooms in the
Hotel, including

 

 

usage charges and related taxes, food and beverage sales, valet parking charges,
equipment rentals, and telecommunications charges, shall be prorated based on
when the function took place.  The revenues referred to in this clause (h) are
referred to collectively as “conference revenues”;

 

(h)          the Rooms Ledger;

 

(i)           expenses for food and beverages and reserve stock of linens,
towels, paper goods, soaps, cleaning and other supplies delivered prior to
midnight;

 

(j)           prepaid rents and prepaid room receipts and deposits, function
receipts and deposits and other reservation receipts and deposits (including the
amount of unredeemed gift certificates, if any);

 

(k)          retail sales (including any tax on the sale of any Personal
Property effected pursuant to this Agreement), occupancy and liquor taxes and
like impositions accrued as of the Cut-Off Time;

 

(l)           revenue relating to the common areas of the Hotel;

 

(m)         revenue (after the settlement of applicable commissions and/or
costs) relating to vending machines in the Hotel;

 

(n)          all till money, cash-on-hand, and all sums in house banks for the
Hotel, in which case all right, title and interest to the till money,
cash-on-hand and house banks shall be assigned and conveyed by Moody to CWI and
Moody shall receive a credit equal to the amount thereof, provided that, if
Moody and CWI cannot mutually agree upon the amount of the till money,
cash-on-hand and house banks, the provisions of this clause (o) shall be
inapplicable and title to the till money, cash-on-hand and house banks shall
remain with Moody;  and

 

(o)          such other items as are usually and customarily prorated between
buyers and sellers of hotel properties in the area where the Hotel is located.

 

4.3         Utilities.  All suppliers of utilities shall be instructed by Moody
to read meters or otherwise determine the charges owing as of the Closing for
services prior thereto, which charges shall be allocated and, as mutually
determined by the Parties, (i) be credited in an amount thereto to CWI at
Closing; or (ii) allocated to and paid by Moody prior to or at Closing.

 

4.4         Inventories.  In the event that the inventories taken by Moody and
CWI of the FF&E and Supplies immediately prior to Closing reveal deficiencies in
the levels thereof against the respective Baseline Inventory Level, CWI shall
receive a credit against the Purchase Price equal to the amount of such
deficiency as mutually and reasonably determined by CWI and Moody. 
Alternatively, in the event that the inventories taken by Moody and CWI of the
FF&E and Supplies immediately prior to Closing reveal a surplus in the levels
thereof against the respective Baseline Inventory Level, CWI shall purchase such
excess (and, with respect to Consumables inventory, unopened surplus)
inventories from Moody at a price equal to the cost thereof.  Stale or expired
food and beverage or Consumables that are no longer marketable will not be
included in the closing inventories.

 

4.5         Taxes and Assessments.

 

 

4.5.1     The Parties hereby agree that all sales and/or compensating use taxes
imposed upon or due in connection with the transactions contemplated hereunder
by any Governmental Authority, if any, shall be paid by Moody.  Moody shall file
all necessary tax returns with respect to all such taxes.

 

4.5.2     Except as otherwise provided in this Agreement, from and after the
date hereof, Moody shall indemnify and defend and hold  CWI harmless from and
against (i) any and all taxes due and payable by CWI for any tax period ending
on or before the Closing (a “Pre-Closing Tax Period”); (ii) except as provided
in Sections 4.5.3 and 4.5.4  below, any and all taxes due and payable by Moody
for a taxable period beginning prior to the day of the Closing and ending after
the day of the Closing (the “Straddle Period”) which are allocable to
Pre-Closing Tax Period, and (iii) all reasonable out-of-pocket third party costs
and expenses, including reasonable legal fees and expenses, attributable to any
item for which indemnification is provided in clauses (i) – (ii) above. With
respect to a Straddle Period, taxes of Moody, other than taxes in Sections 4.5.3
and 4.5.4 below, allocable to the Pre-Closing Tax Period shall be computed as if
such taxable period ended on and included the day of the Closing; provided that
exemptions, allowances or deductions that are calculated on an annual basis
shall be allocated between the portion of the Straddle Period ending on the day
of the Closing and the portion of the Straddle Period ending after the day of
the Closing in proportion to the number of days in each such period.

 

4.5.3     All unpaid real estate and personal property taxes and other
assessments (including, without limitation, special assessments and improvement
assessments) levied against the Property for a Straddle Period shall be prorated
at Closing. Moody shall be responsible for all real property taxes and personal
property taxes and other assessments for the tax periods ending on or prior to
the day of the Closing and for the portion of the Straddle Period through the
day of the Closing  and shall indemnify and defend and hold CWI harmless from
and against such taxes, and CWI shall be responsible for all real property taxes
and personal property taxes and other assessments for the tax periods beginning
after the day of the Closing and for the portion of the Straddle Period after
the day of the Closing and shall indemnify and defend and hold Moody harmless
from and against any such taxes.  If the amount of any such taxes is not
ascertainable at Closing, the proration for such taxes shall be estimated based
on the most recent available bill; provided, however, that after the Closing,
Moody and CWI shall re-prorate the taxes and pay any deficiency in the original
proration to the other party promptly upon receipt of the actual bill for the
relevant taxable period. In the event that the Property or any part thereof
shall be or shall have been affected by an assessment or assessments which are
payable in installments, Moody shall, at the Closing, be responsible for any
installments due prior to the Closing and CWI shall be responsible for any
installments due on or after the Closing, provided that such assessments shall
in any event be prorated between CWI and Moody as of the Cut-Off Time.

 

4.5.4     CWI and Moody each acknowledge that certain taxes and assessments
accrue and are payable to the various local governments by any business entity
operating a hotel and its related facilities. Included in those taxes and
assessments may be business and occupation taxes, retail sales taxes, gross
receipts taxes, and other special lodging or hotel taxes and assessments. For
purposes of this Agreement, all of such taxes and assessments (expressly
excluding (x) taxes and assessments covered in Section 4.5.3 of this Agreement,
which shall be governed by the provisions of such Section, and (y) corporate
franchise taxes, and federal, state and local income taxes) (hereinafter
referred to as “Operational Taxes”) shall be allocated between Moody and CWI
such that those attributable to the period ending on or prior to the day of the
Closing shall be allocable to Moody and those attributable to the period
beginning after the day of the Closing shall be allocable to CWI (with the
attribution of such taxes and assessments hereunder to be done in a manner
consistent with the attribution under this Agreement of the applicable

 

 

revenues on which such taxes and assessments may be based). CWI shall receive a
credit for any Operational Taxes attributable to the Straddle Period through the
day of the Closing which Moody has not paid.  Except for the Operational Taxes
for which (and in the amount for which) CWI has received a credit under this
Section 4.5.4,  Moody shall be solely responsible for payment of the Operational
Taxes with respect to any tax period ending on or prior to the day of the
Closing and the Straddle Period through the day of the Closing and shall
indemnify and defend and hold CWI harmless from and against such Operational
Taxes, and CWI shall be solely responsible for payment of Operational Taxes with
respect to any tax period beginning after the day of the Closing and the
Straddle Period beginning after the day of the Closing (and those for which  and
in amount for which it receives a credit) and shall indemnify and defend and
hold Moody harmless from and against such Operational Taxes.

 

4.6         Post-Closing Prorations.

 

4.6.1     If accurate prorations cannot be made at Closing because current bills
are not obtainable (as, for example, in the case of utility bills), the Parties
shall prorate such revenue or expenses at Closing on the best available
information, subject to adjustment upon receipt of the final bill or other
evidence of the applicable revenue or expense.  Moody’s obligation to pay the
Excluded Liabilities in full shall survive the Closing of the transaction
contemplated by this Agreement.  If the Parties are unable to agree on any
prorated items required to be contained in the Closing Statement at Closing, the
Closing shall occur and a preliminary closing statement shall be signed with
respect to such amounts and issues that are agreed upon by the Parties.  If any
refund of any water rates and charges, sewer rents or similar items is issued
after the Cut-Off Time for any period that includes the period prior to the
Cut-Off Time, then such refund shall be applied as follows: first, to the cost
incurred in obtaining such refund (and appropriately prorated based on the
portion of said costs incurred prior to and after the Closing), and second, the
balance of such refund, if any, shall be prorated as of the Cut-Off Time.  The
provisions of this Section 4.6.1 shall survive the Closing.

 

4.6.2     Any prorations hereunder which cannot be finally determined as of
Closing shall be re-prorated ninety (90) days after Closing to the extent
possible consistent with the procedures set forth in Sections 4.2, 4.3, 4.4 and
4.5.  In the event that such re-proration results in an increase to the amount
of Excluded Liabilities (the “Excess Liability Amount”), Moody will be
responsible for making up any such underpayment by making a payment to CWI equal
to such Excess Liability Amount within five (5) business days after such final
determination.  In the event that such re-proration results in a decrease to the
amount of Excluded Liabilities, CWI will be responsible for making up any such
overpayment by reimbursing Moody in the amount equal to such overpayment within
five (5) business days after such final determination.

 

4.7         Accounts Payable; Accounts Receivable.  All obligations and
liabilities (for services and materials ordered, or otherwise) and accounts
payable for the Hotel and the Real Property owing as of the Closing for
merchandise, equipment, tour agents’ and travel agents’ commissions,
advertisements, supplies and other materials and services shall be prorated
between Moody and CWI as of the Closing Date.  Moody shall receive a credit for
all prepaid expenses.  At the Closing, Moody shall deliver to CWI an update of
Moody’s accounts receivable list.  Thereafter, CWI shall promptly remit to Moody
all sums received by CWI in payment of any of Moody’s accounts receivables.  All
sums received by CWI from a customer, guest or patron owing Moody under a Moody
account receivable shall be credited, first, to the sums owing Moody, and then,
to the extent any sums remain, to CWI.  For a period of twelve (12) months after
the Closing Date, Moody shall have the right, from time to time, to inspect and
audit the books and records of the Hotel that pertain to income and collections,
at Moody’s sole cost and expense, and CWI shall

 

 

provide reasonable access thereto to Moody upon not less than three (3) business
days prior written notice, to verify receipt and payment of Moody’s accounts
receivable.

 

4.8         Brokers; Commissions.  Moody represents and warrants to CWI that,
except for Hodges Ward Elliott, Inc., Moody has not dealt with any real estate
broker in connection with this transaction, nor has Moody been introduced to CWI
by any real estate broker.  CWI represents and warrants to Moody that CWI has
not dealt with any other real estate broker in connection with this transaction,
nor has CWI been introduced to the Hotel or to Moody by any other real estate
broker.  Each Party shall indemnify, defend and hold harmless the other from and
against any Claims, suits, demands or liabilities of any kind or nature
whatsoever arising on account of the claim of any Person, firm or corporation to
a real estate brokerage commission or a finder’s fee or other similar
compensation as a result of having dealt with such Party and/or its Affiliates
in connection with this transaction.  The provisions of this Section 4.8 shall
survive the Closing and any termination of this Agreement.

 

4.9         Closing Costs.  Except as otherwise expressly provided in this
ARTICLE 4, or elsewhere in this Agreement, Moody and CWI shall be responsible
for paying all of their own respective costs and expenses incurred thereby in
connection with the transactions contemplated herein; provided, however, Moody
shall receive a credit against the Purchase Price at Closing in the amount of
Fifty Thousand Dollars ($50,000) in consideration for certain mutually agreed
upon closing costs which CWI has agreed to reimburse Moody for.

 

4.10       Disputes.  Any dispute between the Parties as to the monetary amount
of any such revenues or expenses (the “Disputed Amounts”) shall be resolved by
binding arbitration conducted by an Expert mutually approved by CWI and Moody,
provided that, in the event that the Parties are unable to agree upon an Expert
within such period, the Expert shall be appointed by JAMS within two
(2) business days thereafter.  Any arbitration shall be conducted pursuant to
the JAMS’ Comprehensive Arbitration Rules and Procedures (the “Rules”);
provided, that no discovery shall be permitted other than pursuant to
Rule 17(a) of the Rules.  Each Party shall promptly, and in no event later than
seven (7) days following appointment of the Expert, submit to the Expert their
respective positions with respect to the Disputed Amounts, including their
specific valuations or other proposed amounts in connection therewith.  The
Expert shall be instructed by the Parties to use its best efforts to make a
reasoned final written determination within seven (7) days after the Parties
submit in writing (or have had the opportunity to submit in writing but have not
submitted) their positions as to the Disputed Amounts, final and binding on the
Parties, of the Disputed Amounts presented to it.  The Expert shall rely solely
on such written submissions by the Parties with respect to the matters at issue
and shall not undertake an independent investigation.  In rendering its decision
and any award with respect to any item, the Expert shall be permitted to choose
only between the respective amounts or other position set forth by CWI or Moody,
and shall not be permitted to render a decision that does not conform in all
respects with either CWI’s or Moody’s respective amounts or other relief
sought.  No Party (or any of their respective Affiliates or representatives)
shall have any ex parte communications or meetings with the Expert without the
prior consent of the other Party.  As part of the award, the Expert shall
designate the Party whose position is upheld, and such prevailing Party shall
recover from the other Party all of its reasonably attorneys’ fees, costs and
expenses, including its share of the fees and costs paid to the Expert, expert
witness fees, compensation for in-house counsel, and all other fees, costs and
expenses incurred in connection with the resolution of the Dispute.

 

ARTICLE 5

 

REMEDIES

 

 

5.1         CWI’s Default.  In the event that CWI does not terminate this
Agreement prior to the expiration of the Due Diligence Period, and CWI,
thereafter, in breach of this Agreement (e.g., without the material breach or
default by Moody under this Agreement or the failure of a condition to close
hereunder), fails to close the transaction contemplated under this Agreement on
the Closing Date, then within five (5) business days after written notice of
such breach from Moody (which five (5) business days shall, if necessary,
automatically extend the Closing Date to the expiration of such five
(5) business day period), Moody shall be entitled to terminate this Agreement
and retain the Earnest Money, which retention thereof (together the collection
of reasonable attorneys’ fees incurred in connection therewith) shall be Moody’s
sole and exclusive remedy under this Agreement, at law or in equity, for such
breach of default to close the transaction contemplated under this Agreement. 
THE PARTIES HAVE DISCUSSED THE POSSIBLE CONSEQUENCES TO MOODY IN THE EVENT THAT
THE CLOSING FAILS TO OCCUR AS A RESULT OF CWI’S BREACH OR DEFAULT UNDER THIS
AGREEMENT.  THE PARTIES HAVE DETERMINED AND HEREBY AGREE THAT IT WOULD BE
IMPRACTICAL OR EXTREMELY DIFFICULT TO FIX THE ACTUAL DAMAGES TO MOODY OCCURRING
IN THE EVENT OF CWI’S BREACH OR DEFAULT UNDER THIS AGREEMENT AND THE PARTIES,
HAVING MADE DILIGENT BUT UNSUCCESSFUL ATTEMPTS TO ASCERTAIN THE ACTUAL
COMPENSATORY DAMAGES PCI WOULD SUFFER IN THE EVENT OF CWI’S MATERIAL DEFAULT
HEREUNDER, HEREBY AGREE THAT A REASONABLE ESTIMATE OF SUCH DAMAGES IS AN AMOUNT
EQUAL TO THE EARNEST MONEY DEPOSITED WITH ESCROW AGENT, AND IN THE EVENT THIS
TRANSACTION FAILS TO CLOSE DUE TO CWI’S BREACH OR DEFAULT UNDER THIS AGREEMENT,
MOODY SHALL BE ENTITLED TO RECEIVE AND RETAIN THE SAME AS FULLY AGREED
LIQUIDATED DAMAGES.  MOODY WAIVES ANY AND ALL RIGHT TO SEEK OTHER RIGHTS OR
REMEDIES AGAINST CWI, INCLUDING, WITHOUT LIMITATION, SPECIFIC PERFORMANCE.  THE
PAYMENT AND RETENTION OF THE EARNEST MONEY DEPOSITED WITH ESCROW AGENT AS
LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY, BUT IS INTENDED
TO CONSTITUTE LIQUIDATED DAMAGES TO MOODY.  UPON ANY SUCH BREACH OR DEFAULT AND
FAILURE TO CLOSE BY CWI HEREUNDER, THIS AGREEMENT SHALL BE TERMINATED AND
NEITHER PARTY SHALL HAVE ANY FURTHER RIGHTS OR OBLIGATIONS HEREUNDER, EACH TO
THE OTHER, EXCEPT FOR THE RIGHT OF MOODY TO RETAIN SUCH EARNEST MONEY AND
RECOVER ANY AMOUNTS MOODY IS ENTITLED TO UNDER SECTION 9.17, AND EXCEPT AS
EXPRESSLY PROVIDED ABOVE. THE PARTIES AGREE THAT, UNDER THE CIRCUMSTANCES OF
THIS TRANSACTION AND THE MARKETPLACE AT THE TIME HEREOF, THIS LIQUIDATED DAMAGES
PROVISION IS REASONABLE AND IN ACCORDANCE WITH CALIFORNIA LAW.

