Exhibit 10.12

 

AGREEMENT OF PURCHASE AND SALE

THIS AGREEMENT OF PURCHASE AND SALE (this “Agreement”) is made as of the
Effective Date, by and between TREEMONT CAPITAL PARTNERS III, LP, a Texas
limited partnership (“Seller”),  and Lodging Fund REIT III OP, LP a Delaware
limited partnership with an address of 1635 43rd Street South, Suite 205, Fargo,
North Dakota 58103 (“Purchaser”).

RECITALS:

A.          Seller is the owner of that certain tract of land located at 6004
Marsha Sharp Freeway, Lubbock, Texas 79407, as more particularly described on
Exhibit A attached hereto and made a part hereof, and the improvements situated
thereon, commonly known as the “Home2 Suites by Hilton – Lubbock, TX”  (the
“Hotel”).

B.          Purchaser desires to purchase the above described property from
Seller, and Seller desires to sell the Hotel to Purchaser, for the Purchase
Price (as defined below) and upon the terms and conditions hereinafter set
forth.

NOW, THEREFORE, in consideration of premises and in consideration of the mutual
covenants, promises and undertakings of the parties hereinafter set forth, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by the parties, it is agreed:

ARTICLE I

DEFINITIONS

The following terms shall have the indicated meanings:

1.1         “Accounts Receivable” shall mean all accounts receivable of the
Hotel which are shown on the records of the Hotel.

1.2         “Advance Bookings” shall mean reservations and agreements made or
entered into by Seller prior to Closing and assumed by Purchaser for Hotel rooms
or meeting rooms to be utilized after Closing, or for catering services or other
Hotel services to be provided after Closing, in the ordinary course of business.

1.3         “Affiliate” shall mean any Person that is directly or indirectly
(through one or more intermediaries) controlled by, under common control with,
or controlling another Person.  For the purposes of this definition, “control”
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of any Person or the power to
veto major policy decisions of any Person, whether through the ownership of
voting securities, by contract or otherwise.

1.4         “Agreement” shall have the meaning ascribed to such term in the
Preamble.

1.5         “Assignment and Assumption Agreement” shall mean an assignment and
assumption agreement between Seller and Purchaser in the form attached hereto as
Exhibit B whereby Seller assigns and Purchaser assumes all of Seller's rights,
title and interest in and to the Hotel Agreements and the Advanced Bookings. 

1.6         “Authorizations” shall mean all certificates of occupancy, licenses,
permits, authorizations and approvals required by any governmental or
quasi-governmental agency, body,

department, commission, board, bureau, instrumentality or officer, or otherwise
appropriate with respect to the construction, ownership, operation, leasing,
maintenance, or use of the Property or any part thereof.

1.7         “Bill of Sale and General Assignment” shall mean a bill of sale and
general assignment between Seller and Purchaser in the form attached hereto as
Exhibit C, conveying title to the Personal Property (other than Leased Property)
from Seller to Purchaser, together with any Warranties and Guaranties related
thereto. 

1.8         “Closing” shall mean the consummation of the sale and purchase of
the Property pursuant to this Agreement.

1.9         “Closing Date” shall mean the later of (a) five (45) days following
the expiration of the Study Period,  or (b) ten (10) business days following
Loan Assumption Approval. 

1.10       “Closing Documents” shall mean the documents defined as such in
Article VI.

1.11       “Code” shall mean the Internal Revenue Code of 1986, as amended.

1.12       “Deed” shall mean a special warranty deed in the form attached hereto
as Exhibit D, conveying fee title to the Real Property from Seller to Purchaser,
subject to the Permitted Title Exceptions.

1.13       “Earnest Money” shall have the meaning ascribed to such term in
Section 2.3.

1.14       “Effective Date” (or other similar phrases such as “date of this
Agreement” or “date hereof”) shall mean the first date on which the Escrow Agent
shall have acknowledged receipt of this Agreement fully executed by Seller and
Purchaser.    

1.15       “Escrow Agent” shall mean the Title Company.

1.16       “Existing Financing” shall mean that certain Loan Agreement dated on
or around October 4, 2016 by and between Seller and Lender evidence that certain
loan with a current balance of approximately $8,083,619.95 (as of July
2019) which is secured by a Deed of Trust, Assignment of Leases and Rents, and
Security Agreement. 

1.17       “Final Rooms Revenue” shall mean the final night’s room revenue
(revenue from rooms occupied as of 11:59 a.m. on the Closing Date, exclusive of
food, beverage, telephone and similar charges which shall be retained by
Seller), including any sales taxes, room taxes or other taxes thereon.

1.18       “FIRPTA Certificate” shall mean the affidavit of Seller under
Section 1445 of the Code, as amended.

1.19       “Governmental Authority” shall mean any federal, state, county,
municipal or other government or governmental or quasi-governmental agency,
department, commission, board, bureau, office or instrumentality, foreign or
domestic, or any of the them.

1.20       “Hotel” shall have the definition ascribed to such term in the
Recitals.

1.21       “Hotel Agreements” shall mean collectively the Operating Agreements,
Leased Property Agreements, Off-Site Facility Agreements and the Occupancy
Agreements.

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1.22       “Improvements” shall mean the Hotel and all other buildings,
structures, improvements, and all fixtures, systems, facilities and all other
items of real estate located on the Land.

1.23       “Independent Contract Consideration” shall mean One Hundred and
No/100 Dollars ($100.00) of the Earnest Money which shall be paid by the Escrow
Agent to Seller in the event that Purchaser elects to terminate this Agreement.

1.24       “Insurance Policies” shall mean all policies of insurance maintained
by or on behalf of Seller pertaining to the Property, its operation, or any part
thereof.

1.25       “Intangible Personal Property” shall mean, to the extent assignable,
Seller’s right, title and interest in and to all intangible personal property
owned or possessed by Seller and used in connection with the ownership or
operation of the Property, including, without limitation, (1) Authorizations,
(2) utility and development rights and privileges, general intangibles, business
records, plans and specifications pertaining to the Real Property and the
Personal Property, (3) any unpaid award for taking by condemnation or any damage
to the Land by reason of a change of grade or location of or access to any
street or highway, (4) the share of the Final Rooms Revenue determined under
Section 6.6(h) hereof, and (5) Advance Bookings, excluding Seller’s cash on
hand, in the bank accounts and invested with financial or other institutions.

1.26       “Inventory” shall mean all inventories of food, beverage and
consumable items in opened or unopened cases and all in-use reserve stock of
linens (in no event less than 2 par), towels, paper goods, soaps, cleaning
supplies, office supplies, engineering supplies, maintenance supplies, parts and
tools and other “inventories of merchandise” and “inventories of supplies” as
such terms are defined in the Uniform System of Accounts for Hotels used in
connection with the operation and maintenance of the Hotel.

1.27       “Knowledge”  with respect to Seller, shall mean the actual knowledge
of Philip McRae, without any duty of inquiry or investigation.  For the purposes
of this definition, the term “actual knowledge” means, with respect to any
person, the conscious awareness of such person at the time in question, and
expressly excludes any constructive or implied knowledge of such person. 

1.28       “Land” shall mean that certain parcel of real estate described on
Exhibit A hereof, together with all rights, titles, benefits, easements,
privileges, remainders, tenements, hereditaments, interests, reversions and
appurtenances thereunto belonging or in any way appertaining, and all of the
estate, right, title, interest, claim or demand whatsoever of Seller therein, in
and to adjacent strips and gores, if any, between the Land and abutting
properties, and in and to adjacent streets, highways, roads, alleys or
rights-of-way, and the beds thereof, either at law or in equity, in possession
or expectancy, now or hereafter acquired.

1.29       “Leased Property” shall mean all leased items of Tangible Personal
Property, including items subject to any capital lease, operating lease,
financing lease, or any similar agreement (if any).

1.30       “Leased Property Agreements” shall mean all lease agreements
pertaining to the Leased Property (if any).

1.31       “Lender” shall mean Starwood Mortgage Capital LLC.

1.32       “License Agreement” shall mean the license or franchise agreement
from Licensor with respect to the Hotel.

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1.33       “Licensor” shall mean HLP ESP Franchise LLC. 

1.34       “Loan Assumption Approval” shall mean the receipt of lender’s
approval of the Loan Assumption.

1.35       “Loan Assumption Documents” shall mean all documents required by
Lender to effectuate Purchaser's assumption of the Existing Financing. 

1.36       “Management Agreement” shall mean the management agreement between
Seller and the Manager for the management or operation of the Hotel.

1.37       “Manager” shall mean MH Partners, LLC d/b/a Maximum Hospitality LLC.

1.38       “Occupancy Agreements” shall mean all leases, concession or occupancy
agreements in effect with respect to the Real Property under which any tenants
(other than Hotel guests) or concessionaires have the right to occupy space upon
the Real Property.

1.39       “Off-Site Facility Agreements” shall mean any leases, contracts and
agreements, if any, pertaining to facilities not located on the Property but
which are required and presently used for the operation of the Hotel including,
without limitation, use agreements for local golf courses, and parking or garage
contracts or leases.

1.40       “Operating Agreements” shall mean all service, supply, maintenance
and repair, and other similar contracts in effect with respect to the Property
(other than the Occupancy Agreements, Leased Property Agreements, Management
Agreement and Off-Site Facility Agreements) related to construction, operation,
or maintenance of the Property and the business conducted thereon.

1.41       “Owner’s Title Policy” shall mean an owner’s policy of title
insurance issued to Purchaser by the Title Company, pursuant to which the Title
Company (or any applicable underwriter) insures Purchaser’s ownership of fee
simple title to the Real Property, subject only to Permitted Title Exceptions. 

1.42       “Permitted Title Exceptions” shall mean those exceptions to title to
the Real Property that are satisfactory or deemed satisfactory to Purchaser as
determined pursuant to Section 2.4(e) hereof.

1.43       “Person” shall mean an individual, a partnership, a limited liability
company, a corporation, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a Governmental Authority.

1.44       “Personal Property” shall mean collectively the Tangible Personal
Property and the Intangible Personal Property.

1.45       “Property” shall mean collectively the Real Property and Personal
Property.

1.46       “Purchase Price” shall mean the amount of FOURTEEN MILLION TWO
HUNDRED FIFTY THOUSAND AND NO/DOLLARS ($14,250,000.00) payable in the manner
described in Section 2.2 hereof, which amount shall include the Inventory.

1.47       “Purchaser Parties”  shall mean Purchaser's directors, officers,
lenders, employees, agents, counsel, consultants or representatives.

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1.48       “Purchaser’s Objections” shall mean the objections defined as such in
Section 2.4(e).

1.49       “Real Property” shall mean the Land and the Improvements.

1.50       “Seller’s Response” shall have the meaning ascribed to such term in
Section 2.4(e).

1.51       “Seller’s Response Period” shall have the meaning ascribed to such
term in Section 2.4(e).

1.52       “Study Period” shall mean the period ending at 5:00 p.m., Central
Time, on September 11, 2019.    Except as expressly noted herein to the
contrary, times referred to in this Agreement shall mean the times as in effect,
from time to time, in Lubbock,  Texas. 

1.53       “Submission Matters” shall mean the definition ascribed to such term
in Section 2.4(b) hereof.

1.54       “Tangible Personal Property” shall mean the items of tangible
personal property consisting of all furniture, fixtures, equipment, machinery,
Inventory, all vehicles used in operation of Property and the Hotel and other
tangible personal property of every kind and nature (which does not include
cash-on-hand and petty cash) located at the Hotel and owned or leased by Seller,
including, without limitation, Seller's interest as lessee with respect to any
such leased Tangible Personal Property.

1.55       “Title Commitment” shall mean the title commitment and exception
documents defined as such in Section 2.4(e).

1.56       “Title Company” shall mean Stewart Title Company, 720 W. 11th Street,
Suite 200, Houston, TX  77008, Attn: Kay Street, Kay.Street@stewart.com,
(713) 401-1850.

1.57       “Warranties and Guaranties” shall mean, to the extent assignable, all
of Seller's interest in any existing warranties and guaranties relating to the
development, construction, ownership and operation of the Improvements, the
Tangible Personal Property, the Hotel or any part thereof.

ARTICLE II

PURCHASE AND SALE; DEPOSIT; PAYMENT OF

PURCHASE PRICE; STUDY PERIOD

2.1         Purchase and Sale.  Seller agrees to sell and Purchaser agrees to
purchase the Property for the Purchase Price and in accordance with and subject
to the other terms and conditions set forth herein.

2.2         Payment of Purchase Price.  Purchaser shall pay the Purchase Price,
as adjusted in the manner specified in Article VI and as set forth below, to
Seller (or other party designated by Seller) at Closing by making a wire
transfer of immediately available federal funds to the account of Seller (or
other party designated by Seller).  Such wire transfer shall be sent by
Purchaser to the Escrow Agent for the account of Seller no later than 1:00 p.m.,
Lubbock, Texas, time on the Closing Date.

2.3         Earnest Money.  Within one  (1) business day following the Effective
Date of this Agreement, Purchaser will deliver to the Escrow Agent the sum of
TWO HUNDRED THOUSAND AND NO/100 DOLLARS ($200,000.00), together with all
interest earned thereon are hereinafter collectively referred to as the “Earnest
Money”).  If desired by Purchaser, the Earnest Money shall be invested by the
Escrow Agent in short term interest bearing accounts at banks or other financial

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institutions, which accounts must be insured by the Federal Deposit Insurance
Corporation.  All interest earned on such deposits shall belong to the party (as
between Seller and Purchaser) who is entitled to receive the Earnest Money under
the applicable provisions of this Agreement.  In the event the transactions
contemplated herein are not closed in accordance with the provisions hereof, the
Earnest Money shall be disbursed to either Seller or Purchaser as provided in
this Agreement.

