Exhibit 10.1

HOTEL PURCHASE AND SALE AGREEMENT

by and between

THE ENTITIES LISTED ON SCHEDULE I ATTACHED HERETO,

each a Seller, and collectively, as Sellers

and

SCG GLOBAL HOLDINGS, L.L.C., a Delaware limited liability company, as Buyer

Effective Date: July 31, 2018

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TABLE OF CONTENTS

 

ARTICLE I Deadlines and Definitions

     1  

1.1

  Deadlines      1  

1.2

  Definitions      1  

ARTICLE II Purchase and Sale

     2  

2.1

  Land; Improvements      2  

2.2

  Personal Property      2  

2.3

  Contracts, Equipment Leases, and Space Leases      3  

2.4

  Bookings      3  

2.5

  Intangible Hotel Assets      3  

2.6

  Excluded Property      3  

2.7

  Certain Property Owned by Operating Tenants      4  

ARTICLE III Purchase Price

     4  

3.1

  Purchase Price      4  

3.2

  Allocation of Purchase Price      5  

3.3

  “All or Nothing” Basis      5  

ARTICLE IV Seller’s Representations and Warranties

     8  

4.1

  Good Standing      8  

4.2

  Due Authorization      8  

4.3

  No Violations or Defaults      8  

4.4

  Litigation      8  

4.5

  Condemnation Actions      8  

4.6

  Contracts      9  

4.7

  Equipment Leases      9  

4.8

  Management and Franchise Agreements      9  

4.9

  Space Leases      9  

4.10

  Employees      9  

4.11

  Bankruptcy      9  

4.12

  OFAC; Money Laundering      10  

4.13

  Seller Is Not a “Foreign Person”      10  

4.14

  Permits      10  

4.15

  Violations of Law      10  

4.16

  Title to Personal Property      10  

4.17

  Taxes      10  

4.18

  Financial Statements      10  

4.19

  Insurance      11  

4.20

  Right of Others      11  

4.21

  ERISA      11  

4.22

  Hazardous Substances      11  

4.23

  Designated Persons      11  

4.24

  Limitations on Representations and Warranties      11  

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ARTICLE V Buyer’s Representations and Warranties

     13  

5.1

  Good Standing      13  

5.2

  Due Authorization      13  

5.3

  No Violations or Defaults      13  

5.4

  Litigation      13  

5.5

  OFAC; Money Laundering      14  

ARTICLE VI Closing

     14  

6.1

  Closing      14  

6.2

  Costs      14  

ARTICLE VII Actions Pending Closing; Feasibility Period

     14  

7.1

  Conduct of Business; Maintenance and Operation of Property      14  

7.2

  Title Insurance      15  

7.3

  Survey      18  

7.4

  Inspection; Due Diligence Period      18  

7.5

  Exclusivity      21  

7.6

  Estoppels      21  

7.7

  Tax Clearance Certificates      21  

ARTICLE VIII Conditions Precedent to Buyer’s Obligations at Closing

     22  

8.1

  Representations and Warranties      22  

8.2

  Covenants of Sellers      22  

8.3

  Title      22  

8.4

  Seller Deliveries      22  

8.5

  Termination of Management Agreement and Operating Lease      22  

8.6

  Failure of Condition      22  

ARTICLE IX Conditions Precedent to Sellers’ Obligations at Closing

     23  

9.1

  Representations and Warranties      23  

9.2

  Buyer Deliveries      23  

9.3

  Covenants of Buyer      23  

9.4

  Franchise Agreement Releases      23  

9.5

  Failure of Condition      24  

ARTICLE X Closing Deliveries

     24  

10.1

  Deed      24  

10.2

  Bill of Sale      24  

10.3

  Assignment and Assumption Agreement      24  

10.4

  FIRPTA Certificate      25  

10.5

  Possession; Books and Records, Keys      25  

10.6

  Purchase Price      25  

10.7

  Title Affidavit      25  

10.8

  Seller Authority      25  

10.9

  Seller’s Certificate      25  

10.10

  Buyer’s Certificate      25  

10.11

  Buyer Authority      25  

 