 

_____________________

____________________

MOODY’S INITIALS

CWI’S INITIALS

 

5.2         Moody’s Default.  In the event any breach or default by Moody under
this Agreement (including a breach by Moody of any of its representations and
warranties hereunder or Moody’s failure or refusal to perform its obligations
hereunder), then CWI, as its sole remedy for a pre-Closing default, may elect as
its sole and exclusive remedy either to (i) terminate this Agreement by written
notice to Moody whereupon Escrow Agent shall immediately return the Earnest
Money and obtain reimbursement from Moody of CWI’s actual (and reasonably
verifiable) out of pocket expenses incurred in this transaction not to exceed
One Hundred Twenty-Five Thousand Dollars ($125,000); or (ii) maintain an action
for specific performance; provided that, in the event CWI elects to maintain an
action for specific performance, (a) CWI shall provide written

 

 

notice to Moody of CWI’s intention thereto, and (b) CWI’s claim for specific
performance shall be filed against Moody on or before sixty (60) days following
the Closing Date, failing which, CWI shall be barred from enforcing the
obligations by specific performance.  In the event that a court prohibits
specific performance or CWI fails to file its claim within the sixty (60) day
period set forth in the immediately preceding sentence, CWI may pursue a claim
for monetary damages in an amount not to exceed CWI’s actual (and reasonably
verifiable) out of pocket expenses incurred in this transaction not to exceed
One Hundred Twenty-Five Thousand Dollars ($125,000).

 

5.3         Post Closing Rights and Remedies.  Subject to Section 5.5 below,
Moody and CWI shall have the right to exercise all rights and remedies available
at law or in equity (including, without limitation, actual, consequential and
other damages) with respect to any breach or default under this Agreement that
occurs or that is otherwise discovered after the Closing.

 

5.4         Indemnification.

 

5.4.1     CWI hereby acknowledges, covenants and unconditionally, absolutely and
irrevocably agrees to appear, indemnify, protect, defend and hold harmless, as
well as reimburse, Moody and its Affiliates and their respective parents,
Affiliates, shareholders, officers, directors, members, partners, trustees,
agents, representatives and employees to the fullest extent provided by law,
from and against, and for, any and all liability, claims, acts, actions, causes
of actions, claims for relief, judgments, executions, counts, suits,
proceedings, demands, lawsuits, claims of indemnity, expenses, pre-litigation
procedures, accounts, reckonings, controversies, or any combination of the same,
of any nature whatsoever, whether at law or equity, whether arising out of, from
or under foreign, federal, state, and/or local law, statute, ordinance,
regulation, common law, or any other source of law, whether sounding in contract
or tort, or pursuant to statutory remedy, brought by or otherwise commenced on
behalf of any third party (collectively, “Claims”), and all actual,
out-of-pocket and/or, subject to the terms of this Agreement, economic damages,
liabilities, any amounts reasonably incurred to settle any Claims, and losses
(including, without limitation, reasonable attorneys’ fees and costs, including
litigation expenses incurred successfully defending allegations of intentional
misconduct)(collectively, “Losses”) (but in all cases without duplication with
respect to any and all payments made by or on behalf of Indemnitor for a breach
or default (including, without limitation, payments made with respect to the
underlying obligations in order to cure such a breach or default, but expressly
excluding payments made with respect to any intentional breach or default) under
the certificates and declarations provided to the Title Company in connection
with the Closing hereunder (but excluding in either case, fraud or intentional
misrepresentation by CWI (to the extent caused by CWI’s actions)), to the extent
the Closing occurs and such Claims and Losses result from the use, management,
operation, rental, maintenance and ownership of the Property, based upon acts,
conduct or omissions occurring on or after the Closing, but expressly excluded
any Claims or Losses for which CWI is entitled to indemnification for pursuant
to Section 5.4.2 below.

 

5.4.2     Moody Management Corporation (“Indemnitor”) hereby acknowledges,
covenants and unconditionally, absolutely and irrevocably agrees to appear,
indemnify, protect, defend and hold harmless, as well as reimburse, CWI and its
Affiliates and their respective parents, Affiliates, shareholders, officers,
directors, members, partners, trustees, agents, representatives and employees
(collectively, the “Related Parties”) to the fullest extent provided by law,
from and against, and for, any and all Claims, and all Losses (but in all cases
without duplication with respect to any and all payments made by or on behalf of
Indemnitor for a breach or default (including, without limitation, payments made
with respect to the underlying obligations in order to cure such a breach or
default, but expressly excluding payments made with respect to any intentional
breach or default) under the certificates and declarations provided to the Title
Company in connection with

 

 

the Closing hereunder (but excluding in either case, fraud or intentional
misrepresentation by Moody (to the extent caused by Moody’s actions)), to the
extent the Closing occurs and such Claims and Losses result from any of the
following (collectively, the “Indemnity Obligations”): (i) any and all Excluded
Liabilities; and (ii) any breach or default by Moody of this Agreement
including, without limitation, the representations and warranties of Moody
contained in, and as limited under, this Agreement (the “Representations and
Warranties”).

 

5.4.3     In the event that any party making a Claim shall commence or file any
lawsuit or proceeding (individually or collectively, a “Proceeding”) against CWI
or any of the Related Parties, which Proceeding is reasonably likely result in
any Claim subject to indemnification under this Section 5.4, then Indemnitor
shall either, at its option and within ten (10) business days after notice by
CWI to Indemnitor of the filing or commencement of any such Proceeding, promptly
pay all amounts and otherwise take whatever commercially reasonable actions
necessary to dismiss the Proceeding with prejudice; or undertake the defense
thereof by counsel chosen by Indemnitor and approved by CWI (which approval
shall not be unreasonably withheld or delayed), in which case (i) Indemnitor
shall be obligated to contest and/or defend CWI or any of the Related Parties
against such Proceeding, at Indemnitor’s sole cost and expense, and shall keep
CWI apprised of the current status of such Proceeding at all times;
(ii) Indemnitor shall be liable to CWI for all reasonable costs, and expenses
(including, without limitation, reasonable attorneys’ fees, disbursements, and
court costs in connection therewith) actually incurred by CWI in connection with
such Proceeding; (iii) CWI shall cooperate in all reasonable respects with
Indemnitor (at Indemnitor’s sole cost and expense) in the contest and/or defense
of such Proceeding; (iv) Indemnitor shall promptly send to CWI copies of any
material documents received by either Indemnitor or any Related Parties which
relate to such Proceeding; and (v) CWI (or its agent or representative) shall
have the right but not the obligation to attend meetings and/or conference calls
(including, without limitation, with  such parties and the attorneys and/or
representatives retained by Indemnitor and such parties) and to otherwise
monitor any such Proceedings.  Notwithstanding the foregoing, (a) if the joint
representation of CWI or the Related Parties (where CWI or the Related Parties
are specifically named as parties to the applicable Proceeding) will create
either an actual or potential conflict of interest in the defense of a Claim
which conflict is unreasonable to waive, including, without limitation, arising
under rules of professional responsibility applicable to legal counsel jointly
representing CWI or the Related Parties, or material and reasonable divergence
of business or litigation interests among the joint clients with respect to
strategies or objectives in defending the Claim, or potential liability exposure
in connection with such Claim; (b) if CWI reasonably determines that Indemnitor
does not have the financial wherewithal to satisfy its respective Indemnity
Obligations in any material  manner; or (c) if Indemnitor fails to (A) make one
of the requisite elections under clauses (a) or (b) of this Section 5.4.3 prior
to the expiration of such ten (10) business day period; or (B) in any way
satisfy the foregoing requirements and obligations of this Section 5.4.3, CWI
shall have the right, at Indemnitor’s sole cost and expense, to take whatever
commercially reasonable actions are necessary to dismiss the Proceeding or to
contest and/or defend itself and the Related Parties against such Proceeding,
provided that CWI shall keep Indemnitor apprised of the current status of such
Proceeding at all times.  In connection therewith, Indemnitor covenants and
agrees to pay in advance, all reasonable costs and expenses (including, without
limitation, reasonable attorneys’ fees, disbursements, and court costs in
connection therewith) actually incurred by CWI in connection with such
Proceeding.  Nothing contained in the foregoing or elsewhere in this Agreement
shall apply to, or otherwise cause Indemnitor to pay for, any costs or expenses,
including attorneys’ fees, incurred by CWI or the Related Parties in connection
with any cross-complaint or other Claims which may be brought by CWI or the
Related Parties with respect to the matters which are the subject of any such
Proceeding or otherwise.

 

 

5.4.4     Indemnitor shall absolutely, irrevocably and unconditionally be liable
for the Indemnity Obligations as a primary obligor. Indemnitor agrees to the
provisions of this Agreement, and hereby irrevocably and unconditionally waives
(i) notice of acceptance of this Agreement; (ii) notice of any amendment or
extension of this Agreement; (iii) notice of the occurrence of any breach or
default under this Agreement; (iv) notice of CWI’s transfer or disposition of
the Indemnity Obligations, or any part thereof; (v) any defense based upon any
statute or rule of law which provides that the obligation of a surety must be
neither larger in amount nor in any other respects more burdensome than that of
a principal; (vi) any defense based upon any election, in any proceeding
instituted under Title 11 of the United States Code (the “Federal Bankruptcy
Code”), of the application of Section 1111(b)(2) of the Federal Bankruptcy Code
or any successor statute; or (vii) except as set forth herein, presentment,
demand, protest and notice of any kind; and Indemnitor agrees that nothing
contained herein shall prevent CWI from exercising any rights available to it
hereunder and that the exercise of any of the aforesaid rights shall not
constitute a legal or equitable discharge of Indemnitor.  Indemnitor hereby
authorizes and empowers CWI to exercise, in its respective sole discretion, any
rights and remedies, or any combination thereof, which may then be available
under this Agreement, since it is the intent and purpose of Indemnitor that the
Indemnity Obligations hereunder shall be absolute, independent and unconditional
under any and all circumstances.

 

5.4.5     Unless otherwise provided in this Agreement, the amount(s) of any
Claims incurred by CWI, Indemnity Obligations and/or reimbursable expenses due
and owing to CWI shall be paid to CWI by Indemnitor within thirty (30) days of a
written demand therefor made by CWI upon Indemnitor.

 

5.4.6     Subject to Section 9.17 below, Indemnitor agrees that, with or without
notice or demand, Indemnitor shall reimburse CWI for all reasonable costs and
expenses (including, without limitation, reasonable attorneys’ fees,
disbursements and court costs) incurred by CWI in connection with the
enforcement of this Section 5.4, or in any Action or Proceeding brought by CWI
against Indemnitor to enforce the Indemnity Obligations or any other obligation
of Indemnitor under this Agreement, such reimbursement to be made with thirty
(30) days of a written demand therefor.  If Indemnitor fails to so pay all or
any sums due hereunder, the amount of such sums payable by Indemnitor to CWI
shall bear interest from the date such amount is payable hereunder at a rate
equal to the prevailing prime interest rate as published in The Wall Street
Journal plus three percent (3%) per annum (but in no event to exceed the highest
permissible legal rate of interest), until CWI receives payment in full
(including accrued and unpaid interest thereon).

 

5.4.7     Each reference herein to CWI shall be deemed to include CWI’s
successors and assigns.  Indemnitor shall not, in any event or under any
circumstance, have the right, without obtaining the prior written approval of
CWI (which approval may be granted or withheld in CWI’s sole and absolute
discretion), to assign or transfer Indemnitor’s obligations and liabilities
under this Agreement, in whole or in part, to any other Person, party or
entity.  Nothing contained in this Section 5.4 shall be deemed to release,
reduce or otherwise modify the obligations of Indemnitor under this Agreement.

 

5.4.8     If any Party hereto shall be a partnership and/or limited liability
company, the agreements and obligations on the part of Indemnitor herein
contained shall remain in full force and effect notwithstanding any changes in
the individuals composing the partnership and/or the limited liability company,
and the term “Indemnitor” shall include any altered or successive
partnerships/limited liability companies, but the predecessor
partnerships/limited liability companies shall not hereby be released from any
obligation or liability hereunder.

 

 

5.4.9     Except as provided otherwise herein, no delay on the part of CWI in
exercising any right or remedy under this Agreement, or failure to exercise the
same, shall operate as a waiver in whole or in part of any such right or
remedy.  No notice to or demand on Indemnitor shall be deemed to be a waiver of
the obligations of Indemnitor or of the right of CWI to take further action as
provided in this Agreement.

 

5.4.10   Indemnitor acknowledges that this Agreement, and Indemnitor’s
obligations hereunder, are and shall at all times be absolute and unconditional
in all respects, and is and shall at all times be valid and enforceable
irrespective of any modification, impairment, abatement, reduction, release or
limitation, in whole or part, of any obligation of Indemnitor pursuant to an
order by a bankruptcy court or other court of competent jurisdiction in any
proceeding brought under the Federal Bankruptcy Code, it being expressly
acknowledged and agreed by Indemnitor that if any such modification, impairment,
abatement, reduction, release or limitation, in whole or part, is so ordered in
any such proceeding, Indemnitor’s obligations under this Agreement will
nevertheless continue to be determined as if such order had not been issued. 
This Agreement shall at all times thereafter remain effective in regard to any
payments or other transfers of assets to CWI received from or on behalf of
Indemnitor under or in respect of the Indemnity Obligations which are held
voidable on the grounds of preference, fraudulent conveyance or otherwise. 
Indemnitor’s obligations under this Agreement shall remain in full force and
effect without regard to, and shall not be impaired or affected by any other
circumstance raised as a defense to liability as a surety (rather than direct
liability of a principal).

 

5.4.11   Indemnitor hereby represents and warrants to CWI as follows (which
representations and warranties shall be given as of the date hereof):

 

(a)          Indemnitor has all necessary power and authority to own its
respective assets and to conduct its respective business as presently conducted
or proposed to be conducted and to enter into and perform this Agreement and all
other agreements and instruments to be executed by them in connection herewith.

 

(b)          This Agreement has been duly executed and delivered by Indemnitor.

 

(c)          This Agreement constitutes a legal, valid and binding obligation of
Indemnitor, enforceable against Indemnitor in accordance with its terms (except
as such enforceability may be limited by bankruptcy or insolvency laws and by
general principles of equity, regardless of whether such enforceability shall be
considered a proceeding in equity or at law).

 

(d)          Except as otherwise expressly provided herein, all consents,
approvals, orders or authorizations of, or registrations, declarations or
filings with, all Governmental Authorities that are required in connection with
the valid execution, delivery and performance by Indemnitor of this Agreement
have been obtained.