2.4         Existing Financing.

(a)         At the Closing, Purchaser shall assume the Existing Financing.  With
respect to Purchaser’s assumption of Existing Financing, (a) no later than five
(5) business days after the Effective Date, Purchaser shall commence its efforts
to begin the process of the assumption of the Existing Financing by Purchaser
(“Loan Assumption”), including but not limited to providing all reasonable
information concerning the transfer of the Property to Lender (“Assumption
Application”), (b) Purchaser and Seller shall cooperate and use all reasonable
and diligent efforts to cause the Lender (or its loan servicer, as applicable)
to consent to the Loan Assumption and to cause the Seller and all applicable
guarantors, if any, to be released from any and all liability under the Existing
Financing; provided, however, Seller’s cooperation shall be at no cost or
expense to Seller, (c) the Existing Financing shall be credited towards the
Purchase Price, (d) for purposes of determining the amount of the Existing
Financing to be credited toward the Purchase Price, the aggregate of the
outstanding principal balance of the Existing Financing and all accrued and
unpaid interest and late charges or other similar fees, if any, as of the
Closing Date (but expressly excluding the Assumption Fee (defined below)) shall
be aggregated and determined and shall be credited to the Purchase Price and (e)
Purchaser shall be exclusively liable for and shall pay as the same are incurred
(i) the assumption fees and/or costs required by the Lender (or the loan
servicer) and (ii) all fees, expenses and/or costs required by the Lender to
process the Assumption Application and the Loan Assumption (collectively, the
“Assumption Fee”). 

(b)         As a material part of the consideration for this Agreement, Seller
has agreed to relinquish to Purchaser at Closing the sum of $200,000.00 (the
“Retained Reserves”) of the reserves held by Lender under the Existing
Financing. The parties hereby agree and acknowledge that, with the exception of
the Retained Reserves, all reserve accounts held by Lender under the Existing
Financing will not be transferred to Purchaser as part of the Loan Assumption.
Purchaser acknowledges and agrees that any such reserve accounts required under
the Existing Financing in excess of the Retained Reserves will need to
either:  (i) in the event that Lender does not release such funds to Seller, but
instead credits them to Purchaser, be reimbursed by Purchaser to Seller at
Closing, or (ii) in the event that Lender releases such funds to Seller, if
required by Lender, be replenished by Purchaser at Closing.

(c)         Provided that Purchaser timely submitted its Assumption Application
in accordance with Section 2.4(a), and uses continuous, good faith efforts to
obtain the Loan Assumption Approval, in the event Purchaser does not receive
Loan Assumption Approval within one hundred fifty (150) days of the Effective
Date of the Agreement,  then either Purchaser or Seller may terminate this
Agreement by written notice to the other party, whereupon the Earnest Money less
the Independent Contract Consideration shall be refunded to Purchaser, and
neither party shall have any further rights or obligations pursuant to this
Agreement, other than as set forth herein with respect to rights or obligations
that survive termination. 

2.5         Due Diligence.

(a)         Purchaser shall have the right, until 5:00 p.m., Central on the last
day of the Study Period, and thereafter if Purchaser does not notify Seller in
writing prior to the expiration of the Study Period that Purchaser has elected
to terminate this Agreement, to enter upon the Real Property upon not less than
one (1) business day prior notice to Seller, and to perform at Purchaser’s
expense, and subject to

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terms and conditions set forth in Section 2.4(d) below, such economic,
surveying, engineering, topographic, environmental, marketing and other test,
studies and investigations as Purchaser may deem appropriate. Notwithstanding
the foregoing, the Purchaser shall not have the right to interview the
employees, the Manager, or any Hotel guests or licensees or other users or
occupants of the Hotel, without the prior written consent of the Seller, such
consent to be granted or withheld by the Seller’s discretion.   Only if, prior
to the expiration of the Study Period, Purchaser provides written notice, signed
only by Dave Durell, to Seller and Escrow Agent that it has determined in its
sole, absolute and unreviewable discretion, to waive its right of termination
and proceed to closing (the “Satisfaction Notice”), then this Agreement shall
automatically terminate, and Seller and Purchaser shall be released from all
further liability or obligation hereunder except those which expressly survive a
termination of this Agreement. In the event of such termination, the Earnest
Money, less the Independent Contract Consideration, shall be refunded by the
Escrow Agent to Purchaser, and neither party shall have any further rights or
obligations pursuant to this Agreement, other than as set forth herein with
respect to rights or obligations that survive termination.  For the avoidance of
doubt, Purchaser is under no obligation to provide a termination notice, and if
no Satisfaction Notice is provided, this Agreement will automatically terminate.

(b)         Within fourteen (14) days following the Effective Date, Seller will
deliver copies of the due diligence materials listed on Schedule I to
Purchaser (“Submission Matters”) to the extent in Seller’s possession or
control; provided, however, within three (3) business days following the
Effective Date Seller will provide (i) a profit and loss statement for the last
four calendar years (or such less time that the Hotel has been operational),
(ii) a provide and loss statement for the most recent twelve (12) month period
(or the most recent twelve (12) month period for which such reports have been
prepared and (iii) top page of Form 1065 of tax returns (for income and
expenses) for the last three (3) years. 

(c)         If for any reason whatsoever Purchaser does not purchase the
Property, Purchaser shall promptly destroy (and an authorized agent of Purchaser
shall confirm such destruction in writing to Seller) or deliver to Seller, 
copies of the due diligence materials delivered to or copied by Purchaser or
Purchaser Parties however, that Purchaser shall not be obligated to deliver to
Seller any materials of a proprietary nature (such as, for the purposes of
example only, any financial forecast or market repositioning plans) prepared for
Purchaser or Purchaser Parties in connection with the Property.  The terms of
this Section 2.4(c) shall survive the termination of this Agreement.

(d)         Purchaser shall indemnify, hold harmless and defend Seller against
any loss, damage, liability or claim for personal injury or property damage and
any other loss, damage, liability, claim or lien to the extent arising from the
acts upon the Real Property by Purchaser or Purchaser Parties or any agents,
contractors or employees of Purchaser or Purchaser Parties.  Purchaser
understands and accepts that any on-site inspections of the Property shall occur
at reasonable times agreed upon by Seller and Purchaser after not less than one
(1) business day prior notice to Seller and shall be conducted so as not to
interfere unreasonably with the operation of the Property and the use of the
Property by the tenants and the guests of the Hotel.  Seller shall have the
right to have a representative present during any such inspections.  If
Purchaser desires to do any invasive testing at the Property, Purchaser shall do
so only after obtaining the prior written consent of Seller, which approval may
be subject to reasonable terms and conditions as may be proposed by Seller. 
Purchaser shall not permit any liens to attach to the Property by reason of such
inspections.  Purchaser shall (i) restore the Property, at its own expense, to
substantially the same condition which existed prior to any inspections or other
activities of Purchaser thereon; and (ii) be responsible for and pay any and all
liens by contractors, subcontractors, materialmen, or laborers performing the
inspections or any work for Purchaser or Purchaser Parties on or related to the
Property.  Purchaser shall procure and continue in force from and after the date
Purchaser first enters the Property, and continuing throughout the term of this
Agreement, comprehensive general liability insurance with a combined single
limit of not less than $1,000,000 per occurrence, or commercial general
liability insurance, with limits of not less than $1,000,000 per occurrence and
$2,000,000 per event.  Seller shall be included

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and named as an additional insured under such comprehensive general liability or
commercial general liability coverage.  Such insurance shall include:
(i) personal injury liability with employee and contractual exclusions removed;
and (ii) a waiver of subrogation in favor of Seller without exception for the
negligence of any additional insured.  Purchaser will not be permitted to come
onto the Property unless and until Purchaser has provided to Seller a
certificate of insurance evidencing such coverage, the additional insured status
of Seller, and such waiver of subrogation.  The provisions of this
Section 2.4(d) shall survive any termination of this Agreement and a closing of
the transaction contemplated hereby and are not subject to any liquidated damage
limitation on remedies, notwithstanding anything to the contrary in this
Agreement.

(e)         Promptly following the Effective Date, Seller shall cause the Title
Company to furnish to Purchaser and Seller, a title insurance commitment bearing
an effective date not earlier than thirty (30) days prior to the Effective Date
issued by the Title Company covering the Real Property, binding the Title
Company to issue the Owner’s Title Policy together with legible copies (to the
extent such legible copies are available) of all documents identified in such
title insurance commitment as exceptions to title (collectively, the “Title
Commitment”) with respect to the state of title to the Property. Within five (5)
business days following its receipt of the Title Commitment but in no event
later than five (5) business days prior to the expiration of the Study Period,
Purchaser shall notify Seller of any matters identified in the Title Commitment
and the Survey that Purchaser is unwilling to accept (including any defect or
failure of the Title Commitment to comply with requirements of this Section 2.4)
(collectively, the “Purchaser’s Objections”).  Notwithstanding anything herein
to the contrary, Seller shall be obligated to pay and discharge any encumbrances
or obligations arising from delinquent taxes, mortgages, deeds of trust,
security agreements, and discharge or bond around any mechanics’ liens or other
similar liens or charges which were created, consented to, or expressly assumed
by Seller, including without limitation any loans, bonds or due and payable
obligations to municipal or other governmental bodies (excluding the Existing
Loan, the  “Monetary Title Encumbrances”).  No Monetary Title Encumbrances shall
be considered to be a Permitted Title Exception.  For such purposes, Seller may
use all or a portion of the Purchase Price to pay or discharge any such Monetary
Title Encumbrances at the Closing.  Seller may notify Purchaser within five (5)
days after receipt of Purchaser’s Objections (the “Seller’s Response Period”)
whether Seller, in its sole discretion, agrees to cure any of such Purchaser’s
Objections, (the “Seller’s Response”).  If Seller agrees in Seller’s Response
Period to cure any of such Purchaser’s Objections, Seller shall use good faith
efforts (without the obligation to expend any money or incur any liability) to
cure such Purchaser’s Objections which Seller has agreed to use reasonable
efforts to attempt to cure on or before the expiration of the Study Period.  If
Seller is unable to cure such Purchaser’s Objections by the expiration of the
Study Period, Purchaser shall, in its sole and absolute discretion, elect (1) to
waive such Purchaser’s Objections without any abatement in the Purchase Price
and proceed to close or (2) to terminate this Agreement in which case the
parties hereto shall be released from all further obligations hereunder, except
those which expressly survive a termination of this Agreement.  If Seller does
not provide Seller’s Response to Purchaser within Seller’s Response Period,
Seller shall be deemed to have elected not to attempt to cure Purchaser’s
Objections.  If Seller elects in Seller’s Response not to attempt to cure all or
any number of Purchaser’s Objections or if Seller is deemed to have elected not
to attempt to cure Purchaser’s Objections pursuant to the preceding sentence,
upon the expiration of the Study Period, Purchaser shall elect either to
(1) waive any Purchaser’s Objections which Seller has elected or is deemed to
have elected not to attempt to cure without any abatement in the Purchase Price
and proceed to close, or (2) terminate this Agreement in which case the parties
hereto shall be released from all further obligations hereunder, except those
which expressly survive a termination of this Agreement.  In the event Purchaser
does not provide to Seller notice of Purchaser’s election under the preceding
sentence, Purchaser shall be deemed to have elected clause (1) of the preceding
sentence.  In the event of Purchaser’s termination or deemed termination
pursuant to this Section 2.4(e), the Earnest Money, less the Independent
Contract Consideration, shall be refunded by the Escrow Agent to Purchaser
without any further notice to Escrow Agent, and neither party shall have any
further rights or obligations pursuant to this Agreement, other than as set
forth herein with respect to rights or obligations that survive termination.

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2.6                 3-05 Audit.  Seller covenants it will make all reasonable
and good faith efforts to assist Purchaser in any way helpful or necessary for
Purchaser’s third-party auditor (Deloitte) to collect necessary information as
described on Schedule II.

ARTICLE III

SELLER’S REPRESENTATIONS AND WARRANTIES

In order to induce Purchaser to enter into this Agreement and to purchase the
Property, and to pay the Purchase Price therefore and except for and subject to
the information contained in the Submission Matters, Seller hereby makes, to
Seller’s Knowledge, the representations and warranties set forth below.  Each
such representation shall be materially true and correct on the Effective Date
and shall be materially true and correct on the Closing Date, provided that
Seller shall have no liability if, as a result of any changes in facts or
circumstances beyond Seller’s reasonable control, such representations and
warranties are not true as of the Closing Date.

3.1         Organization and Power.  Seller is a limited partnership duly
organized, validly existing and in good standing under the laws of Texas and has
all requisite power and authority to enter into and perform its obligations
hereunder and under any document or instrument required to be executed and
delivered on behalf of Seller hereunder.

3.2         Authorization and Execution.  This Agreement (and all documents
contemplated hereby) has been duly authorized by all necessary action on the
part of Seller, has been duly executed and delivered by Seller, constitutes the
valid and binding agreement of Seller and is enforceable against Seller in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting creditors’
rights generally or by the principles governing the availability of equitable
remedies.  The Person executing this Agreement on behalf of Seller, for and on
behalf of Seller, has the authority to do so.