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10.12

  Vehicle Bills of Sale      25  

10.13

  Closing Statement      26  

10.14

  Other Documents      26  

ARTICLE XI Default

     26  

11.1

  Buyer’s Default      26  

11.2

  Seller’s Default      26  

ARTICLE XII Limitation on Seller’s Liability, Liquor License; As-Is; Franchise

     27  

12.1

  Survival; Maximum Aggregate Liability      27  

12.2

  Liquor License      28  

12.3

  PROPERTY SOLD “AS IS”      29  

12.4

  LIMITATION ON REPRESENTATIONS AND WARRANTIES      29  

12.5

  New Franchise Agreement      32  

12.6

  Hotel Employees      33  

ARTICLE XIII Casualty or Condemnation

     34  

13.1

  Notice to Buyer      34  

13.2

  Risk      34  

ARTICLE XIV Apportionments

     34  

14.1

  Apportionments      34  

14.2

  Revenue and Receivables      35  

14.3

  Food and Beverage Revenue; Vending Machine Revenue      36  

14.4

  Guests’ Property      36  

14.5

  Gift Shop Operations      37  

14.6

  Employee Compensation      37  

14.7

  Inventories      37  

14.8

  Taxes      37  

14.9

  Bookings      38  

14.10

  Adjustments Between Sellers and Operating Tenants      38  

14.11

  Accounting      38  

ARTICLE XV Miscellaneous

     38  

15.1

  Assignment      38  

15.2

  Applicable Law      39  

15.3

  Headings; Exhibits      39  

15.4

  Notices      39  

15.5

  Waiver      40  

15.6

  Partial Invalidity      40  

15.7

  Entire Agreement      41  

15.8

  Time is of the Essence      41  

15.9

  Waiver of Jury Trial      41  

15.10

  Counterparts; Electronic Signatures      41  

15.11

  Brokerage      41  

15.12

  Construction      41  

15.13

  Attorneys’ Fees      41  

 

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15.14

  Confidentiality and Public Announcements      42  

15.15

  Time for Performance      42  

15.16

  Further Assurances      42  

15.17

  No Third-Party Beneficiaries      42  

15.18

  Section 1031 Exchanges      43  

15.19

  Florida-Specific Provisions      43  

 

 

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HOTEL PURCHASE AND SALE AGREEMENT

THIS HOTEL PURCHASE AND SALE AGREEMENT (this “Agreement”) is made to be
effective as of July 31, 2018 (the “Effective Date”), by and between THE
ENTITIES LISTED ON SCHEDULE I ATTACHED HERETO (each individually and
collectively, as the context so requires, a “Seller” and collectively,
“Sellers”) and SCG GLOBAL HOLDINGS, L.L.C., a Delaware limited liability company
(“Buyer”).

R E C I T A L S:

WHEREAS, Sellers are the owners of those certain tracts or parcels of land more
particularly described on Exhibits A-1 through A-8 (collectively, the “Parcels”)
and the Property (as hereinafter defined); and

WHEREAS, Buyer desires to acquire the Property from Sellers for the purchase
price of Two Hundred Twenty Nine Million and No/100 Dollars ($229,000,000.00)
(“Purchase Price”) and Sellers desire to sell and convey the Property to Buyer
for the Purchase Price and upon the terms and conditions hereinafter set forth.
The Purchase Price shall be allocated among each Hotel (as hereinafter defined)
and its related Property as set forth on Exhibit 3.2 attached hereto.

NOW, THEREFORE, for and in consideration of the promises, covenants,
representations and warranties hereinafter set forth, the sum of Ten Dollars
($10.00) and other good and valuable consideration in hand paid by Sellers to
Buyer and by Buyer to Sellers upon the execution of this Agreement, the receipt
and sufficiency of which are hereby acknowledged by each of the parties hereto,
the parties hereto hereby agree as follows:

ARTICLE I

Deadlines and Definitions

1.1 Deadlines. Wherever used in this Agreement, the following terms shall have
the meanings set forth below:

“Closing Deadline” shall mean 4:00 p.m. local Atlanta, Georgia time on or before
October 16, 2018, subject to extension in accordance with the terms hereof.
Buyer may extend the Closing Deadline to November 30, 2018 by delivery not less
than five (5) Business Days prior to the then scheduled Closing Deadline of
written notice to Seller of such extension and the delivery of an Extension
Deposit to Escrow Agent.

“Due Diligence Deadline” shall mean 6:00 p.m. local Atlanta, Georgia time on
July 31, 2018.

1.2 Definitions. In addition, wherever used in this Agreement, the terms set
forth on Schedule A shall have the meanings set forth on Schedule A.

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ARTICLE II

Purchase and Sale

Subject to the terms, conditions and provisions set forth in this Agreement, at
the Closing, each Seller shall sell, convey, transfer and assign and deliver to
Buyer, and Buyer shall purchase and accept from each Seller in accordance with
the terms of this Agreement, all of such Seller’s right, title and interest to
the property and assets set forth in Sections 2.1 – 2.5, but expressly excluding
the Excluded Property (all of such property and assets as hereinafter described
is collectively referred to as, the “Property”):

2.1 Land; Improvements. The Parcels, together with the land lying in the bed of
any street or highway in front of or adjoining the Parcels to the center line
thereof, all water and mineral rights, entitlements, development rights and all
easements, rights and other interests appurtenant thereto (collectively with the
Parcels, the “Land”), and the real property improvements to the Land, including,
but not limited to, the hotel buildings constructed on the Land and commonly
known as and located at the addresses set forth on Schedule I attached hereto;
other buildings and structures, paving, landscaping, lighting, signs mechanical,
heating, air conditioning, plumbing, electrical and ventilating systems and all
fixtures and equipment servicing the buildings and the Land and which constitute
real property under applicable Laws (collectively, the “Improvements”). The Land
and the Improvements are sometimes referred to together as the “Real Property”
and the hotels are sometimes referred to individually as a “Hotel” or
collectively, as the “Hotels”