 

5.4.12   Indemnitor agrees that this Agreement shall continue to be effective,
or if previously terminated as a result of Indemnitor having fulfilled
Indemnitor’s obligations hereunder in full, or as a result of CWI having
released Indemnitor from the obligations and liabilities hereunder, and shall
without further act or instrument be reinstated and shall thereafter remain in
full force and effect, in either case with the same force and effect as though
such payment or portion thereof and not been made, and if applicable, as if such
previous termination had not occurred, as the case may be, if at any time any
payment or portion thereof is made by or on account of Indemnitor to CWI, and
such payment is set aside by any court or trustee having jurisdiction as a

 

 

voidable preference or fraudulent conveyance, rescinded or must otherwise be
returned by CWI upon insolvency, bankruptcy, liquidation, reorganization,
readjustment, composition, dissolution, receivership, conservatorship, winding
up or other similar proceeding involving or affecting Indemnitor, all as though
such payment had not been made, provided that in any such circumstance such
payment is returned to and received by either Indemnitor.

 

5.4.13   Moody agrees that nothing contained in this Section 5.4 shall prevent
CWI from exercising any rights available to it hereunder (including, without
limitation, all rights and remedies available at law or in equity) and that the
exercise of the aforesaid rights shall not constitute a legal or equitable
discharge of any Moody.  Moody hereby authorizes and empowers CWI to exercise,
in its respective sole discretion, any right and remedies, or any combination
thereof, which may then be available under this Agreement, since it is the
intent and purpose of Moody that, except as otherwise set forth in this
Section 5.4, the Indemnity Obligations hereunder shall be absolute, independent
and unconditional under any and all circumstances.

 

5.5         Limitation on Liability.  Notwithstanding anything to the contrary
contained in this Agreement, except as to Moody’s fraud, any claim that CWI may
have during the Survival Period against Moody for any breach of the
representations and warranties contained in Section 3.1 will not be valid or
effective, and Moody shall have no liability with respect thereto, unless the
aggregate of all valid claims exceed Fifty Thousand Dollars ($50,000). 
Furthermore, Moody’s liability for damages resulting from valid claims during
the Survival Period shall in no event exceed One Million Two Hundred Thousand
Dollars ($1,200,000) in the aggregate.  The liability of each Party hereto
resulting from the breach or default by such party shall be limited to direct
actual damages incurred by the injured party and each part hereto hereby waives
its rights to recover from the other party consequential, punitive, exemplary,
and speculative damages.  The provisions of this Section 5.5 shall survive the
termination of this Agreement

 

ARTICLE 6

 

CONDITIONS TO CLOSING

 

6.1         Conditions to CWI’s Obligations.  CWI’s obligation to consummate the
acquisition and to fund the Purchase Price contemplated by this Agreement is
subject to the satisfaction and fulfillment, as of the Closing, of each of the
following conditions precedent:

 

6.1.1     No Breaches.  Subject to Section 3.3, Moody’s representations,
warranties and covenants (including, without limitation, the covenants set forth
in Section 3.5) set forth in this Agreement shall be true and correct in all
material respects.

 

6.1.2     No Defaults.  Moody shall not have materially defaulted in the
performance of any of their respective obligations hereunder.

 

6.1.3     Title Policies.  The Title Company shall be unconditionally obligated
and prepared, subject only to payment by Moody of the applicable premium and
other related charges, to issue the Title Policies.

 

6.1.4     Termination of Management Agreement.  The existing Management
Agreement shall be terminated by Moody and Hotel Manager.

 

6.1.5     Transfer Taxes.  Moody shall deliver any Transfer Tax returns which
are required by law and the regulations issued pursuant thereto in connection
with the payment of all

 

 

Transfer Taxes that are payable or arise as a result of the consummation of the
transactions contemplated by this Agreement, in each case, as prepared by Moody
and approved by CWI and duly executed by Moody.

 

6.1.6     Liquor License Confirmation.  Moody shall or shall cause Hotel Manager
to, to the extent permitted by applicable Law, transfer any license or permit
required for the service of alcoholic beverages at the Hotel (a “Liquor Permit”)
to CWI (or, at the request of CWI, to CWI’s hotel manager) at Closing.  If the
Liquor Permit cannot be transferred to CWI or CWI’s Manager by Moody or Manager,
or otherwise obtained by CWI prior to the scheduled Closing, then, to the extent
permitted by applicable Law, Moody or Manager, as the case may be, shall
cooperate with CWI by entering an interim alcoholic beverage management
agreement, in form and substance reasonably satisfactory to CWI, with respect to
the sale of alcoholic beverages at the Hotel, at no additional cost to Moody (or
Hotel Manager).  Moody shall cooperate with CWI if CWI elects to apply for an
interim/temporary liquor license so that alcoholic beverages may continue to be
served at the Hotel pending issuance of the permanent Liquor Permit, at no
additional cost to Moody.

 

6.1.7     Termination of Master Lease; Assignment of Parking Lease.  The Master
Lease shall be terminated by Moody MT and Moody S.  In addition, Moody shall
cause the Parking Lease to be transferred and assigned to CWI pursuant to an
assignment and assumption agreement, in a form reasonably acceptable to Moody
and CWI, and Moody shall have obtained the written approval of such assignment
of the Parking Lease from DA Associates and CJV Associates as required pursuant
to the terms and conditions of the Parking Lease.

 

6.1.8     Delivery of Documents.  At or prior to Closing, Moody shall have
delivered to CWI or to the Title Company to hold in escrow, two (2) fully
executed, original counter parties of the following:

 

(a)          an original deed, in the form attached hereto as Exhibit “M”,
prepared and executed by Moody and acknowledged before a notary public in the
manner provided under the laws of the State of Pennsylvania, assigning,
conveying and transferring to CWI, the Real Property;

 

(b)          an original bill of sale, in substantially the form annexed hereto
as Exhibit “H”, containing a warranty of title, duly executed and acknowledged
by Moody, sufficient to convey to CWI, good and indefeasible title, free of all
liens, encumbrances and security interests, in and to the personal property (the
“Bill of Sale”);

 

(c)          an assignment and assumption of Contracts and Permits, in the form
attached hereto as Exhibit “J”, executed by Moody, assigning and conveying to
CWI, the Contracts and Permits (the “Assignment of Contracts and Permits”);

 

(d)          an assignment of Intangible Property, in the form attached hereto
as Exhibit “K”, executed by Moody, assigning and conveying to CWI, the
Intangible Property (the “Assignment of Intangible Property”);

 

(e)          the new franchise agreement, the form, terms and conditions of
which are customarily provided by Franchisor, dated as of the Closing Date,
fully executed by CWI (or its Affiliate) and Franchisor;

 

 

(f)           the Foreign Investment in Real Property Tax Act affidavit in
substantially the form annexed hereto as Exhibit “I” duly executed by Moody;

 

(g)          an estoppel from Starbucks Corporation, DA Associates and CJV
Associates with respect to their Space Lease at the Hotel, in a form reasonably
acceptable to CWI and consistent with the provisions and limitations set forth
in the respective Space Lease;

 

(h)          a Closing Statement mutually approved and executed by Moody;

 

(i)           any other documents, instruments or agreements reasonably
necessary to effectuate the transaction contemplated by this Agreement.

 

The Closing shall not be deemed to have occurred until each of the deliveries
and actions described in this Section 6.1 and Section 6.2 below has occurred.

 

6.2         Conditions to Moody’s Obligations.  Moody’s obligation to consummate
the transfer and assignment of the Hotel and the Property contemplated by this
Agreement is subject to the satisfaction and fulfillment, as of the Closing, of
each of the following conditions precedent:

 

6.2.1     No Breaches.  Each of CWI’s representations and warranties set forth
in this Agreement shall be true and correct in all material respects;

 

6.2.2     No Defaults.  CWI shall not have materially defaulted in the
performance of any obligations hereunder.

 

6.2.3     Delivery of Documents.  At or prior to Closing, CWI shall have
delivered to Moody, two (2) fully executed, original counterparts of the
following:

 

(a)          a Closing Statement mutually approved and executed by CWI; and

 

(b)          an original Bill of Sale duly executed and acknowledged by CWI;

 

(c)          an original Assignment of Contracts and Permits executed by CWI;

 

(d)          an original Assignment of Intangible Property executed by CWI;

 

(e)          any other documents, instruments or agreements reasonably necessary
to effectuate the transaction contemplated by this Agreement.

 

6.2.4     Purchase Price.  CWI shall have funded the Purchase Price to Escrow
Agent via wire transfer in immediately available funds.

 

6.2.5     Franchise Agreement.  Moody shall have received from Franchisor a
termination of the Franchise Agreement, together with all customary releases of
Moody, in such form as is customarily provided by Franchisor, dated as of the
Closing Date.

 

The Closing shall not be deemed to have occurred until each of the deliveries
and actions described in Sections 6.1 and Section 6.2 has occurred.

 

 

ARTICLE 7

 

WAIVER OF TRIAL BY JURY; CONSENT

 

7.1         Waiver.  To the extent permitted by law, CWI and Moody hereby
expressly waive any right to trial by jury of any Claim, demand, Action, cause
of action, or Proceeding arising under or with respect to this Agreement, or in
any way connected with, or related to, or incidental to, the dealings of the
Parties hereto with respect to this Agreement or the transactions related hereto
or thereto, in each case whether now existing or hereafter arising, and
irrespective of whether sounding in contract, tort, or otherwise.  To the extent
they may legally do so, CWI and Moody hereby agree that any such Claim, demand,
Action, cause of action, or Proceeding shall be decided by a court trial without
a jury and that any Party hereto may file an original counterpart or a copy of
this ARTICLE 7 with any court as written evidence of the consent of the other
party or parties hereto to waiver of its or their right to trial by jury.

 

7.2         Consent to Jurisdiction.  To the fullest extent permitted by law,
CWI and Moody hereby irrevocably consents and agrees, for the benefit of each
Party, that any legal Action, suit or Proceeding against it with respect to its
obligations, liabilities or any other matter under or arising out of or in
connection with this Agreement shall be brought in any federal or state court
sitting in Pittsburgh, Pennsylvania (the “Designated Courts”), and hereby
irrevocably accepts and submits to the jurisdiction of the Designated Courts
(and of the appropriate appellate courts of each such Designated Court) with
respect to any such Action, suit or Proceeding.  Each Party hereto also hereby
irrevocably consents and agrees, for the benefit of each other Party, that any
legal Action, suit or Proceeding against it shall brought in any Designated
Court, and hereby irrevocably accepts and submits to the exclusive jurisdiction
of each such Designated Court with respect to any such Action, suit or
Proceeding.  Each Party hereto waives any objection which it may now or
hereafter have to the laying of venue of any of the aforesaid actions, suits or
Proceedings brought in any such Designated Court and hereby further waives and
agrees not to plead or claim in any such Designated Court that any such Action,
suit or Proceeding brought therein has been brought in any inconvenient forum.

 

ARTICLE 8

 

CASUALTY AND CONDEMNATION

 

8.1         Casualty and Condemnation.  If, prior to the Closing, Material
Damage occurs or an action with regard to a Material Taking is commenced with
respect to the Hotel, then:

 

(a)          if, prior to Closing, an action for condemnation or similar taking
is commenced or threatened with respect to any portion of the Hotel but the same
would not, if consummated, constitute a Material Taking, then CWI shall remain
obligated to close hereunder without a reduction to the Purchase Price but all
condemnation proceeds and other awards (other than proceeds and awards not
awarded to Moody or its Affiliates) shall be paid to CWI; or if, prior to
Closing, either Party, within five (5) business days of discovery of the action
or threatened action regarding a Material Taking may elect to terminate this
Agreement by delivery of written notice to the other Party whereupon Escrow
Agent shall immediately return the Earnest Money to CWI and, in which event,
except for the provisions in this Agreement that expressly survive the Closing
or earlier termination of this Agreement, this Agreement shall be void and of no
further force and effect, and neither Party shall have any liability to the
other by reason hereof; provided, however, if CWI and Moody elect not to so
terminate this Agreement pursuant to the above, then the transactions
contemplated hereby shall be closed without a reduction in the Purchase Price
but all

 

 

condemnation proceeds and other awards (other than proceeds and awards not
awarded to Moody or its Affiliates) shall be paid to CWI; or

 

(b)          if, prior to Closing, any of the improvements on the Hotel are
damaged or destroyed but such damage does not constitute Material Damage, then
CWI shall remain obligated to close hereunder without a reduction in the
Purchase Price but any insurance proceeds and other awards (other than proceeds
and awards not owned by Moody or its Affiliates) shall be paid to CWI and Moody
shall have paid any deductible; or, if prior to the Closing, Material Damage
occurs, then either Party, within five (5) business days of discovery of the
events constituting Material Damage may elect to terminate this Agreement by
delivery of written notice to the other Party whereupon Escrow Agent shall
immediately return the Earnest Money to CWI and, in which event, except for the
Surviving Obligations, this Agreement shall be void and of no further force and
effect, and neither Party shall have any liability to the other by reason
hereof; and if both CWI and Moody elect not to so terminate this Agreement
pursuant to the above, then the transaction contemplated hereby shall be closed
without a reduction in the Purchase Price but Moody shall pay any deductible and
any insurance proceeds and other awards (other than proceeds and awards not
owned by Moody or its Affiliates) shall be paid to CWI.

 

ARTICLE 9

 

MISCELLANEOUS

 

9.1         Amendments.  No amendment, modification, supplement or waiver of any
provision of this Agreement, or consent to any departure from the terms of this
Agreement by any Party hereto shall be effective unless the same shall be in
writing and signed by all the Parties hereto, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.

 

9.2         Notices.  Any and all notices, approvals, requests, consents,
waivers, demands or other communications permitted or required to be made under
this Agreement shall be in writing, signed by the party giving such notice,
request, consent, waiver or demand and shall be delivered (i) personally;
(ii) by reputable overnight delivery service; (iii) by registered or certified
mail, return receipt requested; or (iv) by facsimile with time- and date-stamped
confirmation of receipt (provided, however, that a copy of such notice shall be
mailed in accordance with the foregoing clause (ii) promptly after the
transmission of such facsimile).  All such notices, requests, consents, waivers
or demands shall be deemed delivered, as applicable:

 

(a)          on the first (1st) business day on or after the date of the
personal delivery;

 

(b)          on the first (1st) business day on or after the date of the signed
receipt for certified or registered mail;

 

(c)          on the next business day for overnight delivery service; or

 

(d)          on the first (1st) business day on or after the date of receipt for
facsimile.

 

Notices directed to a Party shall be delivered to the parties at the address or
facsimile number as set forth below, or at such other address or facsimile
number as may be specified by written notice given in conformity with the terms
of this Section 9.2:

 

 

If to Moody:

 

c/o Moody National Realty Company, LP
6363 Woodway, Suite 110
Houston, Texas 77057
Attn: Brett Moody/ Lisa Bunner
Telephone: (713) 977-7500
Facsimile: (713) 977-7505
bmoody@moodynational.com/
lbunner@moodynational.com

 

with a copy to:

 

Mr. Adam S. Wilk

Sneed, Vine & Perry, P.C.

900 Congress, Suite 300

Austin, Texas 78701

Telephone No. (512) 494-3126

E-Mail:  awilk@sneedvine.com

 

If to CWI, then to:

 

Carey Watermark Investors Incorporated
c/o Watermark Capital Partners, LLC
272 E. Deerpath Road, Suite 320
Lake Forest, IL 60045
Attention:  Michael Medzigian
Telephone No.:  847.482.8600
Email:  medzigian@watermarkcap.com

 

with a copy to:

 

Paul Hastings LLP
515 S. Flower Street, 25th Floor
Los Angeles, CA  90071
Attention: Rick S. Kirkbride, Esq.
Telephone No.:  213.683.6261
Email:  rickkirkbride@paulhastings.com

 

Any counsel designated above or any replacement counsel who may be designated by
CWI or Moody or such counsel by written notice to the other Parties is hereby
authorized to give notices hereunder on behalf of its client.