3.3         Non-contravention.  Subject to any consent to the assignment of any
particular Hotel Agreement required by the terms thereof or by applicable laws
and to the payment in full at Closing of any Monetary Title Encumbrances, the
execution and delivery of, and the performance by Seller of its obligations
under, this Agreement do not and will not contravene, or constitute a default
under, any provision of any applicable law or regulation, Seller’s
organizational documents or any agreement, judgment, injunction, order, decree
or other instrument binding upon Seller or to which the Property is subject, or
result in the creation of any lien or other encumbrance on any asset of Seller.

3.4         Litigation.  There is no action, suit or proceeding, pending or
known to be threatened, against or affecting any Seller in any court or before
any arbitrator or before any Governmental Authority which would materially and
adversely affect the ability of Seller to perform its obligations hereunder, or
under any document to be delivered pursuant hereto.

3.5         Operating Statements. Within three (3) business days of the
Effective Date of this Agreement, Seller shall provide Purchaser with operating
statements concerning the Hotel as of December 31, 2018 and as of the period
ending March 31, 2019.  The Operating Statements were prepared by or for Seller
in the ordinary course of its business in accordance with sound accounting
principles, and, to Seller’s knowledge, represent in all material respects all
income and expenses of the Property for the dates covered thereby.

3.6         Status of Hotel Agreements.  To Seller’s knowledge, Seller is not in
material default under any Hotel Agreement.

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3.7         Labor and Employment Matters.  There are no employees of the Hotel
other than those employees who are employed by Manager with respect to the Hotel
(collectively, the “Employees”).  There are no agreements to which Seller is a
party relating to any labor or collective bargaining agreement affecting the
Hotel. Seller has no employee benefit plans now in effect which are subject to
the provisions of the Employee Retirement Income Security Act of 1974 (ERISA),
as amended.

3.8         Environmental Matters.  Except as disclosed in the Submission
Matters, Seller has not received any written notice from any governmental or
regulatory authority of the presence or release of any substance that is
regulated under any Environmental Laws as a pollutant, contaminant or toxic,
radioactive or otherwise hazardous substance, including petroleum, its
derivatives or by-products and other hydrocarbons (collectively and
individually, “Hazardous Substances”) that would cause the Hotel to be in
violation of any applicable Environmental Laws and that remains uncured. 

3.9         Personal Property. Other than Personal Property subject to the Hotel
Agreements, to Seller’s Knowledge, Seller is the owner of the Personal Property
located at the Hotel and used in connection with the operation of the Hotel.

3.10       Brand Standards. Seller represents that to its Knowledge that the
Hotel is within brand standards in accordance with the Franchise Agreement.

3.11       Seller Is Not a “Foreign Person”.  Seller is not a “foreign person”
or a “disregarded entity” within the meaning of Section 1445 of the Code, as
amended (i.e., Seller is not a foreign corporation, foreign partnership, foreign
trust, foreign estate or foreign person as those terms are defined in the Code
and regulations promulgated thereunder).

3.12               Insurance.  All insurance policies held with respect to the
Property by Seller are valid and in full force and effect.

3.13               Right to Purchase.  Seller has not granted to any Person
other than Purchaser, any right to purchase the Property or any portion thereof
or interest therein

3.14               Condemnation.  There is no pending or threatened condemnation
or similar proceedings affecting the Property. 

3.15               Licenses and Permits. Seller presently possesses all
governmental licenses, permits, certificates of inspection, other
authorizations, filings, and registrations which are necessary for Seller to own
and operate the Hotel as presently conducted; the lack of which would reasonably
be expected to materially adverse effect present use and occupancy of the
Property.

3.16               Insolvency Proceedings. Seller is not involved in any
proceeding by or against Seller in any court under the Bankruptcy Code or any
other insolvency or debtor’s relief act, whether state or federal, or for the
appointment of a trustee, receiver, liquidator, assignee, or other similar
official of Seller or Seller’s property.

The representations and warranties in this Article III shall survive the Closing
for a period of twelve (12) months following the Closing Date (“Limitation
Period”).  If Purchaser first discovers a misrepresentation of any of Seller’s
representations and warranties set forth in this Agreement on a date subsequent
to the Closing Date, but prior to the end of the Limitation Period, Purchaser
must give Seller written notice (the “Breach Notice”) of the breach within
thirty (30) days following the Limitation Period (“Notice Period”) in order for
such breach to form the basis of an action by Purchaser against Seller, and any
such action must be brought within two (2) years and one (1) day after the
Closing Date.  Purchaser

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shall have no cause of action against Seller for any misrepresentation or breach
by Seller if Purchaser fails to give to Seller the Breach Notice for such
misrepresentation or breach during the Notice Period, and Purchaser shall be
deemed to have waived all causes of action for such misrepresentations if
Purchaser fails to bring an action against Seller therefor within two (2) years
and one (1) day after the Closing Date.  Notwithstanding anything herein to the
contrary, (i) Purchaser shall not be entitled to make a claim against Seller for
a breach of the representations and warranties in this Agreement or any of the
closing documents executed in connection with this Agreement unless the amount
of damages to Purchaser equals or exceeds Twenty five Thousand and No/100
Dollars ($25,000.00) in the aggregate of all such claims, and (ii) the
cumulative, maximum amount of liability that Seller shall have to Purchaser for
breaches of the representations and warranties this Agreement and any of the
closing documents executed in connection with this Agreement shall not exceed
one and one-half percent (1.5%) of the Purchase Price in the aggregate.  The
acceptance of the Deed by Purchaser at Closing shall from and after the Notice
Period be deemed to be a full performance and discharge of every representation
and warranty made by Seller and every agreement and obligation on the part of
Seller to be performed in this Agreement, except as to claims timely asserted in
a Breach Notice and where a suit is filed against Seller not later than two (2)
years and one (1) day after the Closing Date.  In the event Purchaser obtains
actual knowledge on or before Closing of any material inaccuracy in any of the
representations and warranties contained in this Article III, Purchaser may as
Purchaser’s sole and exclusive remedy either: (i) terminate this Agreement
whereupon the Earnest Money less the Independent Contract Consideration shall be
refunded to Purchaser, and neither party shall have any further rights or
obligations pursuant to this Agreement, other than as set forth herein with
respect to rights or obligations that survive termination; or (ii) waive any and
all claims against Seller on account of such inaccuracy and close the
transaction.  In the event Purchaser obtains knowledge on or before the Closing
of any inaccuracy in any of the representations and warranties contained in this
Agreement, and Purchaser does not terminate this Agreement on or before Closing,
Purchaser shall be deemed to have waived any and all claims against Seller on
account of such inaccuracy (including the right to terminate this Agreement
following the expiration of the Study Period). The provisions of this paragraph
shall survive Closing. 

 

ARTICLE IV

PURCHASER’S REPRESENTATIONS AND WARRANTIES

In order to induce Seller to enter into this Agreement and to sell the Property,
Purchaser hereby makes the following representations and warranties, each of
which is made to Purchaser’s knowledge:

 

4.1         Organization and Power.  Purchaser is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite power and authority to enter into and perform its
obligations under this Agreement and any document or instrument required to be
executed and delivered on behalf of Purchaser hereunder.

4.2         Authorization and Execution.  This Agreement has been duly
authorized by all necessary action on the part of Purchaser, has been duly
executed and delivered by Purchaser, constitutes the valid and binding agreement
of Purchaser and is enforceable against Purchaser in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency, moratorium
or other similar laws affecting creditors’ rights generally or by the principles
governing the availability of equitable remedies.  The Person executing this
Agreement on behalf of Purchaser has the authority to do so. 

4.3         Non-contravention.  The execution and delivery of this Agreement and
the performance by Purchaser of its obligations hereunder do not and will not
contravene, or constitute a default under, any provisions of applicable law or
regulation, Purchaser’s organizational documents, or

11

any agreement, judgment, injunction, order, decree or other instrument binding
upon Purchaser or result in the creation of any lien or other encumbrance on any
asset of Purchaser.

4.4         Litigation.  There is no action, suit or proceeding, pending or
known to be threatened, against or affecting Purchaser in any court or before
any arbitrator or before any Governmental Authority which would materially and
adversely affect the ability of Purchaser to perform its obligations hereunder,
or under any document to be delivered pursuant hereto.

4.5         OFAC.  Purchaser represents and warrants to Seller that neither
Purchaser nor any affiliate of Purchaser is subject to sanctions of the United
States government or in violation of any federal, state, municipal or local
laws, statutes, codes, ordinances, orders, decrees, rules or regulations
relating to terrorism or money laundering, including, without limitation,
Executive Order No. 13224, 66 Fed. Reg. 49079 (published September 25, 2001)
(the “Terrorism Executive Order”) or is similarly designated under any related
enabling legislation or any other similar Executive Orders (collectively with
the Terrorism Executive Order, the “Executive Orders”), the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 (Public Law 107-56, the “Patriot Act”), any
sanctions and regulations promulgated under authority granted by the Trading
with the Enemy Act, 50 U.S.C. App. 1-44, as amended from time to time, the
International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-06, as amended
from time to time, the Iraqi Sanctions Act, Publ. L. No. 101-513; United Nations
Participation Act, 22 U.S.C. § 287c, as amended from time to time, the
International Security and Development Cooperation Act, 22 U.S.C. § 2349 aa-9,
as amended from time to time, The Cuban Democracy Act, 22 U.S.C. §§ 6001-10, as
amended from time to time, The Cuban Liberty and Democratic Solidarity Act, 18
U.S.C. §§ 2332d and 2339b, as amended from time to time, and The Foreign
Narcotics Kingpin Designation Act, Publ. L. No. 106-120, as amended from time to
time.

4.6          Insolvency Proceedings. Purchaser is not involved in any proceeding
by or against Purchaser in any court under the Bankruptcy Code or any other
insolvency or debtor’s relief act, whether state or federal, or for the
appointment of a trustee, receiver, liquidator, assignee, or other similar
official of Seller or Seller’s property.

4.7          AS IS, WHERE IS.

Purchaser expressly acknowledges and agrees that, AS A MATERIAL PART OF THE
CONSIDERATION FOR THIS AGREEMENT, the Property is being sold to Purchaser and
Purchaser agrees to purchase and accept the Property, and each and every part
and component thereof, in an “AS IS, WHERE IS” condition as of the Closing with
no representations or warranties from Seller, either express or implied except
as expressly set forth IN THIS AGREEMENT.  Purchaser agrees that Purchaser is
not relying upon, and has not received or been given, any representations
(except as expressly set forth IN THIS AGREEMENT), statements or warranties
(oral or written, implied or express) of or by any officer, employee, agent or
representative of Seller, 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

12

Purchaser, for itself and its heirs, legal representatives, successors and
assigns, waives any right to assert any claim or demand against Sellers 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 SOLELY BY SELLER IN VIOLATION OF THIS
AGREEMENT, Purchaser agrees that it shall have no recourse whatsoever against
Seller, at law or in equity, should the Survey or the Title Insurance
Commitments or the Title Policies 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.  Purchaser acknowledges that it shall review
the Survey and the Title Insurance Commitments (as same may be marked at
Closing) and to discuss their contents with the independent contractors who
prepared or issued each of them.  Purchaser accordingly agrees to look solely to
the preparer of the Survey and the issuer of the Title Insurance Commitments and
Title Policies for any claim arising out of or in connection with such
instruments and hereby releases Sellers from any such claim (except for any
claim that Sellers agree to cure as set forth in this Agreement).

Purchaser 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”).  The Hotel and other
improvements on the Land 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.  Purchaser
has had the opportunity, as set forth in Section 2.4, to review the results of
such investigations and inspections of the Property as Purchaser deemed
necessary with respect to all such matters.  Purchaser agrees to accept and
shall 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 with respect to those representations set forth in Article III
hereof, Purchaser 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 Sellers (before or after Closing) arising out of
any failure of the Property to comply with any such building codes. 

Except with respect to those representations set forth in Article III, it is
specifically understood and agreed by Seller and Purchaser that Seller 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 or Toxic Substances
in, on, above, under or about any of the Property (“Environmental
Conditions”).  From and after Closing, Purchaser agrees for itself and for its
heirs, successors and assigns, to waive all of its rights under this Agreement,
if any, and any Environmental Laws to require Seller to remediate or “clean up”
the Property and releases Seller from any liability of any kind or nature
arising with respect to any Environmental Conditions at the Property.  As used
in this Agreement, (A) the term “Environmental Laws” means all federal, State
and local laws, codes, ordinances, rules, orders and regulations now or
hereafter in effect relating to pollution or the protection of the environment,
including without limitation, all laws, codes, ordinances, rules, orders and
regulations governing the generation, use, collection, treatment, storage,
transportation, recovery, removal, discharge, spill or disposal of any or all
Hazardous or Toxic Substances, and (B) the term “Hazardous Substances” or “Toxic
Substances” means materials and substances defined as “hazardous substances”,
“hazardous wastes”, “toxic substances” or “toxic wastes” in (I) the
Comprehensive Environmental Response,

13

Compensation and Liability Act of 1980, 42 U.S.C. Sections 9601-9675, as amended
by the Superfund Amendments and Reauthorization Act of 1988, and any further
amendments thereto and rules, orders and regulations thereunder; (II) the
Resource Conservation and Recovery Act of 1976, 42 U.S.C. Sections 6901-6992, as
amended by the Hazardous and Solid Waste Amendments of 1984, and any further
amendments thereto and rules, orders and regulations thereunder; or (III) any
other Environmental Laws.  Purchaser acknowledges and agrees that:  (a)
Purchaser is an experienced and sophisticated owner of real property; (b)
Purchaser has expressly negotiated the limitations of liability contained in
this Section; and (c) the limitations contained in this Section are
reasonable.  Purchaser acknowledges and agrees that Seller 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.