 

9.3         Further Assurances.  Each Party covenants and agrees that it will at
any time and from time to time do, execute, acknowledge and deliver, or will
cause to be done, executed, acknowledged and delivered, all such further acts,
documents and instruments as may reasonably be required by the Parties hereto in
order to carry out and effectuate fully the transactions herein contemplated in
accordance with this Agreement; provided, however, no Party shall be obligated
to provide any further assurance that would materially increase the liabilities
or obligations of such Party hereunder or materially reduce the rights and
benefits of such Party hereunder.

 

 

 

9.4         Entire Agreement.  This Agreement constitutes the final, complete
and exclusive statement of the agreement of the Parties hereto with respect to
the subject matter of this Agreement and supersedes all prior and
contemporaneous agreements and understandings.  No Party hereto has been induced
to enter into this Agreement by, nor is any party relying on, any representation
or warranty other than those expressly set forth herein.

 

9.5         Execution in Counterparts.  This Agreement may be executed by
facsimile signature in any number of counterparts, each of which when so
executed and delivered will be deemed an original, and such counterparts
together constitute one and the same instrument.

 

9.6         Time.  Time is of the essence in the performance of the Parties’
respective obligations under this Agreement.

 

9.7         Amendments.  No amendment, modification or supplement of any
provision of this Agreement will be valid or binding unless such amendment,
modification or supplement is in writing and signed by all Parties hereto.

 

9.8         Waivers.  No waiver of any provision, condition, requirement or
breach of or under this Agreement will be effective unless it is in writing and
signed by the waiving party.  No such waiver will be deemed to be a waiver of
any other provision, condition, requirement or breach, whether or not the waived
provision, condition, requirement or breach is similar to such other provision,
condition, requirement or breach.  No failure or delay by any Party hereto to
exercise any right, power or remedy hereunder in any manner will operate as a
waiver thereof or preclude or impair any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder.

 

9.9         Severability.  Whenever possible, each provision of this Agreement
is to be construed in a manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held by a court or an arbitral
panel of competent jurisdiction to be illegal, invalid or unenforceable under
applicable law, then such provision will be ineffective only to the extent of
such illegality, invalidity or unenforceability, without affecting the remainder
of this Agreement.

 

9.10       Construction.  Each Party hereto acknowledges that it and its counsel
have participated fully in the negotiation, review and revision of this
Agreement.  Accordingly, each provision of this Agreement will be construed
according to its fair meaning and not strictly for or against any party,
regardless of whether such provision was drafted by or at the request of a
particular Party or such Party’s counsel.

 

9.11       Headings.  The headings contained in this Agreement are included for
convenience only and are not intended to describe, interpret, define or limit
the scope, extent or intent of any provision of this Agreement.

 

9.12       Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF PENNSYLVANIA, WITHOUT GIVING EFFECT TO ANY PRINCIPLES REGARDING
CONFLICT OF LAWS.

 

9.13       Cumulative Rights and Remedies.  Except as otherwise specifically
provided herein, the rights and remedies provided herein are cumulative and not
exclusive of any right or remedy provided by law.

 

 

9.14       Assignment.  Neither this Agreement nor any right, interest nor
obligation hereunder may be assigned by Moody (except as otherwise contemplated
herein), and any attempt to make any such an assignment shall be null and void. 
Notwithstanding the foregoing, CWI may transfer this Agreement to any Affiliate
of CWI without the consent of Moody; provided, however, any such assignment
(including one to CWI’s Affiliate) shall not relieve CWI of its pre-Closing
obligations under this Agreement.

 

9.15       Successors and Assigns.  Except as otherwise expressly provided
herein, this Agreement will be binding upon and inure to the benefit of the
Parties hereto and their respective heirs, successors and permitted assigns.

 

9.16       No Third-Party Beneficiaries.  This Agreement will not confer any
rights or remedies upon any Person or entity other than the Parties hereto and
their respective heirs, successors and permitted assigns.

 

9.17       Attorneys’ Fees.  If any lawsuit or arbitration or other Legal
Proceeding arises in connection with the interpretation or enforcement of this
Agreement, the prevailing party therein shall be entitled to receive from the
other party the prevailing party’s reasonable costs and expenses, including
reasonable attorneys’ fees, incurred in connection therewith, in preparation
therefor and on appeal therefrom, which amounts shall be included in any
judgment therein.

 

9.18       Exclusivity.  Unless and until the earlier of (i) the termination of
this Agreement pursuant to the terms and conditions hereof or (ii) the Closing
Date, neither Moody, nor any Affiliate nor any of their respective members,
partners, or agents (including, without limitation, the Broker) shall offer the
Property, entertain and/or solicit offers for the Property or otherwise
negotiate for the sale of the Property or make any information about the
Property available (for purpose of sale or refinance) to any Person other than
CWI, its Affiliates and their respective designees, agents and/or authorized
third parties.

 

[Signature Page to Follow]

 

 

IN WITNESS WHEREOF, the Parties hereto have caused this Purchase and Sale
Agreement to be duly executed as of the date first above written.

 

 

 

 

SELLERS:

 

MOODY NATIONAL CY SHADYSIDE S, LLC,
a Delaware limited liability company

 

 

By: /s/ Brett Moody

Name:  Brett Moody
Title: Authorized Agent

 

MOODY NATIONAL CY SHADYSIDE MT, LLC,
a Delaware limited liability company

 

 

By:  /s/ Brett Moody

Name:  Brett Moody

Title: Authorized Agent

 

 

PURCHASER:

 

CWI SHADYSIDE HOTEL, LLC,
a Delaware limited liability company

 

 

By:  /s/ Michael G. Medzigian

Name:  Michael G. Medzigian

Title:  Chief Executive Officer and President

 

 

INDEMNITOR:

 

MOODY MANAGEMENT CORPORATION,
a Texas corporation

 

 

 

By:  /s/ Brett Moody
Name: Brett Moody
Title: President

 

 

EXHIBIT “A”

 

DEFINITIONS

 

“Action” means any action, suit, Proceeding, arbitration or investigation by or
before any Governmental Authority.

 

“Advance Deposits” shall have the meaning set forth in Section 2.1.2(g).

 

“Affiliate” means, with respect to any Person or entity, any other Person or
entity directly or indirectly controlling, controlled by or under common control
with such Person or entity.  For purposes hereof, the term “control” shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of any Person or entity, or the power to
veto major policy decisions of such Person or entity, whether through the
ownership of voting securities, by agreement, or otherwise.  Notwithstanding the
foregoing, Carey, CWII and WCP or any entity managed or advised by Carey, CWII
or WCP or any subsidiary of any such entities (and without regard to the
percentage of equity ownership any of them may have in such entity), shall be
deemed “Affiliates” of CWI for all purposes under this Agreement.

 

“Agreement” shall have the meaning set forth in the Preamble.

 

“ALTA Survey” shall have the meaning set forth in Section 2.7.1.

 

“Approved Liabilities” shall have the meaning set forth in Section 3.1.2.

 

“Assignment of Contracts and Permits” shall have the meaning set forth in
Section 6.1.8(c).

 

“Assignment of Intangible Property” shall have the meaning set forth in
Section 6.1.8(d).

 

“Audit Representation Letter” shall have the meaning set forth in
Section 3.5(g).

 

“Baseline Inventory Level” shall have the meaning set forth in Section 3.5(b).

 

“Bill of Sale” shall have the meaning set forth in Section 6.1.8(b).

 

“Bookings” shall have the meaning set forth in Section 2.1.2(g).

 

“Carey” means W.P. Carey & Co., LLC, a Delaware limited liability company.

 

“CJV Associates” shall have the meaning set for in the Recitals.

 

“Claims” shall have the meaning set forth in Section 5.4.1.

 

“Closing” shall have the meaning set forth in Section 2.5.

 

“Closing Date” shall have the meaning set forth in Section 2.5.

 

“Closing Statement” shall have the meaning set forth in Section 4.2.1(c).

 

“CMP” shall have the meaning set forth in Section 4.2.2(f).

 

A-1

 

“Code” means the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.

 

“Consumables” shall have the meaning set forth in Section 2.1.2(b).

 

“Contracts” shall have the meaning set forth in Section 2.1.2(d).

 

“Cut-Off Time” shall have the meaning set forth in Section 4.2.1.

 

“CWI” shall have the meaning set forth in the Preamble.

 

“CWII” means Carey Watermark Investors Incorporated, a Maryland corporation.

 

“DA Associates” shall have the meaning set for in the Recitals.

 

“Designated Courts” shall have the meaning set forth in Section 7.2.

 

“Disputed Amounts” shall have the meaning set forth in Section 4.10.

 

“Draft Closing Statement” shall have the meaning set forth in Section 4.2.1(a).

 

“Due Diligence Period” shall have the meaning set forth in Section 2.6.1.

 

“Earnest Money” shall have the meaning set forth in Section 2.3.3.

 

“Effective Date” shall have the meaning set forth in the Preamble.

 

“Employment Agreement” means each management, employment, severance, consulting,
relocation, repatriation or expatriation agreement or other contract (whether
oral or written) between the Hotel Manager and any current or former employee,
other than any such management, employment, severance, consulting, relocation,
repatriation or expatriation agreement or other contract with a current or
former employee which is terminable “at will” without any obligation on the part
of Hotel Manager, Moody or its Subsidiaries or Affiliates to make any payments
or provide any benefits in connection with such termination.

 

“Environmental Conditions” shall have the meaning set forth in Section 3.6.3.

 

“Environmental Laws” means 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.;
the Occupational Safety and Health Act, 29 USC §651 et seq. (to the extent it
regulates occupational exposure to Hazardous Materials) and the Puerto Rico
Environmental Public Policy Act, 12

 

Exhibit “A”-2

 

L.P.R.A. Sec. 8001, et seq., and the rules and regulations promulgated
thereunder; any state, local or foreign counterparts or equivalents, in each
case as amended from time to time.

 

“Equipment Leases” shall have the meaning set forth in Section 2.1.2(e).

 

“Escrow Agent” shall have the meaning set forth in Section 2.3.1.

 

“Escrow Instructions” shall have the meaning set forth in Section 2.3.1.

 

“Excess Liability Amount” shall have the meaning set forth in Section 4.6.2.

 

“Excluded Assets” shall have the meaning set forth in Section 2.1.3.

 

“Excluded Liabilities” means any lien, encumbrance, liability or obligation of
any nature whatsoever, whether fixed or contingent, recorded or unrecorded,
known or unknown, with respect to the Hotel (to the extent accrued as of the
Closing whether known to have existed by Moody at the Closing or otherwise and
whether constituting a breach of any representation or warranty by Moody set
forth in this Agreement or not, including, without limitation, any and all
obligations and liabilities that are known to Moody as of the Closing or become
known to Moody after the Closing for acts or omissions (including, without
limitation, personal injury or property damage or breach of contract) the events
giving rise to which occurred prior to the Closing (whether known to have
existed at the Closing or otherwise), including, but not limited to (subject to
the foregoing limitations):  (i) indebtedness, obligations and guarantees not
included within the definition of Post-Closing Accruals; (ii) any and all
accounts payable or other trade payables not included within the definition of
Post-Closing Accruals; (iii) monetary title encumbrances not included in
Permitted Exceptions which exist as of the Closing (to the extent not otherwise
insured against in and recovered under the Title Policies); (iv) obligations or
liabilities relating to acts or omissions of Moody or any of its respective
Affiliates occurring prior to the Closing or resulting from events occurring
prior to Closing; (v) to the extent not included within the definition of
Post-Closing Accruals, tax obligations, including without limitation, all
federal, state, local or special purpose district tax and withholding
liabilities and obligations of Moody or any of its respective Affiliates with
respect to periods prior to the Closing, and any interest, additions to tax,
loss of elections, fines or penalties thereon or with respect to returns filed
or required to be filed in connection therewith (including, without limitation,
any recapture and including any amounts due of which may come due and owing
under applicable Law); (vi) any liability arising from the termination,
discharge, lay-off or other separation from employment of Hotel Manager’s,
Moody’s or any of its respective Affiliates’ employees prior to the Closing,
except as otherwise set forth in this Agreement; (vii) any liability or
obligation arising as a result of any grievances or any unfair labor practice
charges, any Equal Employment Opportunity Commission claims, wage and hour
claims, and unemployment compensation claims, in each case for periods prior to
the Closing; (viii) liability incurred or accrued prior to the Closing for any
workers’ compensation premiums or claims pertaining to periods prior to the
Closing or for any common law or statutory claim by an employee or any other
person for any injury, occupational disease, aggravation of a previously
existing injury or disease; (ix) liabilities arising from any claims by third
parties for personal injury or property damage arising out of events occurring
prior to the Closing as a result of any violation of Environmental Laws;
(x) except as otherwise provided in Section 4.8, liabilities or obligations of
Moody or its Affiliates for brokerage or other commissions relating to the
transactions contemplated herein; (xi) liabilities relating to or arising from
any contracts between Moody and any of its Affiliates; (xii) liabilities
relating to or arising from post-retirement health care benefits owed or to be
owed by the Hotel Manager to its employees or former employees, as the case may
be, for employment relating to the period prior to the Closing;
(xiii) liabilities under or in

 

Exhibit “A”-3

 

connection with any employee benefit plan incurred or accrued prior to the
Closing; (xiv) any other liabilities arising from the Hotel Manager’s,
employees’ employment, whether imposed by operation of an Employment Agreements
or contracts, employee manuals or handbooks or personnel policies or otherwise,
including, but not limited to, any wage claims, holiday, vacation, personal day
and sick pay benefits, severance or layoff benefits, employee health (including
claims for COBRA coverage), welfare and pension plan benefits, Section 401(k) of
the Code and profit sharing and bonus plan benefits, WARN obligations, pending
grievances and/or arbitrations back pay and/or benefits, any other Taft-Hartley
Fund benefits, pension fund withdrawal liability, workers’ compensation
liabilities, savings bonds and wage garnishments or assignments, union agency
fees, union dues, employment discrimination, wrongful termination or similar
claims incurred or accrued before the Closing; (xv) any security and other
deposits, advance or prepaid rents, and key money (including any interest
thereon) not prorated pursuant to this Agreement and held by Moody from tenants
of the Hotel with Space Leases in effect as of the Closing; (xvi) any liability
or obligation for Advance Deposits if any deposits related thereto are not
prorated pursuant to this Agreement; (xvii) any outstanding gift certificates,
gift cards and other such items that allow third parties to use rooms and other
items at no charge or at discounted rates that are not listed as an Post-Closing
Accruals attached hereto; (xviii) to the extent not included within the
definition of Post-Closing Accruals, any liability with respect to goods and
services or the purchase of goods and services to the extent such goods were
delivered at the Hotel or the services were rendered prior to or at the Closing;
(xix) to the extent not included within the definition of Post-Closing Accruals,
all liability for Moody’s purchase money obligations whether structured as debt,
lease or otherwise; and (xx) all liabilities or obligations for due bill
contracts or other “trade out” liabilities not included within the definition of
Post-Closing Accruals.  Notwithstanding anything to the contrary in this
definition or in this Agreement, “Excluded Liabilities” shall not include any
amounts or claims described in Section 5.3(ii) of this Agreement.

 

“Expert” shall mean an independent, nationally (U.S.) recognized consulting firm
or individual with expertise in the operation of hotel, resorts and restaurants
facilities who is qualified to resolve the issue in question, and who is
appointed in each instance pursuant to and in accordance with Section 4.10.