It is understood and agreed by Sellers and Purchaser that in the event of any
conflict between the terms and provisions of this Section 4.6 and any other term
or provision to this Agreement, the relevant term or provision of this Section
4.6 shall control and govern.  The provisions of this Article IV shall survive
Closing.

ARTICLE V

CONDITIONS PRECEDENT

5.1         As to Purchaser’s Obligations.  Purchaser’s obligations hereunder
are subject to the timely satisfaction of the following conditions precedent on
or before the Closing Date or such earlier date as is set forth below. 

(a)         Seller’s Deliveries.  Seller shall have delivered to or for the
benefit of Purchaser, on or before the Closing Date, all of the documents
required of Seller pursuant to Sections 6.2 and 6.4 hereof.

(b)         Representations, Warranties and Covenants; Obligations of Seller;
Certificate.  All of Seller’s representations and warranties made in this
Agreement shall be true and correct in all material respects as of the date
hereof and as of the Closing Date as if then made; and Seller shall have
performed in all material respects all of its covenants and other obligations
under this Agreement. 

(c)         Title Policy.  The Title Company has committed to issue a TLTA T-1
Owner’s Policy of Title Insurance to Purchaser, insuring the Real Property in
the amount of the Purchase Price

(d)         Management Agreement.  The Management Agreement shall have been
terminated on or before the Closing at no cost, liability or expense to
Purchaser.

Each of the conditions contained in this Section are intended for the benefit of
Purchaser and may be waived in whole or in part, by Purchaser.  If the
conditions precedent set forth above are neither satisfied nor waived by
Purchaser by the Closing Date, Purchaser shall have the right to terminate this
Agreement, obtain a refund of the Earnest Money and Seller and Purchaser shall
be released from all further liability or obligation hereunder except those
which expressly survive the termination of this Agreement; provided however that
if Seller is in default hereof at the time of such termination, Section 8.2
shall additionally apply.

5.2         As to Seller’s Obligations.  Seller’s obligations hereunder are
subject to the satisfaction of the following conditions precedent:

14

(a)         Purchaser’s Deliveries.  Purchaser shall have delivered to or for
the benefit of Seller, on or before the Closing Date, all of the documents and
payments required of the Purchaser pursuant to Sections 6.3 and 6.4 hereof.

(b)         Representations, Warranties and Covenants; Obligations of Purchaser;
Certificate.  All of Purchaser’s representations and warranties made in this
Agreement shall be true and correct in all material respects as of the date
hereof and as of the Closing Date as if then made; and Purchaser shall have
performed in all material respects all of its covenants and other obligations
under this Agreement. 

(c)         License Agreement.  The License Agreement between Seller and the
Licensor shall have been either assigned to Purchaser or terminated and
Purchaser shall bear the cost of, and hereby agrees to pay, any and all fees and
expenses related thereto, if any.  Seller, the Manager, if applicable, any
guarantor, and each of their respective Affiliates, shall have been released
from all future duties, liabilities and obligations under the License Agreement
and any guarantee(s) thereof, in such form and to such an extent that Licensor
customarily provides, if any.

(d)         Loan Assumption.  Purchaser shall have obtained written approval
from Lender for the assumption of the Existing Financing by Purchaser.  Seller
shall have approved, in its reasonable discretion, the form of the Loan
Assumption Documents, which shall include a release of Seller and all applicable
guarantors, if any, from any and all liability under the Existing Financing. 

Each of the conditions contained in this Section are intended for the benefit of
Seller and may be waived in whole or in part, by Seller.  If the conditions
precedent set forth above are neither satisfied nor waived by Seller by the
Closing Date, Seller shall have the right to terminate this Agreement, and
Seller and Purchaser shall be released from all further liability or obligation
hereunder except those which expressly survive the termination of this
Agreement; provided however that if Purchaser is in default hereof at the time
of such termination, Section 8.1 shall additionally apply.

ARTICLE VI

CLOSING

6.1         Closing.  The Closing shall occur on the Closing Date.  As more
particularly described below, at the Closing the parties hereto will (a) execute
or cause to be executed (and acknowledged where appropriate) all of the
documents required to be delivered in connection with the transactions
contemplated hereby (the “Closing Documents”), (b) deliver or cause to be
delivered the same to the Escrow Agent, and (c) take or cause to be taken all
other action required to be taken in respect of the transactions contemplated
hereby.  The Closing will occur through escrow at the offices of the Title
Company, or at any such other place as Seller and Purchaser may mutually
agree.  At the Closing, Purchaser shall deliver the balance of the Purchase
Price to Escrow Agent as provided herein.  As provided herein, the parties
hereto will agree upon adjustments and prorations to certain items which cannot
be exactly determined at the Closing and will make the appropriate adjustments
with respect thereto.  Possession of the Property shall be delivered to
Purchaser at the Closing, subject to Permitted Title Exceptions and guests in
possession.

6.2         Seller’s Deliveries.  At the Closing, Seller shall deliver (or cause
to be delivered) to the Escrow Agent all of the following instruments, each of
which shall have been duly executed and, where applicable, acknowledged and/or
sworn, on behalf of Seller, and shall be dated to be effective as of the Closing
Date:

(a)         The Deed.

15

(b)         The Bill of Sale and General Assignment.

(c)         The Assignment and Assumption Agreement.

(d)         Certificate(s)/Registration of Title for any vehicle owned by Seller
and used in connection with the Property (if any).

(e)         The FIRPTA Certificate.

(f)         The Loan Assumption Documents required to be executed by Seller.

(g)         An owner’s title affidavit (to the extent required by the Title
Company), each duly executed and acknowledged by Seller.

(h)         Such evidence, documents, affidavits and indemnifications as may be
reasonably required by the Title Company and relating to:  (i) the authority of
the persons executing the instruments delivered at Closing on behalf of Seller
have the authority to bind Seller to perform its obligations set forth therein,
(ii) mechanics’ or materialmens’ liens, (iii) parties in possession, or (iv) any
other matters reasonably required to enable the Title Company to issue the Title
Policy and endorsements thereto, in form and content satisfactory to Purchaser
and the Title Company. Any other document or instrument specifically required by
this Agreement.

Seller shall also cause the Manager to deliver to Purchaser or make available to
Purchaser at the Property:

(i)          all original Warranties, Guarantees, and Hotel Agreements to be
assigned to and assumed by Purchaser and in Seller’s or the Manager’s
possession,

(j)          information as to all Advance Bookings, in reasonable detail so as
to enable Purchaser to honor Seller’s commitments in that regard,

(k)         information as to outstanding Accounts Receivable as of midnight on
the date prior to the Closing, including the name of each account and the amount
due,

(l)          all keys, passwords, access cards, combinations, codes and other
similar entry or control devices with respect to the Property.

6.3         Purchaser’s Deliveries.  At the Closing, Purchaser shall deliver to
Escrow Agent the following, duly executed and, where applicable, acknowledged
and/or sworn on behalf of Purchaser, and dated as of the Closing Date:

(a)         The Assignment and Assumption Agreement.

(b)         The Bill of Sale and General Assignment.

(c)         The Loan Assumption Documents required to be executed by Purchaser.

(d)         Any other document or instrument specifically required by this
Agreement.

(e)         At the Closing, Purchaser shall deliver to Escrow Agent the Purchase
Price (less the Earnest Money and any interest thereon) as described in
Section 2.2 hereof.

16

6.4         Mutual Deliveries.  At the Closing, Purchaser and Seller shall
mutually execute and deliver each to the other:

(a)         A closing statement reflecting the Purchase Price and the
adjustments and prorations required hereunder and the allocation of income and
expenses required hereby.

(b)         Subject to the provisions of Section 6.4 hereof, such other
documents, instruments and undertakings as may be required by the authorities of
the State where the Property is located.

(c)         Such other and further documents, papers and instruments as may be
reasonably required by the parties hereto or their respective counsel or the
Title Company to consummate the transactions contemplated by this Agreement and
which are not inconsistent with the Agreement or the other Closing Documents.

6.5         Closing Costs.  At Closing, Seller shall pay any costs related to
(a) the issuance of the Title Commitment and the basic premium for the Title
Policy (excluding the cost of any endorsements thereto and amending the survey
exception), (b) Seller’s legal fees, and (c) all other items which are normally
paid by sellers in real estate transactions in Lubbock County, Texas. Purchaser
shall pay any costs related to (a) Purchaser’s due diligence inspection, (b)
Purchaser’s legal fees, (c) the Assumption Fee and all other fees, costs and
expenses of Purchaser’s lender, if any, including the cost of any mortgagee’s
policy of title insurance, (d) the cost of any endorsements, or any other
“extended” title coverage, requested by Purchaser, to the Title Policy, (f) the
cost of any updated survey and (g) all other items which are normally paid by
purchasers in real estate transactions in in Lubbock County Texas.  Purchaser
shall also pay all costs associated with the assignment of the License Agreement
(or issuance of a new License Agreement), including, without limitation, all
application fees, inspection fees, transfer fees, PIP Fees and all expenses of
Managers or Franchisors, including, without limitation, legal fees and expenses,
incurred in connection therewith.  Unless the payment of any other cost is
specifically provided for in this Agreement, all other costs shall be
apportioned between the parties by the Title Company in the manner customary in
the location of the Hotel, for properties of a similar nature.  Except as
otherwise provided in Section 8.3, each party shall be responsible for the
payment of its own attorney’s fees incurred in connection with transaction which
is the subject of this Agreement.    

6.6         Revenue and Expense Allocations.  All revenues and expenses with
respect to the Property, and applicable to the period of time before and after
Closing, determined in accordance with sound accounting principles consistently
applied, shall be allocated between Seller and Purchaser as provided herein. 
Seller shall be entitled to all revenue and shall be responsible for all
expenses for the period of time up to but not including the Closing Date, and
Purchaser shall be entitled to all revenue and shall be responsible for all
expenses for the period of time from, after and including the Closing Date;
provide, however, that the housekeeping costs and the Final Rooms Revenue for
the Closing Date shall be shared equally between Seller and Purchaser. Such
adjustments shall be shown on the closing statement (with such supporting
documentation as the parties hereto may reasonably require being attached as
exhibits to the closing statements) and shall increase or decrease (as the case
may be) the cash amount payable by Purchaser pursuant to Section 2.2
hereof.  All prorations 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.  Without limiting the generality of the foregoing, the following
items of revenue and expense shall be allocated and prorated at Closing:

(a)         Current rents.

(b)         Real estate and personal property, hotel and any other applicable
taxes (with maximum allowable discounts for early or prompt payment).    

17

(c)         Revenue and expenses under the Operating Agreements, Leased Property
Agreements and Off-Site Facility Agreements to be assigned to and assumed by
Purchaser.

(d)         Utility charges (including, but not limited to, charges for phone
service, cable television, gas, water, sewer and electricity).

(e)         Municipal or other governmental improvement liens and special
assessments, which shall be paid by Seller at Closing where the work has been
assessed, and which shall be assumed by Purchaser at Closing where the work has
not been assessed; provided, however, that if such liens or assessments are
payable in installments, Seller shall be responsible for the payment of such
installments relating to periods prior to the Closing Date and Purchaser shall
be responsible for the payments of such installments relating to periods on and
subsequent to the Closing Date.

(f)         License and permit fees, where transferable.

(g)         All other revenues and expenses of the Property, including, but not
limited to, such things as restaurant, bar and meeting room income and expenses
and the like.

(h)         The Final Rooms Revenue and housekeeping costs for the date of
Closing (to be apportioned equally between Seller and Purchaser).

(i)          Advance Deposits.

(j)          Cash on hand (house accounts).

(k)         Such other items as are usually and customarily prorated between
purchasers and sellers of hotel properties in the area where the Property is
located.

Seller shall receive a credit for any prepaid expenses accruing to periods on or
after the Closing Date.  Purchaser shall receive a credit against the Purchase
Price for the total of (a) prepaid rents, (b) prepaid room receipts and
deposits, function receipts and deposits and other reservation receipts and
deposits, and (c) unforfeited security deposits together with any interest
payable to a tenant thereon held by Seller under Occupancy Agreements.  At
Closing, Seller shall sell to Purchaser in connection with the Hotel, and
Purchaser shall purchase as part of the purchase price from Seller at face
value: (a)  all petty cash funds in connection with the hotel guest operations
at the Property; and (b) the so-called "guest ledger" as mutually approved by
Seller and Purchaser of guest accounts receivable payable to the Hotel as of the
check out time for the Hotel on the Closing Date (based on guest and customers
then using the Hotel) both (i) in occupancy from the preceding night through
check out time the morning of the Closing Date, and (ii) previously in occupancy
prior to check out time on the Closing Date.  For purposes of this Agreement,
transfer or sale at face value shall have the following meanings: (a) for petty
cash, an amount equal to the total of all petty cash funds on hand and
transferred to Purchaser; and (b) for the guest ledger, the total of all credit
card accounts receivable as shown on the records of the Hotel, less actual
collections (i.e., fees retained by credit card companies), less accounting
charges for rooms furnished on a gratuity or complimentary basis to any hotel
staff or as an accommodation to other parties and less Purchaser's
one-half (1/2) share of Final Rooms Revenue.  The purchase price of said petty
cash fund and guest ledger shall be paid to Seller at Closing by a credit to
Seller in the computation of adjustments and prorations on the Closing Date. 

Purchaser shall receive a credit for all retail sales (as distinguished from any
tax on the sale of any personal property effected pursuant to this Agreement),
occupancy and liquor taxes and like impositions up to but not including the date
of Closing.  Any such taxes applicable to the Final Rooms Revenue shall be
apportioned equally between Seller and Purchaser.  Seller shall cooperate
reasonably with Purchaser to

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permit Purchaser to obtain, if desired by Purchaser, sale and occupancy tax
clearance certificates from the State in which the Real Property is located.

If accurate allocations cannot be made at Closing because current bills are not
obtainable (as, for example, in the case of utility bills and/or real estate or
personal property taxes), the parties shall allocate 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.  The
obligation to make the adjustment shall survive the Closing of the transaction
contemplated by this Agreement.  Any revenue received or expense incurred by
Seller or by Purchaser with respect to the Property after the date of Closing
shall be promptly allocated in the manner described herein and the parties shall
promptly pay or reimburse any amount due.  With respect to any closing
statements amounts or issues relating to prorations that are not agreed upon at
Closing, Seller and Purchaser shall thereafter work in good faith to resolve
such amounts or issues; provided that if such amounts or issues are not fully
agreed upon and paid within thirty (30) days after the Closing, then, in such
event, such amounts or issues shall be submitted to an independent certified
public accountant with a hospitality practice reasonably acceptable to Seller
and Purchaser for final resolution, and Seller and Purchaser agree to be bound
by the determination of such accountant.  The costs and expenses incurred in
connection with the services of such accountant shall be borne equally by Seller
and Purchaser.  The provisions of this Section 6.6 shall survive the Closing.

6.7         Safe Deposit Boxes.  On the Closing Date, Seller shall cause the
Manager to make available to Purchaser at the Hotel all receipts and agreements
in the Manager’s possession relating to all safe deposit boxes in use at the
Hotel, other than safes or lockboxes, if any, located inside individual guest
rooms in Hotel.  During the Study Period, Seller and Purchaser shall mutually
agree upon a procedure to provide notice to each Hotel guest utilizing a safe
deposit box on the Closing Date about the sale of the Property and to cause each
such Hotel guest to adhere to the procedure set forth in the notice so that a
proper inventory can be prepared and an orderly transition made.  From and after
the Closing, Seller and the Manager shall be relieved of any and all
responsibility in connection with each said box, and Purchaser shall indemnify,
defend and hold Seller and the Manager and harmless from and against any claim,
liability, cost or expense (including reasonable attorneys’ fees) with respect
to such safety deposit box arising after the Closing.  Seller hereby agrees to
hold Purchaser harmless from any other liability or claims with respect to such
safe deposit boxes arising prior to the Closing Date.  The provisions of this
Section 6.7 shall survive the Closing.

6.8         Inventory of Baggage.  The representatives of Seller and/or the
Manager, and of Purchaser shall prepare an inventory of baggage at the Hotel as
of 12:00 noon, Central, on the Closing Date (which inventory of baggage shall be
binding on all parties thereto) of (a) all luggage, valises and trunks checked
or left in the care of the Hotel by guests then or formerly in the Hotel,
(b) parcels, laundry, valet packages and other property of guests checked or
left in the care of the Hotel by guests then or formerly in the Hotel
(excluding, however, property in Hotel safe deposit boxes), (c) all luggage or
other property of guests retained by Seller as security for any unpaid accounts
receivable, and (d) all items contained in the Hotel lost and found.  Purchaser
shall be responsible from and after the Closing Date for all baggage and other
items listed in such inventory of baggage, and Purchaser shall indemnify, defend
and hold Seller and the Manager harmless from and against any claim liability,
cost or expense (including reasonable attorneys’ fees) incurred by Seller or the
Manager or any Affiliate thereof with respect thereto arising after the Closing
Date.  Seller hereby agrees to hold Purchaser harmless from any other liability
or claims with respect to such inventory of baggage arising prior to the Closing
Date.  The provisions of this Section 6.8 shall survive the Closing.

6.9         Accounts Receivable. It is expressly agreed by and between Purchaser
and Seller that Seller is not hereby agreeing to sell to Purchaser, and
Purchaser is not hereby agreeing to purchase from Seller, any of Seller’s
accounts receivable. All of Seller’s accounts receivable shall be and remain the

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property of Seller. At the Closing, Seller shall prepare a list of its
outstanding accounts receivable as of midnight on the date prior to the Closing,
specifying the name of each account and the amount due to Seller. Purchaser
shall hold any funds received by Purchaser explicitly designated as payment of
such accounts receivable, in trust, if Purchaser actually collects any such
amounts, and shall pay the monies collected in respect thereof to Seller at the
end of each calendar month, accompanied by a statement showing the amount
collected on each such account. Other than the foregoing, Purchaser shall have
no obligation with respect to any such account, and Purchaser shall not be
required to take any legal proceeding or action to effect collection on behalf
of Seller. It is generally the intention of Purchaser and Seller that although
all of Seller’s accounts receivable shall be and remain the property of Seller,
if any such accounts are paid to Purchaser, then Purchaser shall collect same
and remit to Seller in the manner above provided. Nothing herein contained shall
be construed as requiring Purchaser to remit to Seller any funds collected by
Purchaser on account of Purchaser’s accounts receivable generated from Hotel
operations after the Closing, even if the person or entity paying same is also
indebted to Seller. 

6.10       Accounts Payable.  Purchaser shall receive a credit for any and all
accounts payable owed by Seller in connection with any portions of the Property
which Purchaser is assuming, as of the Closing Date.

6.11       Property Improvement Plan.  Promptly following the Effective Date,
Seller shall obtain (at its sole cost) and deliver to Purchaser a property
improvement plan from (the “Purchaser’s PIP”) from Licensor with respect to the
Hotel for the remainder of calendar 2019 (and, if applicable, subsequent
years).  Purchaser shall be responsible for all actions and expenses required by
Purchaser’s PIP. 

ARTICLE VII

GENERAL PROVISIONS

7.1         Fire or Other Casualty.  Seller agrees to give Purchaser prompt
notice of any fire or other casualty to the Property costing more than Ten
Thousand Dollars ($10,000.00) to repair and occurring between the Effective Date
and the Closing Date of which Seller has knowledge.  If, prior to Closing, the
Property is damaged by fire or other casualty which is fully insured (without
regard to deductibles) and would cost less than Two Hundred Fifty Thousand
Dollars ($250,000.00) and require less than 120 days to repair, then neither
party shall have the right to terminate this Agreement by reason thereof and the
Closing shall take place without abatement of the Purchase Price, but Seller
shall assign to Purchaser at the Closing all of Seller’s interest in any
insurance proceeds (except use and occupancy insurance, rent loss and business
interruption insurance, and any similar insurance, attributable to the period
preceding the Closing Date) that may be payable to Seller on account of any such
fire or other casualty, to the extent such proceeds have not been previously
expended or are otherwise required to reimburse Seller for actual expenditures
of restoration made prior to the Closing Date, plus Seller shall credit the
amount of any deductibles under any policies related to such proceeds to the
Purchase Price together with any amount not covered by insurance.  If any such
damage due to fire or other casualty is insured and would cost in excess of
Two Hundred Fifty Thousand Dollars ($250,000.00) or require more than 120 days
to repair, then Purchaser may terminate this Agreement by written notice given
to Seller within ten (10) days after Seller has given Purchaser the notice of
damage or casualty referred to in this Section 7.1, or on the Closing Date,
whichever is earlier, in which case the parties hereto shall be released of all
further obligations hereunder with respect to the Property except those which
expressly survive a termination of this Agreement.  Should Purchaser elect to
proceed to Closing notwithstanding the amount of the insured loss or the time
required for repairs, the Closing shall take place without abatement of the
Purchase Price and at Closing Seller shall assign to Purchaser the insurance
proceeds and grant to Purchaser a credit against the Purchase Price equal to the
amount of the applicable deductible plus any amount not covered by
insurance.  If, prior to Closing,

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any Property is damaged by fire or casualty which is uninsured and would cost
Two Hundred Fifty Thousand Dollars ($250,000.00) or more to repair, then
Purchaser may terminate this Agreement by written notice given to Seller within
ten (10) days after Seller has given Purchaser the notice of damage or casualty
or on the Closing Date, whichever is earlier, in which case the parties hereto
shall be released of all further obligations hereunder, except those which
expressly survive a termination of this Agreement.   

7.2         Condemnation.  After the Effective Date, Seller agrees to give
Purchaser prompt written notice of any knowledge of or notice of any taking by
condemnation of any part of or rights appurtenant to the Real Property.  If
taking will materially interfere with the operation or use of any Hotel which
constitutes a part of such Real Property, Purchaser may terminate this Agreement
by written notice to Seller within ten (10) days after Seller has given
Purchaser the notice of taking referred to in this Section 7.2, or on the
Closing Date, whichever is earlier.  If Purchaser exercises its option to
terminate its obligations to purchase the Property pursuant to this Section 7.2,
the parties hereto shall be released from all further obligations hereunder with
respect to the Property, except those which expressly survive a termination of
the Agreement.  If Purchaser does not so elect to terminate this Agreement, then
the Closing shall take place as provided herein, and Seller shall assign to
Purchaser at the Closing all of Seller’s interest in any condemnation award
which may be payable to Seller on account of any such condemnation and, at
Closing, Seller shall credit to the amount of the Purchase Price payable by
Purchaser the amount, if any, of condemnation proceeds received by Seller
between the Effective Date and Closing less (a) any amounts reasonably expended
by Seller in collecting such sums and (b) any amounts reasonably used by Seller
to repair the Property as a result of such condemnation.  If, prior to Closing,
there shall occur a taking by condemnation of any part of or rights appurtenant
to the Property that does not materially interfere with the operation or use of
the Hotel which constitutes a part of the Property, Purchaser shall not have the
right to terminate this Agreement by reason thereof and the Closing shall take
place without abatement of the Purchase Price, but Seller shall assign to
Purchaser at Closing all of Seller’s interest in any condemnation award which
may be payable to Seller on account of any such condemnation and, at Closing,
Seller shall credit to the amount of the Purchase Price payable by Purchaser the
amount, if any, of condemnation proceeds received by Seller between the
Effective Date and Closing less (a) any amounts reasonably expended by Seller in
collecting such sums and (b) any amounts reasonably used by Seller to repair the
Property as a result of such condemnation.  Provided Purchaser has not exercised
its right to terminate this Agreement pursuant to Section 7.2, Seller shall
notify Purchaser in advance regarding any proceeding or negotiation with respect
to the condemnation and Purchaser shall have a reasonable right, at its own cost
and expense, to appear and participate in any such proceeding or
negotiation.  For purposes of Sections 7.1 and 7.2 if this Agreement, estimates
of costs and time required for restoration or repair shall be made by an
architect or engineer, as appropriate, designated by Seller and reasonably
acceptable to Purchaser.

7.3          Broker.  Seller and Purchaser each represent and warrant to the
other that they have not employed any real estate sales representatives or
brokers regarding the transaction contemplated by this Agreement other than, in
Seller’s case, Hotel Advisory, LLC d/b/a HVS Brokerage & Advisory in respect of
which Seller shall be solely responsible for all related fees  due under
Seller’s separate agreement with such broker.  Seller shall indemnify, defend
and hold Purchaser harmless from any commission or fee claimed to be owing due
to the acts of Seller.  Purchaser shall indemnify, defend and hold Seller
harmless from any commission or fee claimed to be owing due to the acts of
Purchaser.  This section relates solely to the transaction contemplated by this
Agreement between Seller and Purchaser and shall not create any third party
right or obligation in favor of either or any broker.  The provisions of this
Section 7.3 shall survive the Closing and any termination of this Agreement.

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ARTICLE VIII

DEFAULT; TERMINATION RIGHTS

8.1         Purchaser’s Default and Seller’s Remedies.  

(a)         Purchaser’s Default. It shall be a default by Purchaser under this
Agreement if Purchaser shall fail to perform or comply with any of its
covenants, acts and agreements contained in this Agreement in any material
respect when required to be performed hereunder and such failure shall continue
for three (3) business days after Seller gives Purchaser written notice of such
failure (but in no event shall such cure period extend beyond the Closing Date),
except that if such failure relates to any covenant or agreement to be performed
at the Closing, there shall be no notice required or grace or cure period
allowed.

(b)         Seller’s Remedies for Purchaser’s Default.  If a Purchaser’s Default
occurs and provided no Seller’s Default has occurred that has not been cured,
then Seller shall have the right to terminate this Agreement immediately by
giving written notice to Purchaser, in which event Seller shall be entitled to
the immediate receipt of the Earnest Money together with all interest accrued
thereon as liquidated damages.  The remedy set forth in the preceding provisions
of this Section 8.1(b) shall be Seller’s sole and exclusive remedy, at law or in
equity, for a Purchaser’s Default.  In the event Seller terminates this
Agreement, then the Agreement shall be of no further force and effect and
neither Purchaser nor Seller shall have any further rights, obligations or
liabilities hereunder, except for those obligations or liabilities that
expressly survive termination of this Agreement.  Seller and Purchaser
acknowledge that it would be extremely difficult if not impossible to ascertain
Seller's actual damages in the event of Purchaser’s Default, and the Earnest
Money and such accrued interest is a reasonable forecast of just compensation to
Seller resulting from Purchaser’s Default.