 

“Federal Bankruptcy Code” shall have the meaning set forth in Section 5.4.4.

 

“FF&E” means all tangible personal property and fixtures of any kind (other than
personal property owned by guests or tenants of the Hotel) attached to, or
located upon and used in connection with the ownership, maintenance, use or
operation of the Hotel as of the Effective Date, including, without limitation,
all furniture, fixtures, equipment, signs and related personal property; all
heating, lighting, plumbing, drainage, electrical, air conditioning, and other
mechanical fixtures and equipment and systems; all elevators, and related motors
and electrical equipment and systems; all hot water heaters, furnaces, heating
controls, motors an equipment, all shelving and partitions, all ventilating
equipment, and all disposal equipment; all spa, health club and fitness
equipment; all equipment used in connection with the use and/or maintenance of
the guestrooms, restaurants, lounges, business centers, meeting rooms, swimming
pools, indoor and/or outdoor sports facilities and other common areas and
recreational areas; all carpet, drapes, beds, furniture, televisions and other
furnishings; all stoves, ovens, freezers, refrigerators, dishwashers, disposals,
kitchen equipment and utensils, tables, chairs, plates and other dishes,
glasses, silverware, serving pieces and other restaurant and bard equipment,
apparatus and utensils.

 

“Franchise Agreement” shall mean that certain Relicensing Franchise Agreement
dated March 20, 2008 between Franchisor and Moody MT with respect to the Hotel.

 

Exhibit “A”-4

 

“Franchisor” shall mean Marriott International, Inc.

 

“Franchisor Approval” shall have the meaning set forth in Section 2.8.

 

“Franchisor Approval Period” shall have the meaning set forth in Section 2.8.

 

“Good Faith Deposit” shall have the meaning set forth in Section 2.3.2.

 

“Governmental Authority” means any court, tribunal, authority, agency,
commission, official or other instrumentality of the United States, or any
state, county, city or other political subdivision, arbitrator or any judicial
or quasi-judicial tribunal of competent jurisdiction.

 

“Hazardous Materials” means (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 derivative 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.

 

“Hotel” shall have the meaning set forth in the Recitals.

 

“Hotel Manager” shall mean Concord Hospitality Enterprises, Inc.

 

“Indemnitor” shall have the meaning set forth in Section 5.4.2.

 

“Indemnity Obligations” shall have the meaning set forth in Section 5.4.2.

 

“Intangible Property” shall mean all intangibles owned or used by Moody in the
ownership and operation of the Hotel.

 

“Intellectual Property” shall mean any or all of the following and all rights
in, arising out of, or associated therewith: (i) all inventions (whether
patentable or not), invention disclosures, improvements, trade secrets,
proprietary information, confidential information, know-how, technology,
processes, designs and all documentation relating to any of the foregoing;
(ii) works of authorship and art in any media, and all copyrights, copyright
registrations and applications therefor, and all other rights, including
authors’ or moral rights, corresponding thereto throughout the universe;
(iii) all computer software not purchased from or licensed by a third party,
including all source code, object code, firmware, development tools, files,
records and data, and all media on which any of the foregoing is recorded;
(iv) all trademarks, service marks, trade dress, trade names, designs, logos,
slogans and general intangibles of like nature, including those existing under
common law and all registrations and applications therefor throughout the
universe, and all goodwill associated with or symbolized by any of the
foregoing; (v) all Internet domain names; (vi) with respect to all of the
foregoing, all rights, benefits, privileges, causes of action and remedies,
including the right to bring an Action in law for infringement or other
impairment of rights, benefits or privileges, including the right to receive and
retain damages, proceeds or any other legal or equitable protections; and
(vii) any similar or equivalent rights to any of the foregoing anywhere in the
universe.

 

Exhibit “A”-5

 

“Intervening Lien” shall have the meaning set forth in Section 2.7.2.

 

“Investigation Documents” shall have the meaning set forth in Section 2.6.2.

 

“IRS” shall mean the Internal Revenue Service.

 

“Land” shall have the meaning set forth in Section 2.1.1(a).

 

“Laws” means all laws, statutes, treaties, rules, codes, ordinances,
regulations, restrictions, official guidelines, policies, directives,
interpretations, Permits or like action of any applicable Governmental
Authority.

 

“Liquor Permit” shall have the meaning set forth in Section 6.1.6.

 

“Losses” shall have the meaning set forth in Section 5.4.1.

 

“Management Agreement” shall mean that certain Management Agreement effective on
or about March 18, 2008 between Moody National CY Pitts Shadyside PA, LLC, a
Delaware limited liability company as Owner and Concord Hosptiality Enterprises
Company, a Delaware corporation as Manager.

 

“Master Lease” shall have the meaning set forth in the Recitals.

 

“Material Damage” means damage that is reasonably estimated to cost in excess of
Two Hundred Fifty Thousand Dollars ($250,000) to repair.

 

“Material Taking” means the permanent taking, or temporary taking of such
portion of the Property (or access thereto) that includes any portion of the
Hotel, or results in a taking of any of the portion of the Land that is
reasonably likely to interfere in more than a de minimus manner in the operation
of the Hotel.

 

“Moody” shall have the meaning set forth in the Preamble.

 

“Moody MT” shall have the meaning set forth in the Preamble.

 

“Moody S” shall have the meaning set forth in the Preamble.

 

“Operational Taxes” shall have the meaning set forth in Section 4.5.4.

 

“Parking Lease” shall have the meaning set forth in the Recitals.

 

“Party” or “Parties” shall have the meaning set forth in the Preamble.

 

“Permits” shall have the meaning set forth in Section 2.1.2(h).

 

“Permitted Exceptions” shall have the meaning set forth in Section 2.7.3.

 

“Person” means any natural person, corporation, limited liability company,
general partnership, limited partnership, organization, trust, union,
association or Governmental Authority.

 

“Personal Property” shall have the meaning set forth in Section 2.1.2.

 

Exhibit “A”-6

 

“Preliminary Closing Statement” shall have the meaning set forth in
Section 4.2.1(b).

 

“Proceeding” shall have the meaning set forth in Section 5.4.3.

 

“Property” shall have the meaning set forth in Section 2.1.2.

 

“PTR Exceptions” shall have the meaning set forth in Section 2.7.1.

 

“Purchase Price” shall have the meaning set forth in Section 2.2.

 

“Real Property” shall have the meaning set forth in Section 2.1.1.

 

“Related Parties” shall have the meaning set forth in Section 5.4.2.

 

“Representations and Warranties” shall have the meaning set forth in
Section 5.4.2(ii).

 

“Rooms Ledger” means the final night’s room revenue for each of the respective
Hotel (revenue from rooms occupied as of 6:00 a.m. on the Closing, exclusive of
food, beverage, telephone and similar charges charged or incurred as of the
Cut-Off Time which shall be retained by Moody with CWI entitled to any such
charges charged or incurred after the Cut-Off Time), including any Sales Taxes,
room taxes or other taxes thereon.

 

“Rules” shall have the meaning set forth in Section 4.10.

 

“Sales Taxes” shall have the meaning set forth in Section 3.1.3.

 

“Second Deposit” shall have the meaning set forth in Section 2.3.3.

 

“Space Leases” shall have the meaning set forth in Section 3.1.11.

 

“Straddle Period” shall have the meaning set forth in Section 4.5.2.

 

“Subsidiary” or “Subsidiaries” shall mean any Person in which another Person,
directly or indirectly through subsidiaries or otherwise, beneficially owns
either (i) more than fifty percent (50%) of either the equity interests in; or
(ii) any of the voting control of, such Person.

 

“Supplies” means all merchandise, supplies, inventory and other items used for
the operating and maintenance of guest rooms, restaurants, lounges, swimming
pools, health clubs, spas, business centers, meeting rooms and other common
areas and recreational areas located within or relating to the Hotel, including,
without limitation, all food and beverage (alcoholic and non-alcoholic)
inventory, office supplies and stationary, advertising and promotional
materials, china, glasses, silver/flatware, towels, linen and bedding, guest
cleaning, paper and other supplies, employee uniforms, and all cleaning and
maintenance supplies, including those used in connection with the swimming
pools, health clubs, spas, fitness centers, indoor or outdoor sports facilities
(e.g., tennis courts), restaurants, business centers, meeting rooms and other
common areas and recreational areas.

 

“Survey Exceptions” shall have the meaning set forth in Section 2.7.1.

 

“Surviving Obligations” shall have the meaning set forth in Section 2.3.2.

 

Exhibit “A”-7

 

“Tax” or “Taxes” means any income, gross or net receipts, property, sales, use,
capital gain, transfer, excise, license, production, franchise, employment,
social security, occupation, payroll, registration, occupancy, transient
occupancy, governmental pension or insurance, withholding, royalty, severance,
stamp or documentary, value added, or other tax, charge, assessment, duty, levy,
compulsory loan, business or occupation (including any interest, additions to
tax, or civil or criminal penalties thereon) of the United States or any state
or local jurisdiction therein, or of any other nation or any jurisdiction
therein.

 

“Tax Returns” means any report, form, return, statement or other information
(including any amendments) required to be supplied to a Governmental Authority
by a Person with respect to Taxes, including information returns, any amendments
thereof or schedule or attachment thereto and any documents with respect to or
accompanying requests for the extension of time in which to file any such
report, return, document, declaration or other information.

 

“Title Company” shall have the meaning set forth in Section 2.7.1.

 

“Title Endorsements” shall have the meaning set forth in Section 2.7.3.

 

“Title Exceptions” shall have the meaning set forth in Section 2.7.1.

 

“Title Policy” shall have the meaning set forth in Section 2.7.3.

 

“Title Report” shall have the meaning set forth in Section 2.7.1.

 

“Transfer Taxes” shall have the meaning set forth in Section 4.1.

 

“Uniform System” means the Uniform System of Accounts for the Lodging Industry
that is published by the Hotel Association of New York City, Inc. and approved
by the American Hotel & Motel Association, in effect at the time in question
(currently, the 10th Revised Edition, 2006).

 

“WCP” means Watermark Capital Partners, LLC, a Delaware limited liability
company.

 

Exhibit “A”-8

 

 

EXHIBIT “B”

 

LEGAL DESCRIPTION

 

PARCEL A (FEE PARCEL)

 

ALL that certain lot or parcel of ground situate in the Eighth Ward of the City
of Pittsburgh, County of Allegheny and Commonwealth of Pennsylvania, being more
particularly bounded and described as follows:

 

BEGINNING at a point at the intersection of the Southerly line Baum Boulevard,
S.R. 0400, Variable Width (as widened by Commonwealth of Pennsylvania in Deed
Book Volume 5281, page 341) and the southwesterly line of Liberty Avenue, 80
feet wide; thence from said place of beginning and along the Southwesterly right
of way line of Liberty Avenue, the following four courses and distances: South
53° 34’ 30” East, a distance of 211.89 feet to a point; thence South 45 degrees,
38 feet 44 inches East, a distance of 100.99 feet to a point; thence South 33°
02’ 01” East, a distance of 2.82 feet to a point on a curve; thence by an arc of
a curve deflecting to the right in a Southwesterly direction having a radius of
34.34 feet an arc distance of 40.77, to a point on the Northerly line of Centre
Avenue, 60 feet wide; thence along said right of way line of Centre Avenue South
70° 01’ 00” West, a distance of 257.80 feet to a rebar found; thence leaving
said right-of-way North 19° 57’ 30” East, a distance of 295.34 feet to a 2” post
on the Southerly right of way line of Baum Boulevard; thence along said right of
way line of Baum Boulevard; thence along said right of way line of Baum
Boulevard North 71° 36’ 50” East, a distance of 127.96 feet to the place of
beginning.

 

Being also described in accordance with that certain ALTA/ACSM Land Title Survey
Prepared by LANDCO, L.P., dated 2/22/07 as follows:

 

ALL that certain lot or parcel of ground situate in the Eighth Ward of the City
of Pittsburgh, County of Allegheny and Commonwealth of Pennsylvania, being more
particularly described as follows:

 

BEGINNING at an .L. cut set in the concrete walk at the intersection of the
Southerly line of Baum Boulevard, S.R. 0400, Variable Width (as widened by
Commonwealth of Pennsylvania in Deed Book Volume 5281, page 341) and the
southwesterly line of Liberty Avenue, 80 feet wide; thence from said place of
beginning and along the Southwesterly right of way line of Liberty Avenue, the
following four courses and distances: South 53° 34. 30. East, a distance of
211.89 feet to a point; thence South 45° 38.44. East, a distance of 100.99 feet
to a point; thence South 33° 02. 01. East, a distance of 2.82 feet to a point on
a curve; thence by an arc of a curve deflecting to the right in a Southwesterly
direction having a radius of 34.34 feet an arc distance of 40.77 feet, with a
chord bearing South 36°00.19. West, a distance of 38.42 feet to a point on the
Northerly line of Centre Avenue, 60 feet wide; thence along said right of way
line of Centre Avenue South 70° 01. 00. West, a distance of 257.80 feet to a
rebar found; thence leaving said right of way, North 19° 57. 30. West, a
distance of 295.34 feet to an .L. cut set in the concrete walk on the Southerly
right of way line of Baum Boulevard; thence along said right of way line of Baum
Boulevard; North 71° 36. 50. East, a distance of 127.96 feet to the place of
beginning.  Intending to convey 64,304 +/- square feet or 1.48 +/- acres of
land.

 

Exhibit “B”

 

 

PARCEL B (LEASEHOLD PARCEL)

 

ALL that certain lot or parcel of ground situate in the Eighth Ward of the City
of Pittsburgh, County of Allegheny and Commonwealth of Pennsylvania, being more
particularly bounded and described in accordance with that certain ALTA/ACSM
Land Title Survey prepared by Civil & Environmental Consultants, Inc. dated
October 11,2004, certified October 20, 2004 as follows:

 

BEGINNING at a point on the easterly line of South Aiken Avenue, 50 feet wide at
the dividing line of property now or formerly Michael C. Dinardo, trustee, et
al, and property now or formerly of C.J.V. Associates; thence along the dividing
line of property now or formerly Michael C. Dinardo, trustee, et al, and
property now or formerly C.J.V. Associates, South 80° 04’ 40” East, 150.00 feet
to a point on the westerly line of Vintage Way, 20.00 feet wide; thence along
the westerly line of Vintage Way, 20.00 feet wide South 9° 55’ 20” West, 134.35
feet to a point; thence continuing along the westerly line of Vintage Way, 20.00
feet wide, by an arc of a circle deflecting to the right in a southwestwardly
direction, having a radius of 30.00 feet, an arc distance of 31.74 feet to a
point on the northerly line of Baum Boulevard, S.R. 0400, 60 feet wide’ thence
along the northerly line of Baum Boulevard, S.R. 0400, 60 feet wide, South 70°
33’ 00” West, 128.93 feet to a point on the easterly line of South Aiken Avenue,
50 feet wide; thence along the easterly line of South Aiken Avenue, 50 feet
wide, by an arc of a circle deflecting to the right in a northwestwardly
direction, having a radius of 15 feet an arc distance of 31.25 feet to a point;
thence continuing along the easterly line of South Aiken Avenue, 50 feet wide,
North 9° 55’ 20” East, 210.66 feet to a point at the place of BEGINNING.