8.2         Seller’s Default and Purchaser’s Remedies.

(a)         Seller’s Defaults.  It shall be a default by Seller under this
Agreement if Seller shall fail to perform or comply with any of its covenants,
acts and agreements under this Agreement in any material respect when required
to be performed hereunder and such failure shall continue for three (3) business
days after Purchaser gives Seller notice of such failure (but in no event shall
such cure period extend beyond the Closing Date), except that if such failure
relates to any covenant or agreement to be performed at the Closing, there shall
be no notice required or grace or cure period allowed.

(b)         Purchaser’s Remedies for Seller’s Default.  If a Seller’s Default
occurs and provided no Purchaser’s Default has occurred that has not been cured,
then Purchaser shall have the right as its sole and exclusive remedy to either
(i) terminate this Agreement immediately by giving written notice to Seller, in
which event (a) Purchaser shall be entitled to the immediate return of the
Earnest Money, together with all interest accrued thereon and actual and
verifiable costs paid to third-parties in connection with the evaluation of the
Property and the negotiation of this transaction in an amount not to exceed
$50,000.00 in the aggregate; and (b) this Agreement shall be of no further force
and effect except for those provisions that expressly survive termination of the
Agreement, or (ii) seek specific performance of Seller’s obligations under this
Agreement.  If Purchaser elects to seek such specific performance, Purchaser
shall give Seller written notice of such election within thirty (30) days after
the occurrence of such Seller’s Default, and thereafter commence an action
seeking such specific performance within ninety (90) days after the occurrence
of such Seller’s Default. In the event Purchaser terminates this Agreement in
accordance with the terms of this Agreement, then this Agreement shall be of no
further force and effect and the parties shall have no further rights,
obligations, or liabilities hereunder, except for those obligations that
expressly survive termination of the Agreement. 

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8.3         Instructions to Title Company.  If either Seller or Purchaser
becomes entitled to the Earnest Money upon termination of this Agreement in
accordance with its terms, Purchaser and Seller agree to deliver a letter of
instruction to the Title Company directing disbursement of the Earnest Money to
the party entitled thereto.

8.4         Costs and Attorneys’ Fees.  In the event of any litigation or
dispute between the parties arising out of or in any way connected with this
Agreement, resulting in any litigation, then the prevailing party in such shall
be entitled to recover its costs of prosecuting and/or defending same,
including, without limitation, reasonable attorneys’ fees at trial and all
appellate levels.  The provisions of this Section 8.4 shall survive the
termination of this Agreement.

ARTICLE IX

MISCELLANEOUS PROVISIONS

9.1         Completeness; Modification.  This Agreement constitutes the entire
agreement between the parties hereto with respect to the transactions
contemplated hereby and supersedes all prior discussions, understandings,
agreements and negotiations between the parties hereto.  This Agreement may be
modified only by a written instrument duly executed by the parties hereto.

9.2         Successors and Assigns.  This Agreement shall bind and inure to the
benefit of the parties hereto and their permitted respective successors and
assigns.

9.3         Days.  If any action is required to be performed, or if any notice,
consent or other communication is given, on a day that is a Saturday or Sunday
or a legal holiday in the jurisdiction in which the action is required to be
performed or in which is located the intended recipient of such notice, consent
or other communication, such performance shall be deemed to be required, and
such notice, consent or other communication shall be deemed to be given, on the
first business day following such Saturday, Sunday or legal holiday.  Unless
otherwise specified herein, all references herein to a “day” or “days” shall
refer to calendar days and not business days.

9.4         Governing Law.  This Agreement and all documents referred to herein
shall be governed by and construed and interpreted in accordance with the laws
of the state in which the Property is located without regard to its principle of
conflicts of law.

9.5         Counterparts.  To facilitate execution, this Agreement may be
executed in as many counterparts as may be required.  It shall not be necessary
that the signature on behalf of both parties hereto appear on each counterpart
hereof.  All counterparts hereto shall collectively constitute a single
agreement.  Telecopied signatures shall have the same valid and binding effect
as original signatures.

9.6         Severability.  If any term, covenant or condition of this Agreement,
or the application thereof to any person or circumstance, shall to any extent be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term, covenant or condition to other persons or circumstances, shall not be
affected thereby, and each term, covenant or condition of this Agreement shall
be valid and enforceable to the fullest extent permitted by law.

9.7         Costs.  Regardless of whether Closing occurs hereunder, and except
as otherwise expressly provided herein, each party hereto shall be responsible
for its own costs in connection with this Agreement and the transactions
contemplated hereby, including, without limitation, fees of attorneys, engineers
and accountants.

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9.8         Limitations on Liability.  In no event shall any officer, director,
shareholder, partner, member, employee, agent or affiliate of Seller or
Purchaser have any personal liability hereunder, nor shall any of them be named
personally in any suit, action or proceeding concerning any matter hereunder,
nor shall any of their assets be attached, liened or levied upon or in any other
way held liable for any of the obligations of Seller or Purchaser,
respectively.  Notwithstanding anything to the contrary contained in this
Agreement, in no event shall either party be entitled to recover from the other
party in connection with any claim arising out of or relating to this Agreement
or any representation made herein, any lost profits or any direct, compensatory,
punitive, indirect, consequential or other similar damages.

9.9         Notices.  All notices, demands, requests, consents, waivers,
approvals and other communications shall be in writing and shall be deemed given
(i) upon the hand delivery thereof during business hours provided a receipt is
obtained, or (ii) upon the earlier of delivery or tender for delivery if sent by
certified mail, return receipt requested, postage charges prepaid, or (iii) on
the next business day following delivery to a recognized overnight delivery
service such as Federal Express or Express Mail, freight charges prepaid, or
(iv) on the day sent if sent by electronic mail (“E-mail”) on a business day
before 5:00 p.m. (Central Time), and provided an original is received by the
addressee by a nationally recognized overnight courier within one (1) business
day of the E-Mail, or (v) on the day sent if sent by e-mail on a business day
before 5:00 p.m. (Central Time) and provided an original is received by the
addressee by a nationally recognized overnight courier within one (1) business
day of the e-mail, in each case addressed or delivered to the respective parties
at their respective addresses set forth below (or at such other addresses
designated by any party at any time by notice to the other parties in the manner
set forth herein):

If to Seller:

Treemont Capital Partners IV, LP

 

1415 South Voss #110-74

 

Houston, TX 77057

 

Attention: Philip A. McRae

 

Telephone: (832) 790-7772

 

E-Mail: pmcrae@treemontpartners.com

 

 

With a copy to:

Sneed, Vine & Perry, P.C.

 

2705 Bee Cave Road, Suite 160

 

Austin, TX 78745

 

Attention: Adam S. Wilk/ Kasi Moeskau

 

Telephone: (512) 494-3126

 

E-Mail: awilk@sneedvine.com/ kmoeskau@sneedvine.com

 

 

If to Purchaser:

Lodging Fund REIT III, Inc.

 

c/o David Durell

 

1635 43rd Street South, Suite 205

 

Fargo, ND 58103

 

Fax: (701) 281-7145

 

 

With a copy to:

Legendary Capital, Legal Department

 

John Faris

 

644 Lovett S.E., Suite A

 

Grand Rapids, MI 49506

 

Fax: (616) 264-3841

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Phone: (616) 264-3833

 

 

If to Escrow Agent:

Stewart Title Company

 

720 W. 11th Street, Suite 200

 

Houston, TX 77008

 

Attn: Kay Street

 

Telephone: (713) 401-1850

 

E-Mail: Kay.street@stewart.com

 

or to such other address as the intended recipient may have specified in a
notice to the other party.  Any party hereto may change its address or designate
different or other persons or entities to receive copies by notifying the other
party and Escrow Agent in a manner described in this Section.

9.10       Escrow Agent.  Escrow Agent has agreed to act as such for the
convenience of the parties without fee or other charges for such services as
Escrow Agent.  Escrow Agent shall not be liable: (a) to any of the parties for
any act or omission to act except for its own willful misconduct; (b) for any
legal effect, insufficiency, or undesirability or any instrument deposited with
or delivered by Escrow Agent or exchanged by the parties hereunder, whether or
not Escrow Agent prepared such instrument; (c) for any loss or impairment of
funds that have been deposited in escrow while those funds are in the course of
collection, or while those funds are on deposit in a financial institution, if
such loss or impairment results from the failure, insolvency or suspension of a
financial institution; (d) for the expiration of any time limit or other
consequences of delay, unless a properly executed written instruction, accepted
by Escrow Agent, has instructed Escrow Agent to comply with said time limit;
(e) for the default, error, action or omission of either party to the
escrow.  Escrow Agent, in its capacity as escrow agent, shall be entitled to
rely on any document or paper received by it, believed by such Escrow Agent, in
good faith, to be bona fide and genuine.  In the event of any dispute as to the
disposition of any monies held in escrow, or of any documents held in escrow,
Escrow Agent may, if such Escrow Agent so elects, interplead the matter by
filing an interpleader action in a court of competent jurisdiction in the county
or circuit where the Real Property is located (to the jurisdiction of which both
parties do hereby consent), and pay into the registry of the court such monies
held by Escrow Agent, or deposit any such documents with respect to which there
is a dispute in the registry of such court, whereupon such Escrow Agent shall be
relieved and released from any further liability as Escrow Agent
hereunder.  Escrow Agent shall not be liable for Escrow Agent’s compliance with
any legal process, subpoena, writ, order, judgment and decree of any court,
whether issued with or without jurisdiction, and whether or not subsequently
vacated, modified, set aside or reversed.

9.11       Incorporation by Reference.  All of the exhibits and schedules
attached hereto are by this reference incorporated and made a part hereof.

9.12       Further Assurances.  Seller and Purchaser each covenant and agree to
sign, execute and deliver, or cause to be signed, executed and delivered, and to
do or make, or cause to be done or made, upon the written request of the other
party, any and all agreements, instruments, papers, deeds, acts or things,
supplemental, confirmatory or otherwise, as may be reasonably required by either
party hereto for the purpose of or in connection with consummating the
transactions described herein provided that compliance with the provision of
this Section shall not increase the liability of the complying party.

9.13       No Partnership.  This Agreement does not and shall not be construed
to create a partnership, joint venture or any other relationship between the
parties hereto except the relationship of seller and purchaser specifically
established hereby. 

9.14       Time of Essence.  Time is of the essence with respect to every
provision hereof.

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9.15       Signatory Exculpation.  The signatory(ies) for Seller and Purchaser
is/are executing this Agreement in his/their capacity as representative of such
party and not individually and, therefore, shall have no personal or individual
liability of any kind in connection with this Agreement and the transactions
contemplated by it.

9.16       Rules of Construction.  The following rules shall apply to the
construction and interpretation of this Agreement:

(a)         Singular words shall connote the plural number as well as the
singular and vice versa, and the masculine shall include the feminine and the
neuter.

(b)         All references herein to particular articles, sections, subsections,
clauses or exhibits are references to articles, sections, subsections, clauses
or exhibits of this Agreement.

(c)         The headings contained herein are solely for convenience of
reference and shall not constitute a part of this Agreement nor shall they
affect its meaning, construction or effect.

(d)         Each party hereto and its counsel have reviewed and revised (or
requested revisions of) this Agreement and have participated in the preparation
of this Agreement, and therefore any usual rules of construction requiring that
ambiguities are to be resolved against a particular party shall not be
applicable in the construction and interpretation of this Agreement or any
exhibits hereto.

9.17       No Recording.  Neither this Agreement nor any memorandum hereof, or
any other instrument intended to give notice hereof (or which actually gives
notice hereof) shall be recorded.

9.18       Facsimile Signatures.  The execution of this Agreement and all
notices given hereunder and all amendments hereto, may be effected by facsimile
signatures, all of which shall be treated as originals; provided, however, that
the party receiving a document with a facsimile signature may, by notice to the
other, require the prompt delivery of an original signature to evidence and
confirm the delivery of the facsimile signature. 

9.19       Assignment by Purchaser.  Purchaser may not assign this Agreement to
any person, firm, corporation, or other entity without Seller’s consent, which
consent shall not be unreasonably withheld, conditioned or delayed; provided,
however, Purchaser may assign all of its rights, title, liability, interest and
obligation pursuant to this Agreement to an any entity controlled by, in control
of, or under common control with Purchaser without Seller’s consent, provided
that the assignee assumes all obligations of Purchaser under this Agreement and
further provided that Purchaser gives Seller a copy of such assignment and
assumption agreement at least five (5) days before Closing.  Any such assignment
shall not relieve Purchaser of any liability under this Agreement from and after
such assignment.

9.20       Waiver.  The excuse or waiver of the performance by a party of any
obligation of the other party under this Agreement shall only be effective if
evidenced by a written statement signed by the party so excusing or waiving.  No
delay in exercising any right or remedy shall constitute a waiver thereof, and
no waiver by Seller or Purchaser of the breach of any covenant of this Agreement
shall be construed as a waiver of any preceding or succeeding breach of the same
or any other covenant or condition of this Agreement.

9.21       Section 1031 Exchange.  Either party may consummate the purchase or
sale of the Property as part of a so-called like kind exchange (an “Exchange”)
pursuant to Section 1031 of the Code, provided that (i) the Closing shall not be
delayed or affected by reason of an Exchange nor shall

26

the consummation or accomplishment of any Exchange be a condition precedent or
condition subsequent to a party’s obligations under this Agreement; (ii) any
party desiring an Exchange shall effect its Exchange through an assignment of
this Agreement, or its rights under this Agreement, to a qualified intermediary
and the other party shall not be required to take an assignment of the purchase
agreement for the relinquished or replacement property or be required to acquire
or hold title to any real property for purposes of consummating such Exchange;
and (iii) the party desiring an Exchange shall pay any additional costs that
would not otherwise have been incurred by Purchaser or Seller had such party not
consummated its purchase or sale through an Exchange.  Neither party shall by
this agreement or acquiescence to an Exchange desired by the other party
(1) have its rights under this Agreement affected or diminished in any manner or
(2) be responsible for compliance with or be deemed to have warranted to the
other party that such party’s Exchange in fact complies with Section 1031 of the
Code.  In connection with such cooperation, Seller agrees, upon request of
Purchaser to “direct deed” for actual interests in the property to designees of
Purchaser.    

9.22       Confidentiality.  Purchaser acknowledges that the existence of the
transaction described herein and any documents, materials, instruments, records
or other information delivered by Seller to Purchaser pursuant to this
Agreement, including, without limitation, the Submission Matters
(“Information”), shall be kept confidential by Purchaser, will not be used for
any purpose other than in connection with Purchaser’s due diligence, and
Purchaser shall neither disclose nor allow the disclosure of the Information or
the existence of the transaction to anyone other than Purchaser’s Parties as are
appropriate in order to conduct its due diligence.  Seller acknowledges that it
shall take reasonable steps to ensure that any information obtained from Party
and marked as “Confidential” shall remain confidential and shall not be
disclosed or revealed to anyone other than Seller or its agents.    If this
Agreement is terminated, each party will return to the other all originals and
destroy any copies they have made of the written information or disks provided
by the other party, and the obligations not to disclose any confidential
information received under this Agreement will survive the termination of this
Agreement.

9.23       Non-Compete.  As a material part of this consideration of this
Agreement, for a period of one (1) year following the Closing Date, neither
Seller (or any entity owned or controlled by Treemont Capital Partners) or
Purchaser (or any entity owned or controlled by Legendary Capital)  shall
acquire, develop or manage, directly or indirectly, another hotel property
within a three (3) mile radius of the Hotel.  Nothing in this Section 9.23 shall
be deemed to prohibit any person owning a direct or indirect interest in
Purchaser or Seller (except as expressly named above), and no such parties shall
be deemed in violation of any such assets existing as of the Effective Date. The
terms of this Section 9.23 shall be of no force or effect if this Agreement is
terminated for any reason, but shall otherwise survive the Closing.

9.24       State Specific Provisions.

(a)         DTPA Waiver.  PURCHASER ACKNOWLEDGES THAT:

 

(i)          PURCHASER IS NOT IN A SIGNIFICANTLY DISPARATE BARGAINING POSITION
WITH SELLER; AND

 

(ii)         PURCHASER IS REPRESENTED BY LEGAL COUNSEL IN THE TRANSACTION
RELATING TO THIS AGREEMENT, AND PURCHASER HAS KNOWLEDGE AND EXPERIENCE IN
FINANCIAL AND BUSINESS MATTERS THAT ENABLE IT TO EVALUATE THE MERITS AND RISKS
OF THIS TRANSACTION.

 

27

TO THE FULLEST EXTENT ALLOWED BY LAW, PURCHASER HEREBY EXPRESSLY WAIVES ALL
RIGHTS AND REMEDIES UNDER THE TEXAS DECEPTIVE TRADE PRACTICES CONSUMER
PROTECTION ACT (TEXAS BUSINESS AND COMMERCE CODE SECTION 17.41, ET SEQ.), OTHER
THAN SECTION 17.555 THEREOF.

 

(b)         ABSTRACT OR TITLE POLICY. Purchaser is advised to have an abstract
of title covering the Property examined by an attorney of Purchaser’s selection,
or Purchaser should be furnished with or obtain a title policy.  If a title
policy is furnished, the title commitment should be promptly reviewed by an
attorney of Purchaser’s choice due to the time limitations on Purchaser’s right
to object.

 

(c)         STATUTORY TAX DISTRICTS. If the Property is situated in a utility or
other statutorily created district providing water, sewer, drainage, or flood
control facilities and services, Chapter 49, Texas Water Code, requires Seller
to deliver and Purchaser to sign the statutory notice relating to the tax rate,
bonded indebtedness, or standby fee of the district prior to final execution of
this Agreement.

 

(d)         TIDE WATERS. If the Property abuts the tidally influenced waters of
the state, §33.135, Texas Natural Resources Code, requires a notice regarding
coastal area property to be included in the contract. An addendum containing the
notice promulgated by TREC or required by the parties must be used.

 

(e)         ANNEXATION.  If the Property is located outside the limits of a
municipality, Seller notifies Purchaser under §5.011, Texas Property Code, that
the Property may now or later be included in the extraterritorial jurisdiction
of a municipality and may now or later be subject to annexation by the
municipality.  Each municipality maintains a map that depicts its boundaries and
extraterritorial jurisdiction.  To determine if the Property is located within a
municipality’s extraterritorial jurisdiction or is likely to be located within a
municipality’s extraterritorial jurisdiction, contact all municipalities located
in the general proximity of the Property for further information.

 

(f)         PROPERTY LOCATED IN A CERTIFICATED SERVICE AREA OF A UTILITY SERVICE
PROVIDER.  Notice required by §13.257, Water Code: The Property may be located
in a certificated water or sewer service area, which is authorized by law to
provide water or sewer service to the properties in the certificated area.  If
the Property is located in a certificated area there may be special costs or
charges that you will be required to pay before you can receive water or sewer
service.  There may be a period required to construct lines or other facilities
necessary to provide water or sewer service to your property.  You are advised
to determine if the Property is in a certificated area and contact the utility
service provider to determine the cost that you will be required to pay and the
period, if any, that is required to provide water or sewer service to your
property. Purchaser hereby acknowledges receipt of the foregoing notice at or
before the execution of a binding contract for the purchase of the Property or
at closing of purchase of the Property.

 

(g)         PUBLIC IMPROVEMENT DISTRICTS. If the Property is in a public
improvement district, §5.014, Property Code, requires Seller to notify Purchaser
as follows: As a purchaser of the Property you are obligated to pay an
assessment to a municipality or county for an improvement project undertaken by
a public improvement district under Chapter 372, Local Government Code.  The
assessment may be due annually or in periodic installments. More information
concerning the amount of the assessment and the due dates of that assessment may
be obtained from the municipality or county levying the assessment. The amount
of the assessments is subject to change.  Your failure to pay the assessments
could result in a lien on and the foreclosure of the Property.

 

28

(h)         TEXAS AGRICULTURAL DEVELOPMENT DISTRICT. The Property may be located
in a Texas Agricultural Development District.  For additional information,
contact the Texas Department of Agriculture.

 

(i)          TRANSFER FEES. If the Property is subject to a private transfer fee
obligation, §5.205, Seller hereby notifies Purchaser as follows: The private
transfer fee obligation may be governed by Chapter 5, Subchapter G of the Texas
Property Code.

 

(j)          NOTICE OF WATER LEVEL FLUCTUATIONS.  The Property may adjoin an
impoundment of water, including a reservoir or lake, constructed and maintained
under Chapter 11, Water Code, that has a storage capacity of at least 5,000
acre-feet at the impoundment’s normal operating level.  In such event, Seller
hereby notifies Purchaser: “The water level of the impoundment of water
adjoining the Property fluctuates for various reasons, including as a result of:
(1) an entity lawfully exercising its right to use the water stored in the
impoundment; or (2) drought or flood conditions.”

 

(k)         NOTICE REGARDING POSSIBLE LIABILITY FOR ADDITIONAL TAXES.  IF FOR
THE CURRENT AD VALOREM TAX YEAR THE TAXABLE VALUE OF THE PROPERTY THAT IS THE
SUBJECT OF THIS AGREEMENT IS DETERMINED BY A SPECIAL APPRAISAL METHOD THAT
ALLOWS FOR APPRAISAL OF THE LAND AT LESS THAN ITS MARKET VALUE, THE PERSON TO
WHOM THE LAND IS TRANSFERRED MAY NOT BE ALLOWED TO QUALIFY THE LAND FOR THAT
SPECIAL APPRAISAL IN A SUBSEQUENT TAX YEAR AND THE LAND MAY THEN BE APPRAISED AT
ITS FULL MARKET VALUE. IN ADDITION, THE TRANSFER OF THE LAND OR A SUBSEQUENT
CHANGE IN THE USE OF THE LAND MAY RESULT IN THE IMPOSITION OF AN ADDITIONAL TAX
PLUS INTEREST AS A PENALTY FOR THE TRANSFER OR THE CHANGE IN THE USE OF THE
LAND. THE TAXABLE VALUE OF THE LAND AND THE APPLICABLE METHOD OF APPRAISAL FOR
THE CURRENT TAX YEAR IS PUBLIC INFORMATION AND MAY BE OBTAINED FROM THE TAX
APPRAISAL DISTRICT ESTABLISHED FOR THE COUNTY IN WHICH THE LAND IS LOCATED.

 

[SIGNATURE PAGE TO FOLLOW]

 

 

29

IN WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to be
executed in their names by their respective duly authorized representatives.

 

SELLER:

 

 

 

TREEMONT CAPITAL PARTNERS III, LP, a

 

Texas Limited Partnership

 

 

 

By:

TREEMONT CAPITAL PARTNERS III GP, LLC,

 

 

a Texas Limited Liability Company, Its General Partner

 

 

 

By:

TREEMONT INVESTMENTS, INC.,

 

 

a Texas Corporation, Its Sole Member

 

 

 

 

By:

/s/ Philip A. McRae

 

 

 

Philip A. McRae, President

 

 

 

PURCHASER:

 

 

 

Lodging Fund REIT III OP, LP.

 

a Delaware limited partnership

 

 

 

By:

Lodging Fund REIT III, Inc.

 

 

a Maryland corporation

 

Its:

General Partner

 

 

 

By:

/s/ David Durell

 

 

David Durell, Chief Acquisition Officer

 

 

 

RECEIPT OF THIS AGREEMENT IS ACKNOWLEDGED BY STEWART TITLE COMPANY, EFFECTIVE AS
OF JULY 26th,  2019.

 

STEWART TITLE COMPANY

 

 

 

By:

/s/ Kay Street

 

Name:

Kay Street

 

Title:

Br. Mgr.

 

 

EXHIBIT A

LEGAL DESCRIPTION

Tract “A”, HOME 2 LUBBOCK, an Addition to the City of Lubbock, Lubbock County,
Texas, according to the map, plat and/or dedication deed thereof recorded May 7,
2014 under County Clerk File No. 2014016086, Official Public Records, Lubbock
County, Texas.

 

EXHIBIT “A”

EXHIBIT B

ASSIGNMENT AND ASSUMPTION AGREEMENT

THIS ASSIGNMENT AND ASSUMPTION OF AGREEMENTS (this “Assignment”) is made as of
_____, 2019 (the “Effective Date”), by and between TREEMONT CAPITAL PARTNERS
III, LP, a Texas limited partnership (“Assignor”), and Lodging Fund REIT III OP,
LP, a Delaware limited partnership (“Assignee”).

WHEREAS, Seller and Purchaser are parties to that certain Agreement of Purchase
and Sale dated as of _______ (as amended, modified and supplemented, the
“Agreement”) for the purchase and sale of the land and the improvements as more
particularly described in the Agreement (“Property”) and the related personal
property.  All capitalized terms in this Assignment not otherwise defined herein
have the same meaning ascribed in the Agreement; and

WHEREAS, in connection with the sale of the Property, Assignor desires to
assign, and Assignee desires to assume, all of Assignor’s right, title, interest
and obligations, if any, in all currently effective Hotel Agreements related to
the Property.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and intending to be bound, the parties agree
as follows:

1.          As of the Effective Date, Assignor does hereby assign and convey to
Assignee, its successors and assigns, all of the right, title and interest of
Assignor, and of any Named Party (as defined below), in and to the Hotel
Agreements and related unforfeited security deposits, and Assignee does hereby
assume such right, title and interest in and to the Hotel Agreements and related
unforfeited security deposits (excluding any Liability arising prior to the
Effective Date).  For purposes hereof, “Named Party” shall mean any person or
entity that has executed as agent or under apparent authority, on behalf of
Assignor or its managing agent, any of the Hotel Agreements.

2.          Assignor agrees to indemnify and save harmless Assignee from any
loss or damage, including court costs and reasonable attorneys’ fees, actually
incurred relating to any default or other liabilities of Assignor relating to
the Hotel Agreements occurring prior to the Effective Date.  Assignee agrees to
indemnify and hold harmless Assignor from any loss or damage, including court
costs and reasonable attorneys’ fees, actually incurred relating to any default
or other liabilities of Assignee relating to the Hotel Agreements occurring from
and subsequent to the Effective Date but not of the nature of a continuing
default or breach under the Hotel Agreements which predates the Effective Date.