 

Exhibit “B”-2

 

EXHIBIT “C”

 

 

 

INTENTIONALLY OMITTED

 

 

Exhibit “C”

 

 

EXHIBIT “D”

 

ESCROW INSTRUCTIONS

 

This ESCROW AGREEMENT (this “Agreement”) is dated as of January 30, 2013 (the
“Effective Date”), by and among MOODY NATIONAL CY SHADYSIDE S, LLC, a Delaware
limited liability company (“Moody S”), and MOODY NATIONAL CY SHADYSIDE MT, LLC,
a Delaware limited liability company (“Moody MT”, and together with Moody S,
collectively referred to as “Seller”), and CWI SHADYSIDE HOTEL, LLC, a Delaware
limited liability compan (together with its successors and assigns, “Purchaser”;
Seller and Purchaser, collectively, the “Other Parties”) and FIRST AMERICAN
TITLE INSURANCE COMPANY (“Escrow Agent”; the Other Parties and Escrow Agent,
collectively, the “Parties”).

 

RECITALS

 

A.           Reference hereby is made to that Purchase and Sale Agreement, dated
as of the date hereof (the “Contract”), between Seller and Purchaser with
respect to the proposed sale of certain real and personal property comprising
the Courtyard by Marriott - Shadyside located at 5308 Liberty Avenue,
Pittsburgh, Pennsylvania (the “Hotel”) to Purchaser. Any capitalized terms not
defined herein shall have the meanings ascribed to them in the Contract.

 

B.           Section 2.3.2 of the Contract provides that Purchaser shall deposit
into escrow amounts equal to (i) $750,000 no later than 5:00 p.m. (Eastern Time)
on the date three (3) business days after the Effective Date (the “Good Faith
Deposit”); and (ii) if Purchaser has not then terminated the Contract, $742,500
no later than 5:00 p.m. (Eastern Time) on February 18, 2013 (the “Second
Deposit” and, together with the Good Faith Deposit, collectively, the “Earnest
Money Deposit”) to be held and disposed in accordance with the terms of this
Agreement and the Contract pending the closing of the sale of the Hotel to
Purchaser in accordance with the terms and provisions of the Contract.

 

C.  Seller and Purchaser wish to appoint Escrow Agent to serve as escrow agent
and Escrow Agent has agreed to serve as escrow agent and to hold and dispose the
aforementioned deposits in accordance with the terms hereof.

 

NOW, THEREFORE, in consideration of ten dollars and other good and valuable
consideration, the receipt and sufficiency whereof are hereby acknowledged, the
Parties hereby agree as follows:

 

1.            WIRE TRANSFER TO ESCROW AGENT; DELIVERY OF DEPOSIT.

 

(a)   Upon the execution of this Agreement, Purchaser will cause the Good Faith
Deposit to be wire transferred to Escrow Agent on or before 5:00 p.m. (Eastern
Time) on the date three (3) business days after the Effective Date in accordance
with the wiring instructions furnished by Escrow Agent and attached hereto as
Exhibit A.

 

(b)  In the event that Purchaser has not then terminated the Contract, then not
later than 5:00 p.m. (Eastern Time) on February 18, 2013, Purchaser will cause
the Second Deposit to be wire transferred to Escrow Agent in accordance with the
wiring instructions furnished by Escrow Agent and attached hereto as Exhibit A.

 

Exhibit “D”

 

 

(c)  Escrow Agent agrees to deposit the Good Faith Deposit and the Second
Deposit into an interest-bearing account at a federally insured state or
national bank and will credit interest thereon in accordance with a completed
and executed W-9 form received from Seller or Purchaser, as the case may be.

 

2.            RELEASE AND DISBURSEMENT OF ESCROW FUNDS.

 

(a)  Escrow Agent agrees that it will release or disburse the Earnest Money
Deposit only (i) in accordance with joint instructions executed by Seller and
Purchaser or their respective attorneys, (ii) in accordance with
Section 2(b) below, (iii) in accordance with Section 2(c) below, or (iv) as
provided in Section 3(viii) below.  Other than as provided in the preceding
sentence, Escrow Agent will not release or disburse the Earnest Money Deposit to
any person.  Upon receipt of a demand for the Earnest Money Deposit made by
Seller or Purchaser, Escrow Agent shall promptly send a copy thereof to the
other party along with a notice stating Escrow Agent’s intention to pay the
Earnest Money Deposit to the Claiming Party (as defined below) (a “Demand
Notice”).

 

(b)  If the Closing is consummated under the Contract, then on the Closing Date,
Escrow Agent shall disburse the Earnest Money Deposit to Seller and Purchaser
shall receive a credit against the Purchase Price in an amount equal to the
Earnest Money Deposit.

 

(c)  If (i) Purchaser terminates the Agreement in accordance with Sections
2.6.3, 2.7.1, 2.7.2, 2.8, 3.1 or 8.1 of the Contract, Escrow Agent shall deliver
that portion of the Earnest Money Deposit held by Escrow Agent to Purchaser,
(ii) the Closing contemplated under the Contract does not take place as the
result of a Seller default as set forth in Section 5.2, Escrow Agent shall
deliver that portion of the Earnest Money Deposit held by Escrow Agent to
Purchaser, (iii) the Closing contemplated under the Contract does not take place
as the result of a Purchaser default as set forth in Section 5.1, Escrow Agent
shall deliver that portion of the Earnest Money Deposit held by Escrow Agent to
Seller; provided, however, that prior to distributing the Earnest Money Deposit
to any party (the “Claiming Party”) pursuant to the provisions of this
Section 2(c), Escrow Agent shall deliver the Demand Notice to the other party
(the “Non-Claiming Party”).

 

The Non-Claiming Party shall have a period of ten (10) days from receipt of the
Demand Notice in which to deliver notice to the Escrow Agent agreeing to payment
of the Earnest Money Deposit to the Claiming Party or disagreeing with such
payment.  If the Non-Claiming Party agrees that the Earnest Money Deposit shall
be paid to the Claiming Party, then Escrow Agent shall so pay the Earnest Money
Deposit to the Claiming Party.  If the Non-Claiming Party disagrees with such
payment, then Escrow Agent shall not make such payment and shall continue to
hold the Earnest Money Deposit and shall not make any disposition of the Earnest
Money Deposit except as provided in Sections 2(a)(i) or 2(a)(iii).  The failure
of the Non-Claiming Party to deliver a notice within the foregoing ten (10) day
period shall be deemed delivery of a notice on the last day of such ten (10) day
period agreeing to payment of the Earnest Money Deposit to the Claiming Party.

 

3.            LIMITATION OF LIABILITY OF ESCROW AGENT.

 

The Other Parties agree: (i) in holding the Earnest Money Deposit, Escrow Agent
is acting as a stakeholder at the request of and as an accommodation to the
Other Parties and Escrow Agent is not responsible or liable in any manner
whatever for the sufficiency, correctness, genuineness or validity or the
subject matter of any agreement by, between or among the Other Parties;
(ii) Escrow Agent will deposit the Earnest Money Deposit in a segregated
interest-bearing account; (iii) jointly and severally to indemnify and hold
harmless Escrow Agent from any loss,

 

Exhibit “D”

 

 

claim, expense or damage (including reasonable attorneys’ fees) incurred in
connection with the performance of Escrow Agent’s duties hereunder, except for
Escrow Agent’s bad faith, willful misconduct or negligence; (iv) subject to the
provisions of Section 2(c) above, Escrow Agent may rely upon any Demand Notice
received from either Seller or Purchaser; (v) Escrow Agent shall be protected in
acting upon any written notice, request, waiver, consent, certificate, receipt,
authorization, power of attorney or other document which Escrow Agent in good
faith believes to be genuine and what it purports to be; (vi) Escrow Agent may,
at its own expense, consult with legal counsel in the event of any dispute or
questions as to the construction of any of the provisions hereof or its duties
hereunder; and it shall be fully protected in acting in accordance with the
opinion and instruction of such counsel; (vii) Escrow Agent shall not be
responsible in any manner for the validity or sufficiency of any cash,
instruments, wire transfer or any other property delivered to it hereunder, or
for the value or collectability of any check or other instrument so delivered or
for any representation made or obligations assumed by any Other Party and
nothing herein shall be deemed to obligate Escrow Agent to deliver any cash or
wire any funds or release any documents unless the same shall have first been
received by Escrow Agent pursuant to this Agreement; and (viii) in the event of
a dispute among or between any of the Other Parties, Escrow Agent may at its
option take any of the following actions (A) continue to hold the Earnest Money
Deposit pursuant to the terms hereof, or (B) at the joint and several cost and
expense of the Other Parties, deposit the Earnest Money Deposit into a court of
competent jurisdiction.  Upon such deposit of the Earnest Money Deposit in
accordance with (B), Escrow Agent shall be relieved and discharged of any
further obligations and responsibilities under this Agreement.

 

4.            NOTICES.

 

All communications herein provided for or made pursuant hereto shall be in
writing and shall be hand delivered, sent by nationally recognized overnight
courier or transmitted by facsimile or electronic mail (with hard copy
confirmation by overnight courier; provided, that, receipt of a hard copy
confirmation by overnight courier shall not be required for notice to be
effective), addressed to the party to be so notified in accordance with the
addresses contained in Section 9.2 of the Contract.  Any Party may change the
address or fax number where notices are to be sent by giving the other parties
five (5) days prior written notice of such change.

 

5.            MISCELLANEOUS.

 

This Agreement (i) shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, (ii) shall be governed by
the laws of the State of New York, (iii) may not be changed orally, but only by
a writing signed by all of the parties hereto, (iv) may be executed in two
(2) or more counterparts, each of which shall be deemed an original, and all
such counterparts shall together constitute one and the same instrument and
(v) may be executed by facsimile signatures.  In the event of any inconsistency
between the terms of this Agreement and the terms of the Contract, the terms of
the Contract shall control and be binding.

 

Exhibit “D”

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be
executed and delivered on the day and year first above written.

 

 

 

ESCROW AGENT:

 

 

 

FIRST AMERICAN TITLE INSURANCE COMPANY,

 

a _____________________________________

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

SELLER:

 

 

 

MOODY NATIONAL CY SHADYSIDE S, LLC,

 

a Delaware limited liability company

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

MOODY NATIONAL CY SHADYSIDE MT, LLC,

 

a Delaware limited liability company

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

PURCHASER:

 

 

 

CWI SHADYSIDE HOTEL, LLC,

 

a Delaware limited liability company

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

Exhibit “D”

 

 

EXHIBIT A to Escrow Agreement

 

Wire Instructions

 

 

 

Bank:

 

JP Morgan Chase

 

 

717 Travis

 

 

Mail Code TX2S085

 

 

Houston, TX 77002

 

 

 

Bank Contact:

 

Carrie Perez

 

 

(713) 216-7869

 

 

 

 

 

 

ABA No.:

 

021 000 021

 

 

 

Swift ID:

 

CHASUS33

 

 

 

Account Name:

 

First American Title Insurance Company

 

 

 

Account No.:

 

08806365902

 

 

 

Ref.: Title No.:

 

NCS-587396

 

Exhibit “D”

 

 

EXHIBIT “E”

 

AUDIT REQUEST MATERIALS

 

[Attached]

 

 

Exhibit “E”

 

 

EXHIBIT “F”

 

AUDIT REPRESENTATION LETTER

 

 

 

________ ___, 2013

 

McGladrey LLP

 

1 South Wacker Drive

Suite 800

Chicago, IL 60606

 

This representation letter is provided in connection with your audits of the
financial statements of [CLIENT NAME] (the “Company”) which comprise the balance
sheet as of December 31, 2012 and 2011 and the related statements of income and
comprehensive income, members’ equity, cash flows, and the related notes to the
financial statements for the years then ended.  We confirm that we are
responsible for the fair presentation in the financial statements of financial
position, results of operations, and cash flows in conformity with accounting
principles generally accepted in the United States of America (U.S. GAAP).

 

We confirm, to the best of our knowledge and belief, as of [DATE OF AUDITOR’S
REPORT], the following representations made to you during your audit:

 

Financial Statements

 

1.            We have fulfilled our responsibilities, as set out in the terms of
the audit arrangement letter dated [DATE], for the preparation and fair
presentation of the financial statements referred to above in accordance with
accounting principles generally accepted in the United States of America.

 

2.            We acknowledge our responsibility for the design, implementation,
and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement,
whether due to fraud or error.

 

3.            We acknowledge our responsibility for the design, implementation,
and maintenance of internal control to prevent and detect fraud.

 

4.            Significant assumptions used by us in making accounting estimates,
including those measured at fair value, are reasonable.

 

5.            Related party relationships and transactions have been
appropriately accounted for and disclosed in accordance with the requirements of
U.S. GAAP.

 

6.            The effects of uncorrected misstatements are immaterial, both
individually and in the aggregate, to the financial statements as a whole.  A
list of the uncorrected misstatements is attached to the representation letter.

 

7.            The effects of all known actual or possible litigation and claims
have been accounted for and disclosed in accordance with U.S. GAAP.

 

8.            The following have been properly recorded and/or disclosed in the
financial statements:

 

a.             Guarantees, whether written or oral, under which the Company is
contingently liable.

 

Exhibit “F”

 

 

b.            Arrangements with financial institutions involving compensating
balances or other arrangements involving restrictions on cash balances.

 

c.             Lines of credit or similar arrangements.

 

d.            Agreements to repurchase assets previously sold.

 

e.             Security agreements in effect under the Uniform Commercial Code.

 

f.              All other liens or encumbrances on assets and all other pledges
of assets.

 

g.             Amounts of contractual obligations for plant construction and/or
purchase of real property, equipment, other assets, and intangibles.

 

h.            Investments in debt and equity securities, including their
classification as trading, available for sale, and held to maturity.

 

i.                All liabilities that are subordinated to any other actual or
possible liabilities of the Company.

 

j.                Anticipated withdrawals of funds in material amounts from the
Limited Liability Company for any reason.

 

k.            All leases and material amounts of rental obligations under
long-term leases.

 

l.                All significant estimates and material concentrations known to
management that are required to be disclosed in accordance with the Risks and
Uncertainties Topic of the FASB Accounting Standards Codification. Significant
estimates are estimates at the balance sheet date that could change materially
within the next year. Concentrations refer to volumes of business, revenues,
available sources of supply, or markets for which events could occur that would
significantly disrupt normal finances within the next year.

 

m.        Derivative financial instruments.

 

n.            Assets and liabilities measured at fair value in accordance with
the Fair Value Measurements and Disclosures Topic of the FASB Accounting
Standards Codification.

 

o.            All current and deferred assets and liabilities related to the
accounting for income taxes.  Additionally, we have evaluated the tax positions
under the two-step approach for recognition and measurement of uncertain tax
positions required by the Income Taxes Topic of the FASB Accounting Standards
Codification.

 

Information Provided

 

9.            We have provided you with:

 

a.             Access to all information, of which we are aware that is relevant
to the preparation and fair presentation of the financial statements such as
records, documentation, and other matters.

 

b.            Additional information that you have requested from us for the
purpose of the audit.

 

c.             Unrestricted access to persons within the entity from whom you
determined it necessary to obtain audit evidence.

 

d.            Any minutes of the meetings of stockholders, directors, and
committees of directors, or summaries of actions of recent meetings for which
minutes have not yet been prepared.

 

Exhibit “F”-2

 

10.    All transactions have been recorded in the accounting records and are
reflected in the financial statements.

 

11.    We have no knowledge of allegations of fraud or suspected fraud,
affecting the entity’s financial statements involving:

 

a.             Management.

 

b.            Employees who have significant roles in the internal control.

 

c.             Others where the fraud could have a material effect on the
financial statements.

 

12.    We have no knowledge of any allegations of fraud or suspected fraud
affecting the Company’s financial statements received in communications from
employees, former employees, analysts, regulators, short sellers, or others.

 

13.    We have no knowledge of noncompliance or suspected noncompliance with
laws and regulations whose effects should be considered when preparing financial
statements.

 

14.    We are not aware of any pending or threatened litigation and claims whose
effects should be considered when preparing the financial statements and we have
not consulted legal counsel concerning litigation or claims.