3.          This Assignment and the provisions herein contained shall be binding
upon and inure to the benefit of Assignee and Assignor and their respective
successors and assigns.

4.          This Assignment may be executed in several counterparts and all
counterparts so executed shall constitute one Assignment, binding on all the
parties hereto and thereto, notwithstanding that all the parties are not
signatories to the same counterpart.

5.          In no event shall any officer, director, shareholder, partner,
member, employee, agent or affiliate of Seller or Purchaser have any personal
liability hereunder, nor shall any of them be named personally in any suit,
action or proceeding concerning any matter hereunder, nor shall any of their
assets be attached, liened or levied upon or in any other way held liable for
any of the obligations of Seller or Purchaser, respectively.  Notwithstanding
anything to the contrary contained in this Assignment, in no event shall either
party be entitled to recover from the other party in connection with any claim
arising out of or

1

relating to this Assignment or any representation made herein, any lost profits
or any compensatory, punitive, indirect or consequential damages.

 

2

IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this
Assignment the day and year first above written.

 

ASSIGNOR:

 

 

 

TREEMONT CAPITAL PARTNERS III, LP, a

 

Texas Limited Partnership

 

 

 

By:

TREEMONT CAPITAL PARTNERS III GP, LLC,

 

 

a Texas Limited Liability Company, Its General Partner

 

 

 

By:

TREEMONT INVESTMENTS, INC.,

 

 

a Texas Corporation, Its Sole Member

 

 

 

 

By:

 

 

 

 

Philip A. McRae, President

 

 

 

 

 

ASSIGNEE:

 

 

 

Lodging Fund REIT III, Inc.

 

a Maryland real estate investment trust

 

 

 

By:

 

 

 

David Durell, Chief Acquisition Officer

 

 

 

3

EXHIBIT C

BILL OF SALE AND GENERAL ASSIGNMENT

THIS BILL OF SALE AND GENERAL ASSIGNMENT (this “Bill of Sale”) is made as of
_____, 2019, by and between TREEMONT CAPITAL PARTNERS III, LP, a Texas limited
partnership  (“Assignor”) and Lodging Fund REIT III OP, LP a Delaware limited
partnership (“Assignee”).

WHEREAS, Assignor and Assignee are parties to that certain Agreement of Purchase
and Sale dated as of ______, (“Agreement”) for the purchase and sale of real
property for the purchase and sale of the land and the improvements as more
particularly described in the Agreement (“Property”) and the related personal
property.  Capitalized terms used, but not defined herein, shall have the
meaning ascribed to such term in the Agreement.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and intending to be legally bound, the parties
agree as follows:

Assignor has GRANTED, CONVEYED, SOLD, TRANSFERRED, SET‑OVER, and DELIVERED, and
by these presents does hereby GRANT, CONVEY, SELL, TRANSFER, SET‑OVER, and
DELIVER unto Assignee, all of Assignor’s right, title and interest (if any), in
and to all items personal property of every kind and nature located on, attached
to or used in the operation of the Property, including, but not limited to,
Assignor’s rights and interest, if any, in and to: (a) all Tangible Personal
Property; (b) all Intangible Personal Property; (c) Warranties and Guaranties;
and (d) Advanced Bookings, (collectively, “Assigned Property”).

The Assigned Property is conveyed by Seller and accepted by Purchaser AS IS,
WHERE IS, AND WITHOUT ANY REPRESENTATIONS OR WARRANTIES OF WHATSOEVER NATURE,
EXPRESS OR IMPLIED, IT BEING THE INTENTION OF ASSIGNOR AND ASSIGNEE EXPRESSLY TO
NEGATE AND EXCLUDE ALL WARRANTIES, INCLUDING WITHOUT LIMITATION, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE, WARRANTIES
CREATED BY ANY AFFIRMATION OF FACT OR PROMISE OR BY ANY DESCRIPTION OF THE
PROPERTY CONVEYED HEREUNDER, AND ALL OTHER REPRESENTATIONS AND WARRANTIES
WHATSOEVER CONTAINED IN OR CREATED BY THE UNIFORM COMMERCIAL CODE OF THE STATE
OR STATES WHERE THE REAL PROPERTY IS LOCATED, EXCEPT AS OTHERWISE EXPRESSLY SET
FORTH IN THE AGREEMENT.

This Bill of Sale and the provisions herein contained shall be binding upon and
inure to the benefit of Purchaser and Seller and their respective successors and
assigns.

This Bill of Sale may be executed in several counterparts and all counterparts
so executed shall constitute one Assignment, binding on all the parties hereto
and thereto, notwithstanding that all the parties are not signatories to the
same counterpart.

[Signature page follows.]

 

1

IN WITNESS WHEREOF, Assignor has executed and delivered this Bill of Sale the
day and year first above written.

 

ASSIGNOR:

 

 

 

TREEMONT CAPITAL PARTNERS III, LP, a

 

Texas Limited Partnership

 

 

 

By:

TREEMONT CAPITAL PARTNERS III GP, LLC,

 

 

a Texas Limited Liability Company, Its General Partner

 

 

 

By:

TREEMONT INVESTMENTS, INC.,

 

 

a Texas Corporation, Its Sole Member

 

 

 

 

By:

 

 

 

 

Philip A. McRae, President

 

 

 

2

EXHIBIT “D”

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

SPECIAL WARRANTY DEED

THE STATE OF TEXAS

§

 

 

§

KNOW ALL PERSONS BY THESE PRESENTS:

COUNTY OF LUBBOCK

§

 

 

THAT, ______________________________  (“Grantor”), for and in consideration of
the sum of Ten and No/100 Dollars ($10.00) cash in hand paid by ________________
(“Grantee”), whose address is ______________________, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by Grantor, has GRANTED, BARGAINED, SOLD, and CONVEYED, and by
these presents does GRANT, BARGAIN, SELL, and CONVEY unto Grantee, that certain
tract of real property situated in Lubbock County, Texas, and described in
Exhibit “A” attached hereto and made a part hereof for all purposes (the
“Property”), together with all and singular the rights, privileges,
hereditaments, and appurtenances pertaining to such real property, including any
and all improvements and fixtures currently attached to and located thereon.

This conveyance is made and accepted subject and subordinate to (i) all matters
of record in the Official Public Records of Lubbock County, to the extent such
matters are valid and subsisting and affect or pertain to the Property as of the
date hereof; and (ii) any matters that are visible or apparent on the ground and
which a correct survey would show (“Permitted Encumbrances”).

 

TO HAVE AND TO HOLD the Property, together with, all and singular, the rights
and appurtenances thereto in anywise belonging, to Grantee and Grantee’s
successors and assigns forever; Grantor does hereby bind Grantor and Grantor’s
heirs, executors, administrators, legal representatives, successors, and assigns
to warrant and forever defend, all and singular, the Property unto the Grantee
and Grantee’s successors and assigns, against every person whomsoever lawfully
claiming or to claim the same, or any part thereof, by through or under Grantor,
but not otherwise, subject however, to the Permitted Exceptions.

Taxes for the current year have been prorated as of the date hereof, and Grantee
assumes and agrees to pay the same and all charges, ad valorem taxes, and
assessments for the 2019 calendar year, later calendar years not yet due and
payable, each to the extent attributable to all or part of the Property, and any
taxes or assessments that might become due for prior years resulting from
Grantee’s acquisition or change of use of the Property.

 

EXCEPT AS OTHERWISE SET FORTH IN THE SPECIAL WARRANTY OF TITLE SET FORTH HEREIN
AND THE EXPRESS REPRESENTATIONS AND WARRANTIES BY GRANTOR SET FORTH IN ARTICLE
III OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED ________________, 2019
(THE “CONTRACT”), THE PROPERTY IS HEREBY GRANTED, SOLD, ASSIGNED, TRANSFERRED,
CONVEYED AND DELIVERED BY GRANTOR AND ACCEPTED BY GRANTEE ON AN “AS IS,” “WHERE
IS,” AND “WITH ALL FAULTS” BASIS, SPECIFICALLY AND EXPRESSLY WITHOUT ANY
WARRANTIES, REPRESENTATIONS OR GUARANTEES, EITHER

 

EXPRESS OR IMPLIED, OF ANY KIND, NATURE, OR TYPE WHATSOEVER (INCLUDING, WITHOUT
LIMITATION ANY WARRANTY OF CONDITION, HABITABILITY, MERCHANTABILITY, OR FITNESS
FOR A PARTICULAR PURPOSE OF THE PROPERTY, COMPLIANCE OF ALL OR ANY PART OF THE
PROPERTY WITH APPLICABLE ENVIRONMENTAL LAWS, RULES OR REGULATIONS WITH RESPECT
TO HEALTH, THE ENVIRONMENT, ENDANGERED SPECIES AND WETLANDS, INCLUDING, WITHOUT
LIMITATION, THE COMPREHENSIVE ENVIRONMENTAL RESPONSE COMPENSATION AND LIABILITY
ACT OF 1980, AS AMENDED) SAME BEING DISCLAIMED AND EXPRESSLY WAIVED BY
GRANTEE.  GRANTEE, ON ITS OWN BEHALF AND ON BEHALF OF ANYONE CLAIMING BY,
THROUGH OR UNDER GRANTEE, BY ACCEPTANCE OF THIS DEED RELEASES GRANTOR, ITS
PARTNERS, EMPLOYEES, OFFICERS, DIRECTORS, REPRESENTATIVES, ATTORNEYS AND AGENTS
FROM ANY AND ALL CLAIMS AGAINST ANY OF THEM IN CONNECTION THEREWITH, ALL AS MORE
FULLY DESCRIBED IN SECTION 4.6 THE CONTRACT, WHICH SECTION IS INCORPORATED INTO
THIS SPECIAL WARRANTY DEED BY THIS REFERENCE FOR ALL PURPOSES.

 

 

EXECUTED to be effective the _____ day of ___________, 2019.

 

 

GRANTOR:

 

 

 

 

 

 

 

 

 

THE STATE OF TEXAS

§

 

 

§

 

COUNTY OF HARRIS

§

 

 

This instrument was acknowledged before me on _________, 2019, by _________,
known or proved to me on satisfactory evidence to be the person and officer
whose name is subscribed to the foregoing instrument, and acknowledged to me
that he executed the same in the capacity and for the purposes and consideration
therein expressed, on behalf of such company.

(S E A L)

 

 

Notary Public, State of Texas

 

 

 

My Commission Expires:

 

 

 

 

SCHEDULE I

Submission Matters

Schedule I: Purchaser diligence request list has been omitted pursuant to Item
601(a)(5) of Regulation S-K.

 

 

 

SCHEDULE II

3-05 or 3-14 AUDIT

Seller acknowledges that under either Rule 3-05 or Rule 3-14 of Regulation S-X,
Purchaser is required to provide certain information in connection with reports
Purchaser is required to file with the Securities and Exchange Commission.

 

Accordingly, Seller agrees to:

 

(a) allow Purchaser and Purchaser’s representatives which includes third party
auditors, at Purchaser’s sole cost and expense, to perform an audit of the
Hotel, Property, Personal Property and business operations of and at the
properties to the extent required under either Rule 3-05 or Rule 3-14 of
Regulation S-X (hereinafter a Rule 3-05 or 3-14 Audit) for Seller’s period of
ownership, but not to exceed the three (3) complete fiscal years immediately
preceding the Closing Date and the stub period through the Closing Date (the
“Covered Audit Period”); and

 

(b) make available to Purchaser and Purchaser’s representatives for inspection
and audit following the Closing, at the Seller’s offices the Seller’s books and
records relating solely to the Seller’s operations that are reasonably requested
by Purchaser (but specifically excluding Seller’s tax returns) for any full or
partial years during the Covered Audit Period reasonably necessary to complete
the Rule 3-05 or 3-14 Audit; and

 

(c) sign the management representation letter to be provided by the Purchaser’s
independent auditors.

 

In connection with the foregoing, Purchaser shall give Seller no less than ten
(10) business days’ prior written notice of Purchaser’s plans to inspect and
audit such books and records, and Seller’s obligation to perform herein, extends
beyond closing.

 

Notwithstanding the foregoing, the Seller shall not be required to (a) prepare
or compile any materials, (b) incur any third-party costs or expenses in
connection with the Rule 3-05 or 3-14 Audit, (c) provide any books, records or
materials that could reasonably be expected to be books, records or materials in
the possession or control of the tenant parties, (d) provide any books, records
or materials that are not within the possession or control of the Seller, or (e)
make any representations or warranties with respect to such information beyond a
customary management representation letter signed by the Seller reasonably
requested by any accounting firm engaged by the Purchaser to deliver its
auditors report with respect to the Rule 3-05 or Rule 3-14 Audit. Purchaser
acknowledges and agrees that the foregoing accounting and financial materials to
be provided by Seller does not include any information or materials related to
the period prior to the acquisition of the property by Seller and is to be
limited solely to information regarding the property after they were placed into
operation by Seller. Seller acknowledges that the Rule 3-05 or Rule 3-14 Audit
may require Purchaser to perform a Rule 3-05 or 3-14 Audit both after the
Effective Date and after the Closing Date and Seller agrees that Seller’s
obligations under this Schedule II are material to the term of this Agreement,
and breach of this Schedule II will constitute a default under the terms of the
Agreement. Seller further agrees, that Purchaser’s sole and absolute remedy in
the event of default is that of specific performance.