 

15.    We have disclosed to you the identity of the entity’s related parties and
all the related-party relationships and transactions of which we are aware.

 

16.    We are aware of no significant deficiencies, including material
weaknesses, in the design or operation of internal controls that could adversely
affect the Company’s ability to record, process, summarize, and report financial
data.

 

17.    There have been no communications from regulatory agencies concerning
noncompliance with, or deficiencies in, financial reporting practices.

 

18.    We have no plans or intentions that may materially affect the carrying
value or classification of assets.  In that regard, long-lived assets, including
intangibles, that are impaired or to be disposed of have been recorded at the
lower of their cost or fair value.

 

19.    We are responsible for making the accounting estimates included in the
financial statements.  Those estimates reflect our judgment based on our
knowledge and experience about past and current events and our assumptions about
conditions we expect to exist and courses of action we expect to take.

 

20.    There are no:

 

a.             Violations or possible violations of laws or regulations whose
effects should be considered for disclosure in the financial statements or as a
basis for recording a loss contingency. In that regard, we specifically
represent that we have not been designated as, or alleged to be, a “potentially
responsible party” by the Environmental Protection Agency in connection with any
environmental contamination.

 

b.            Other material liabilities or gain or loss contingencies that are
required to be accrued or disclosed by the Contingencies Topic of the FASB
Accounting Standards Codification.

 

21.    The Company has satisfactory title to all owned assets.

 

22.    We have complied with all aspects of contractual agreements that would
have a material effect on the financial statements in the event of
noncompliance.

 

Exhibit “F”-3

 

23.    We agree with the findings of specialists in evaluating [DESCRIBE ALL
SIGNIFICANT ASSERTIONS FOR WHICH SPECIALISTS’ WORK WAS USED] and have adequately
considered the qualifications of the specialists in determining the amounts and
disclosures used in the financial statements and underlying accounting records.
We did not give or cause any instructions to be given to specialists with
respect to the values or amounts derived in an attempt to bias their work, and
we are not otherwise aware of any matters that have had an impact on the
independence or objectivity of the specialists.

 

24.    In considering the disclosures that should be made about risks and
uncertainties, we have concluded that the following are required:

 

[DESCRIBE THE SIGNIFICANT ESTIMATES AND CURRENT VULNERABILITY DUE TO CERTAIN
CONCENTRATIONS THAT ARE DISCLOSED.]

 

25.    We are responsible for determining that significant events or
transactions that have occurred since the balance sheet date and through [DATE
OF MANAGEMENT’S EVALUATION AS DISCLOSED IN THE FINANCIAL STATEMENTS], have been
recognized or disclosed in the financial statements. No events or transactions
[other than those disclosed in the [consolidated] [combined] financial
statements] have occurred subsequent to the balance sheet date and through [DATE
OF MANAGEMENT’S EVALUATION AS DISCLOSED IN THE FINANCIAL STATEMENTS] that would
require recognition or disclosure in the [consolidated] [combined] financial
statements. We further represent that as of [DATE OF MANAGEMENT’S EVALUATION AS
DISCLOSED IN THE FINANCIAL STATEMENTS], the financial statements were complete
in a form and format that complied with accounting principles generally accepted
in the United States of America, and all approvals necessary for issuance of the
financial statements had been obtained.

 

26.    During the course of your audit, you may have accumulated records
containing data that should be reflected in our books and records. All such data
have been so reflected. Accordingly, copies of such records in your possession
are no longer needed by us.

 

[CLIENT NAME]

 

 

[NAME OF CHIEF EXECUTIVE OFFICER AND TITLE OR EQUIVALENT]

 

 

[NAME OF CHIEF FINANCIAL OFFICER AND TITLE OR EQUIVALENT]

 

 

[NAME OF OTHER INDIVIDUALS RESPONSIBLE FOR AND KNOWLEDGEABLE ABOUT THE MATTERS
COVERED BY THE REPRESENTATIONS]

 

Exhibit “F”-4

 

EXHIBIT “G”

 

DRAFT CLOSING STATEMENT

 

[Attached]

 

Exhibit “G”

 

 

EXHIBIT “H”

 

BILL OF SALE
(5308 Liberty Avenue, Pittsburgh, Pennsylvania)

 

 

MOODY NATIONAL CY SHADYSIDE S, LLC, a Delaware limited liability company (“Moody
S”), and MOODY NATIONAL CY SHADYSIDE MT, LLC, a Delaware limited liability
company (“Moody MT”, and together with Moody S, collectively referred to as
“Seller”), in consideration of the purchase price paid by CWI SHADYSIDE HOTEL,
LLC, a Delaware limited liability company (“Purchaser”), as set forth in that
certain Purchase and Sale Agreement dated January 30, 2013 (as amended and/or
assigned, the “Agreement”), the terms of which are incorporated herein by
reference, the receipt and sufficiency of such consideration being hereby
acknowledged, has sold and assigned, and by this Bill of Sale does hereby grant,
assign and set over to Purchaser, its representatives, successors and assigns,
without representation or warranty except as expressly set forth in the
Agreement, and subject to the terms of the Agreement, all of the following
assets located at 5308 Liberty Avenue, Pittsburgh, Pennsylvania, on which are
constructed such improvements in, by and through which is operated a hotel and
hospitality business commonly known as “Courtyard by Marriott - Shadyside:”

 

The Personal Property (as defined in the Agreement).

 

To have and to hold same unto Purchaser, its representatives, successors and
assigns forever.

 

 

 

[The Remainder of This Page Has Been Intentionally Left Blank]

 

EXHIBIT “H”

 

 

IN WITNESS WHEREOF, this Bill of Sale is executed this ____ day of February,
2013.

 

 

MOODY NATIONAL CY SHADYSIDE S, LLC,

 

a Delaware limited liability company

 

 

 

By:

 

 

 

Name:

 

 

 

Title: 

 

 

 

 

 

MOODY NATIONAL CY SHADYSIDE MT, LLC,

 

a Delaware limited liability company

 

 

 

By:

 

 

 

Name:

 

 

 

Title: 

 

 

 

Exhibit “H”

 

 

EXHIBIT “I”

 

FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT AFFIDAVIT

 

CERTIFICATE OF NON FOREIGN STATUS

 

Section 1445 of the Internal Revenue Code provides that a transferee (buyer) of
a U.S. real property interest must withhold tax if the transferor (seller) is a
foreign person.  For U.S. tax purposes (including Section 1445), the owner of a
disregarded entity (which as legal title to a U.S. real property interest under
local law) will be the transferor of the property and not the disregarded
entity.  To inform the transferee (buyer) that withholding of tax is not
required upon the disposition of a U.S. real property interest by
________________________________________ (“Transferor”), the undersigned hereby
certifies the following on behalf of Transferor:

 

1.  Transferor is not a foreign corporation, foreign partnership, foreign trust,
or foreign estate (as those terms are defined in the Internal Revenue Code and
Income Tax Regulations).  Transferor is not a “disregarded entity” (as such term
is defined in the Internal Revenue Code and Income Tax Regulations).

 

2.                                    Transferor’s U.S. employer identification
number is ________________.

 

3.                                    Transferor’s office address is:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.                                    Transferor is not a disregarded entity as
defined in Section 1.1445-2(b)(2)(iii).

 

5.                                    Transferor understands that this
certification may be disclosed to the Internal Revenue Service by the transferee
(buyer) and that any false statement contained herein could be punished by fine,
imprisonment, or both.

 

Under penalties of perjury, the undersigned declares that he has examined this
certification and to the best of his knowledge and belief it is true, correct
and complete, and he further declares that he has the authority to sign this
document on behalf of Transferor.

 

Exhibit “I”

 

 

Executed as of the ___ day of __________, 2013, at ____________, ______________.

 

 

TRANSFEROR:

 

 

 

____________________________

 

a __________________________

 

 

 

By:

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

Title:

 

 

EXHIBIT “J”

 

ASSIGNMENT AND ASSUMPTION OF CONTRACTS AND PERMITS
(5308 Liberty Avenue, Pittsburgh, Pennsylvania)

 

This ASSIGNMENT AND ASSUMPTION OF CONTRACTS AND PERMITS (the “Assignment”) is
dated the ____ day of February, 2013, and is made by and between MOODY NATIONAL
CY SHADYSIDE S, LLC, a Delaware limited liability company (“Moody S”), and MOODY
NATIONAL CY SHADYSIDE MT, LLC, a Delaware limited liability company (“Moody MT”,
and together with Moody S, collectively referred to as “Assignor”), and CWI
SHADYSIDE HOTEL, LLC, a Delaware limited liability company (“Assignee”).

 

RECITALS

 

A.           Assignor and Assignee are parties to that certain Purchase and Sale
Agreement dated January 30, 2013 (as amended and/or assigned, the “Agreement”)
pursuant to which Assignor has agreed to sell to Assignee, and Assignee has
agreed to purchase from Assignor, all of Assignor’s right title and interest in
and to that certain Property (as defined in the Agreement) located at and more
commonly known as 5308 Liberty Avenue, Pittsburgh, Pennsylvania, on which are
constructed such improvements in, by and through which is operated a hotel and
hospitality business commonly known as “Courtyard by Marriott - Shadyside” (the
“Hotel”).

 

B.           The Hotel and/or the Property are the subject of certain contracts,
leases and permits as referenced in the Agreement (collectively the “Contracts
and Permits”), used and/or executed in connection with the ownership and/or
operation of the Hotel and/or the Property.

 

C.           The effectiveness of this Assignment is dependent upon consummation
of the sale, transfer and delivery of the Property to Assignee pursuant to the
Agreement, and will not supersede any of the obligations of the parties under
the Agreement.

 

D.           All capitalized terms shall have the meanings ascribed to them in
the Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing recitals, the mutual benefits
accruing to the parties hereto, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, it is hereby agreed as
follows:

 

I

 

ASSIGNMENT

 

1.1         Effective Date.  This Assignment shall take effect at and as of the
date hereof, and incorporates by this reference all covenants and obligations of
Assignor and Assignee contained in the Agreement with respect to the Contracts
and Permits which imply or require performance on and after the date hereof.

 

1.2         Assignment of Contracts and Permits.  Assignor hereby assigns and
transfers to Assignee all of its rights and obligations, in, under and to all of
the Contracts and Permits, without representation or warranty except as
expressly set forth in the Agreement and subject to the terms of the Agreement,
and delegates to Assignee all of its duties thereunder.

 

 

1.3         Assumption of Contracts and Permits.  Assignee hereby accepts the
assignment made hereby and assumes and agrees to pay and perform, as a direct
obligation, all sums, payments, duties and obligations required to be paid and
performed on and after the date hereof by Assignor under the Contracts and
Permits assigned hereby to the same extent as if Assignee had been an original
party thereto.

 

1.4         Indemnification.  Assignor agrees to indemnify and hold Assignee
harmless from and against all damages, losses, claims and liabilities (including
attorneys’ fees) pertaining to or arising in connection with the Contracts and
Permits from actions or omissions occurring prior to the date hereof.  Assignee
agrees to indemnify and hold Assignor harmless from and against all damages,
losses, claims and liabilities (including attorneys’ fees) pertaining to or
arising in connection with the Contracts and Permits from actions or omissions
occurring on or after the date hereof.

 

1.5         Further Assurances.  Whenever and so often as requested by a party,
the other party will promptly execute and deliver or cause to be executed and
delivered all such other and further instruments, documents or assurances, and
promptly do or cause to be done all such other and further things as may be
necessary and reasonably required in order to further and more fully vest in
such requesting party all rights, interests, powers, benefits privileges and
advantages conferred or intended to be conferred upon it by this Assignment.

 

1.6         Successors and Assigns.  The rights and obligations of the parties
hereto shall be for the benefit of, and binding upon, the successors and assigns
of the parties hereto.

 

1.7         Governing Law.  This Assignment shall be governed by and construed
in accordance with the laws of the State of Pennsylvania applicable to
agreements made and to be wholly performed within said state.

 

II

 

COUNTERPARTS

 

This Assignment may be executed in any number of counterparts and by different
parties hereto in separate counterparts and delivered by facsimile, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.  This Assignment shall become effective upon the due
execution and delivery of this Assignment to the parties hereto.

 

[The Remainder of This Page Has Been Intentionally Left Blank]

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Assignment the day and
year first above written.

 

 

ASSIGNOR:

 

 

 

MOODY NATIONAL CY SHADYSIDE S, LLC,

 

a Delaware limited liability company

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

MOODY NATIONAL CY SHADYSIDE MT, LLC,

 

a Delaware limited liability company

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

ASSIGNEE:

 

 

 

CWI SHADYSIDE HOTEL, LLC,

 

a Delaware limited liability company

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

EXHIBIT “K”

 

 

ASSIGNMENT OF INTANGIBLE PROPERTY
(5308 Liberty Avenue, Pittsburgh, Pennsylvania)

 

This ASSIGNMENT OF INTANGIBLE PROPERTY (the “Assignment”) is dated the ____ day
of February, 2013, and is made by and between MOODY NATIONAL CY SHADYSIDE S,
LLC, a Delaware limited liability company (“Moody S”), and MOODY NATIONAL CY
SHADYSIDE MT, LLC, a Delaware limited liability company (“Moody MT”, and
together with Moody S, collectively referred to as “Assignor”), and CWI
SHADYSIDE HOTEL, LLC, a Delaware limited liability company (“Assignee”).

 

RECITALS

 

A.           Assignor and Assignee have previously entered into that certain
Purchase and Sale Agreement dated January 30, 2013 (as amended and/or assigned,
the “Agreement”), pursuant to which Assignor has agreed to sell to Assignee, and
Assignee has agreed to purchase from Assignor, all of Assignor’s right title and
interest in and to that certain real and personal property (as defined in the
Agreement) located at and more commonly known as 5308 Liberty Avenue,
Pittsburgh, Pennsylvania, on which are constructed such improvements in, by and
through which is operated a hotel and hospitality business commonly known as
“Courtyard by Marriott - Shadyside” (the “Hotel”).

 

B.           The effectiveness of this Assignment is dependent upon the sale,
transfer and delivery of the Property to Assignee pursuant to the Agreement, and
will not supersede any of the obligations of the parties under the Agreement.

 

C.           All capitalized terms shall have the meanings ascribed to them in
the Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing recitals, the mutual benefits
accruing to the parties hereto, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, it is hereby agreed as
follows:

 

I

 

ASSIGNMENT

 

1.1         Effective Date.  This Assignment shall take effect at and as of the
date hereof, and incorporates by this reference all covenants and obligations of
Assignor and Assignee contained in the Agreement with respect to the Intangible
Property which imply or require performance on and after the date hereof.

 

1.2         Assignment of Intangible Property.  Assignor hereby assigns and
transfers to Assignee, without representation or warranty except as expressly
set forth in the Agreement, and subject to terms of the Agreement, all of its
right, title and interest in and to all of the Intangible Property.

 

1.3         Assumption of Intangible Property.  Assignee hereby accepts the
assignment made hereby and assumes and agrees to perform, as a direct
obligation, all duties and obligations required to be performed on and after the
date hereof by Assignor in connection with the Intangible Property assigned
hereby, to the same extent as if Assignee had been an original party thereto.

 

 

1.4         Further Assurances.  Whenever and so often as requested by a party,
the other party will promptly execute and deliver or cause to be executed and
delivered all such other and further instruments, documents or assurances, and
promptly do or cause to be done all such other and further things as may be
necessary and reasonably required in order to further and more fully vest in
such requesting party all rights, interests, powers, benefits privileges and
advantages conferred or intended to be conferred upon it by this Assignment.

 

1.5         Successors and Assigns.  The rights and obligations of the parties
hereto shall be for the benefit of, and binding upon, the successors and assigns
of the parties hereto.

 

1.6         Governing Law.  This Assignment shall be governed by and construed
in accordance with the laws of the State of Pennsylvania applicable to
agreements made and to be wholly performed within said state.

 

II

 

COUNTERPARTS

 

This Assignment may be executed in any number of counterparts and by different
parties hereto in separate counterparts and delivered by facsimile, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.  This Assignment shall become effective upon the due
execution and delivery of this Assignment to the parties hereto.

 

[The Remainder of This Page Has Been Intentionally Left Blank]

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Assignment the day and
year first above written.

 

 

ASSIGNOR:

 

 

 

MOODY NATIONAL CY SHADYSIDE S, LLC,

 

a Delaware limited liability company

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

MOODY NATIONAL CY SHADYSIDE MT, LLC,

 

a Delaware limited liability company

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

ASSIGNEE:

 

 

 

__________________________________,

 

a Delaware limited liability company

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

EXHIBIT “L”

 

INVESTIGATION DOCUMENTS

 

1)    Annual P&Ls with departmental details for period of ownership through
December 2012

 

2)    Monthly P&Ls with departmental details for 2011 and 2012

 

3)    Monthly 2012 Forecast with actuals through November (through December if
available)

 

4)    Opening balance sheet from 2008 acquisition

 

5)    Year-end balance sheets for period of ownership, November 30, 2012, and
December 31, 2012, when available

 

6)    Latest available balance sheet and detail relating to deferred revenue and
expenses

 

7)    Latest available accounts payable aging report

 

8)    General ledger for 2011 and latest available for 2012

 

9)    Latest available aged receivables report — City and Guest Ledger

 

10) Depository bank statements for the latest twelve-month period available
reconciled to the general ledger

 

11) The monthly state hotel and occupancy tax report for each of the latest
twelve-month period

 

12) Copies of monthly invoices, or other supporting documentation, from
Franchisor detailing revenues, for the latest twelve-month period

 

13) List of all non-recurring, non-operating, or extraordinary expense items
over $10,000 for 2011 and YTD 2012

 

14) If prepared by ADP (or other payroll processing firm) provide the quarterly
federal and state payroll tax returns for 2012 or reconcile the 2012 ADP (or
other payroll processing firm) reports to the general ledger

 

15) Provide detail relating to intercompany and affiliate transactions for YTD
2012

 

16) Provide a list of expenses reimbursed to the owner/manager for YTD 2012

 

17) Provide the latest available bank statement for restricted cash

 

18) 2013 monthly operating budget with detailed departmental breakdown

 

19) Annual (i.e. month of December) STAR Reports for period of ownership through
December 2011 and each month of 2012

 

20) Real and personal property tax bills for 2010, 2011, 2012, and 2013

 

 

21) Copies of any open property tax appeals that have been prepared or filed

 

22) Most recent Personal Property Schedule filed with assessor

 

23) Breakdown of insurance premiums by coverage type for 2011 and 2012

 

24) Loss runs for all insurance coverages for the past 3 years

 

25) List of all vehicles including: year, make, model, VIN number, number of
passengers, mileage, and vehicle use

 

26) Copies of all service contracts

 

27) Copies of all equipment/capital leases

 

28) Copies of all permits & licenses

 

29) Copies of leases

 

30) Copies of most recent health, fire, building and elevator inspection reports

 

31) Copies of all franchise or license agreements

 

32) Copies of most recent environmental reports

 

33) Copies of most recent engineering reports

 

34) Seller’s preliminary report of title

 

35) Survey (as-built), legal description, architectural and engineering plans
and specifications, as well as a site plan with zoning specifications (if in
Seller’s possession)

 

36) Inventory of linen and guest supplies

 

37) Employee census listing all employees by corresponding position, salary or
wage scale, benefits to which they are entitled, accrued benefits including
vacation and any other payments

 

38) A summary of the health insurance program available to employees, including
the scope of benefits offered, the cost of the insurance by employee with a
breakdown of both the employer’s contribution and the employee’s contribution

 

39) A summary of workers’ compensation insurance coverage as well as a summary
of claims experience for each of the last three years

 

40) Most recent group bookings pace report

 

41) Detailed list of advanced reservations and bookings, including name of
party, deposit received, rate guaranteed, dates, status, and other pertinent
information updated through November 2012.

 

42) Capital expenditures for the period of ownership through December 2012

 

 

43) 2013 capital expenditures budget

 

44) Copy of change of ownership PIP

 

45) Copies of the 2012 and 2013 marketing plans

 

46) Market segmentation reports for 2011 and YTD November 2012

 

47) List of top 10 customers based on room nights or revenue for 2011 and YTD
through November 2012

 

48) Brand contribution reports for YTD through November 2012

 

49) Copy of two most recent Quality Assurance reports issued by Courtyard

 

50) December 2011 and December 2012 guest satisfaction reports from Courtyard
(showing monthly and YTD results)

 

51) Photos of the property

 

52) Current levels of inventories of FF&E and Supplies

 

 

EXHIBIT “M”

 

FORM OF DEED

 

THIS INDENTURE

 

Made the _______ day of February, 2013

 

Between

 

MOODY NATIONAL CY SHADYSIDE S, LLC, a Delaware limited liability company, and

 

 

hereinafter called “Grantor”,

 

and

 

CWI SHADYSIDE HOTEL, LLC, a Delaware limited liability company

 

 

hereinafter called “Grantee”,

 

 

 

WITNESSETH, that the said Grantor, in consideration of  the sum of TEN DOLLARS
($10.00) AND OTHER VALUABLE CONSIDERATION to it now paid by the said Grantee,
does grant, bargain, sell and convey unto the said Grantee, its successors and
and assigns,

 

ALL THAT CERTAIN tract of land described on Exhibit “A” attached hereto.

 

TOGETHER with all and singular buildings, improvements, ways, waters, water
courses, easements, agreements, rights, liberties, privileges, hereditaments and
appurtenances whatsoever thereunto belonging, or in any way appertaining, and
the reversions and remainders, rents, issues and profits thereof; and also all
the estate, right, title, interests, use, trust, property, possession, claim and
demand whatsoever of the Grantor, its successors and assigns, in law, equity, or
otherwise, howsoever, of, in, to or out of the same, and every part thereof. TO
HAVE AND TO HOLD the said described hereditaments and the premises hereby
granted and released, or mentioned and intended so to be, with the
appurtenances, unto the Grantee, its successors and assigns, to and for the only
proper use and behoof of the Grantee, its successors and assigns, FOREVER
expressly subject however to the conditions, restrictions, reservations,
covenants, easements, rights of way, declarations, and agreements of record on
the date hereof that affect title to the Property conveyed hereby.

 

AND the Grantor, does covenant, promise and agree, to and with the Grantee, its
successors and assigns, by these presents that the Grantor, will warrant
SPECIALLY the premises hereby granted.

 

 

NOTICE THIS DOCUMENT MAY NOT/DOES NOT SELL, CONVEY, TRANSFER, INCLUDE OR INSURE
THE TITLE TO THE COAL AND RIGHT OF SUPPORT UNDERNEATH THE SURFACE LAND DESCRIBED
OR REFERRED TO HEREIN, AND THE OWNER OR OWNERS OF SUCH COAL MAY HAVE/HAVE THE
COMPLETE LEGAL RIGHT TO REMOVE ALL OF SUCH COAL AND, IN THAT CONNECTION, DAMAGE
MAY RESULT TO THE SURFACE OF THE LAND AND ANY HOUSE, BUILDING OR OTHER STRUCTURE
ON OR IN SUCH LAND.  THE INCLUSION OF THIS NOTICE DOES NOT ENLARGE, RESTRICT OR
MODIFY ANY LEGAL RIGHTS OR ESTATES OTHERWISE CREATED, TRANSFERRED, EXCEPTED OR
RESERVED BY THIS INSTRUMENT.  This notice is set forth in the manner provided in
Section 1 Act of July 17, 1957, P. L. 984 as amended, and is not intended as
notice of in recorded instruments, if any.

 

 IN WITNESS WHEREOF, Grantor has executed these presents on the day and year
first above written.

 

WITNESS:

 

 

MOODY NATIONAL CY SHADYSIDE S, LLC,
a Delaware limited liability company

 

 

___________________________________

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

NOTICE THE UNDERSIGNED, AS EVIDENCED BY THE SIGNATURES(S) TO THIS NOTICE AND THE
ACCEPTANCE AND RECORDING OF THIS DEED, (IS ARE) FULLY COGNIZANT OF THE FACT THAT
THE UNDERSIGNED MAY NOT BE OBTAINING THE RIGHT OF PROTECTION AGAINST SUBSIDENCE,
AS TO THE PROPERTY HEREIN CONVEYED, RESULTING FROM COAL MINING OPERATIONS AND
THAT THE PURCHASED PROPERTY, HEREIN CONVEYED, MAY BE PROTECTED FROM DAMAGE DUE
TO MINE SUBSIDENCE BY A PRIVATE CONTRACT WITH THE OWNERS OF THE ECONOMIC
INTEREST IN THE COAL. THIS NOTICE IS INSERTED HEREIN TO COMPLY WITH THE
BITUMINOUS MINE SUBSIDENCE AND LAND CONSERVATION ACT OF 1966.

 

 

CWI SHADYSIDE HOTEL, LLC,

 

a Delaware limited liability company

 

 

___________________________________

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

COUNTY OF

 

)

 

 

)

SS.:

STATE OF

 

)

 

 

On this, the ______ day of ___________, 2013, before me, the undersigned
officer, personally appeared ______________________, who acknowledged
himself/herself to be the _____________________ of Moody National CY Shadyside
S, LLC, a Delaware limited liability company, and that he/she as such
_________________, being authorized to do so, executed the foregoing instrument
for the purposes therein contained by signing the name of the limited liability
company himself/herself as ____________________.

 

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

 

 

 

 

Notary Public

 

My Commission Expires:

 

 

CERTIFICATE OF RESIDENCE

 

 

I do hereby certify:

 

(1)  that the TAX BILL ADDRESS of the within named Grantee is:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2)  that the OWNER MAILING ADDRESS of the within named Grantee is:

 

c/o Watermark Capital Partners, LLC

272 E. Deerpath Road, Suite 320

Lake Forest, IL, 60045

Attn: Michael Medzigian

 

 

Witness my hand this ___ day of __________________, 2013.

 

 

 

 

 

 

 

 

on behalf of Grantee

 

 

EXHIBIT “A”

 

Property Description

 

ALL that certain parcel of land situated in the City of Pittsburgh, County of
Allegheny and Commonwealth of Pennsylvania, being more particularly described as
follows:

 

[TO BE ADDED]

 

 

SCHEDULE 2.4

 

ALLOCATIONS

 

[TO BE ATTACHED POST-EFFECTIVE DATE PURSUANT TO SECTION 2.4]

 

 

SCHEDULE 3.1.2

 

LIST OF APPROVED LIABILITIES

 

None

 

 

SCHEDULE 3.1.7

 

LITIGATION

 

 

In August 2012, a retroactive settlement real property tax settlement was
reached pertaining to tax years 2009, 2010, 2011, and 2012.  As a result of the
settlement, Moody received supplemental tax bills for additional tax payments
due from the County and the School District.  These payments were due by
December 31, 2012, but have not yet been made.  In accordance with Section
3.1.3, Moody will pay (or otherwise escrow with the Title Company) all
associated supplemental taxes, including penalties and interest that are due on
or have accrued through the Closing.

 

 

SCHEDULE 3.1.8

 

LIST OF VIOLATIONS

 

None

 

 

SCHEDULE 3.1.10

 

CONTRACTS/EQUIPMENT LEASES

 

 

Management Agreement

 

Canon Business Solutions Copier Lease and Maintenance Agreement

 

Alarm Telecommunications Alarm Monitoring Agreement

 

B&R Pools and Swim Shop

 

Cintas Shredding Service Agreement

 

Cintas National Fire Protection Agreement

 

Cintas First Aid Contract

 

Cintas Mat Rental Agreement

 

Comcast Hotel/Motel Bulk Service Agreement

 

Darling Restaurant Services Cooking Oil and Trap Grease Removal Services
Agreement

 

Fibertech Networks Enterpsie Service Contract

 

G&G Fitness Equipment Service Contract

 

Independence Communications, Inc. Service Agreement

 

Independence Communications, Inc. Environmental Scent Service Agreement

 

Lawn Patrol, Inc. Snow and Ice Management

 

Lincoln Waste Solutions, LLC Solid Waste and Recycling Management Program
Agreement

 

Lodgenet Signeture TV Agreement

 

Micro MSA Property Management System Service Agreement

 

Otis Elevator Company Maintenance Agreement

 

Pitney Bowes Stage Meter Rental Agreement

 

Richard Steck Alarm Telecommunications

 

Sani-Products Pest Management Commercial Service Agreement

 

VFM Interactive, Inc. PhotoFlicks Agreement

 

 

SCHEDULE 3.1.11

 

SPACES LEASES

 

Parking Lease

 

Commercial Lease (Mullet-Tenant Project) dated May 15, 2001 by and between
Sierra Liberty Association, LP and Starbucks Corporation.

 

 

SCHEDULE 3.1.12

 

PERMITS

 

 

Hotel Liquor License - Pennsylvania Liquor Control Board for Moody National CY
Shadyside MT, LLC, and Concord Hospitality Enterprise Co.

 

Burglar Alarm Permit - City of Pittsburgh, Department of Finance Courtyard by
Marriott

 

Fire Alarm Permit - City of Pittsburgh, Department of Finance Courtyard by
Marriott

 

Elevator Permit(Certificate of Operation) - #001 - Commonwealth of Pennsylvania,
Department of Labor & Industry, Bureau of Occupational & Industrial Safety,
Elevator Division for Moody National CY Shadyside MT, LLC

 

Elevator Permit (Certificate of Operation) - #002 - Commonwealth of
Pennsylvania, Department of Labor & Industry, Bureau of Occupational &
Industrial Safety, Elevator Division for Moody National CY Shadyside MT, LLC

 

Parking Lot License - City of Pittsburgh, Bureau of Building Inspection for
Moody National CY Shadyside MT, LLC

 

Restaurant Health Permit - Allegheny County, Health Department Courtyard by
Marriott Restaurant and Sierra Liberty Assoc. LP

 

Hotel Rooms Health Department Permit - Allegheny County, Health Department for
Courtyard by Marriott Restaurant and Sierra Liberty Assoc. LP

 

Sales Tax Permit - Commonwealth of Pennsylvania, Department of Revenue for
Shadyside Courtyard by Marriott

 

Spa Permit - Allegheny County, Health Department for Courtyard by Marriott Spa
and Sierra Liberty Assoc. LP

 

Pool Permit - Allegheny County, Health Department for Courtyard by Marriott Pool
and Sierra Liberty Assoc. LP

 

Permit for six (6) signs - City of Pittsburgh, Bureau of Building Inspection,
Department of Public Safety, for Sierra Liberty Assoc. LP and Courtyard by
Marriott Hotel

 

Radio Station Authorization — FCC Wireless Telecommunications Bureau for
Courtyard by Marriott

 

Towing License — City of Pittsburgh for Moody National CY Shadyside S, LLC

 

 

SCHEDULE 3.1.15

 

CONSTRUCTION/DEVELOPMENT LIABILITIES

 

None

 

 

SCHEDULE 3.1.16

 

ENVIRONMENTAL DISCLOSURE

 

September 26, 2006 Phase I Environmental Site Assessment EMG

February 28, 2007 Phase I Environmental Site Assessment EBI Consulting

September 24, 2007 Asbestos Operations & Maintenance Plan EBI Consulting

March 18, 2008 Phase I Environmental Site Assessment Update EBI Consulting