2.2 Personal Property. The following personalty of each Seller (collectively the
“Personal Property”): (a) all furniture, furnishings, fixtures, vehicles, rugs,
mats, carpeting, wall and window coverings, window treatments, appliances,
kitchen, restaurant and bar equipment, devices, engines, telephone and other
communications equipment, computer equipment and hardware, televisions and other
video equipment, lighting and all other equipment located or to be located in
each Hotel (the “FF&E”), (b) all items included within the definition of
“Property and Equipment” under the Uniform System of Accounts and used in the
operation of each Hotel, including, without limitation, linen, china, glassware,
tableware, uniforms and similar items, subject to such depletion and replacement
prior to the Closing Date as shall occur in the ordinary course of business (the
“ Fixed Asset Supplies”); (c) all “Inventories” as defined in the Uniform System
of Accounts and used in the operation of each Hotel, such as provisions in
storerooms, refrigerators, pantries, and kitchens, beverages in wine cellars and
bars, other merchandise intended for sale or resale, food, fuel, mechanical
supplies, stationery, guest supplies, maintenance and housekeeping supplies and
other expensed supplies and similar items, whether in opened or unopened
containers, subject to such depletion and restocking prior to the Closing Date
as shall occur in the ordinary course of business (the “Inventories”), provided,
however, that to the extent that any applicable Law prohibits the transfer of
alcoholic beverages from any Seller to Buyer, such beverages shall not be
considered a part of Inventories but subject to Section 12.2; and (d) to the
extent in any Seller’s possession or control, and assignable, all plans and
specifications, if any, related to each Hotel, together with all books and
records related to each Hotel.

 

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2.3 Contracts, Equipment Leases, and Space Leases. Except for the Excluded
Contracts, all written service, maintenance, licensing, concession, and other
contracts or agreements related to the maintenance or operation of each Hotel to
which any Seller or Operating Tenant is a party, or entered into on behalf of
any Seller or Operating Tenant, and any amendments thereto, together with any
deposits made thereunder, but excluding the Management Agreements and Franchise
Agreements (the “Contracts”); all leases, and any amendments thereto, of
personal property located at, or used in the operation of, each Hotel (the
“Equipment Leases”) to which any Seller or Operating Tenant is a party, or
entered into on behalf of any Seller or Operating Tenant; and, if any, all
assignable leases, licenses and other occupancy agreements and any amendments
thereto, which establish a landlord/tenant relationship and provide for the use
or occupancy of space or facilities on or relating to each Hotel, including,
without limitation, for antenna sites and related equipment together with any
guarantees and deposits made in connection therewith, but excluding the
Operating Leases (the “Space Leases”), all as in effect as of the Effective Date
or entered into subsequent to the Effective Date in conformity with the
provisions of this Agreement.

2.4 Bookings. All bookings and reservations for guest, conference and banquet
rooms or other facilities at the Hotels (the “Bookings”) as of the Closing Date,
together with all deposits held by Sellers with respect thereto.

2.5 Intangible Hotel Assets. Hotel Guest Data and Information in any database
maintained by any Seller or any Hotel Manager related exclusively to the Hotels
or any of them and to the extent assignable without consent or to the extent
consent is obtained and at no out-of-pocket cost to Sellers, all right, title
and interest of Sellers and Operating Tenants to electronic files, data and
information, software licenses, internet domain names, URLs and websites,
telephone and facsimile numbers, goodwill of Sellers related to the Hotels,
trademarks, servicemarks, logos, Permits, any unexpired guaranties or
warranties, signage rights, and other items of intangible personal property
relating to the ownership or operation of the Hotels and owned by Sellers (the
“Intangible Hotel Assets”).

2.6 Excluded Property. Notwithstanding anything to the contrary set forth in
Sections 2.1 – 2.5 above, the property, assets, rights and interests set forth
below (the “Excluded Property”) shall not be transferred, assigned or conveyed
to Buyer, and shall be excluded from the Property:

(a) Cash. Except as otherwise expressly provided herein, all cash on hand or on
deposit in any house bank, operating account or other account or reserve
(including, without limitation, any seasonal reserves and FF&E reserves),
maintained in connection with the Hotels, together with any and all credit card
charges, checks and other instruments which Sellers have submitted for payment
as of the Closing. For avoidance of doubt, the parties hereby agree and
acknowledge that all FF&E or similar reserve accounts held by Lender or
otherwise in connection with the Existing Financing will not be transferred to
Buyer as part of the Purchase Price. Buyer acknowledges and agrees that any such
reserve accounts required under the Existing Financing will need to either:
(i) in the event that such funds are not released to Sellers and remain on
deposit for the benefit of Buyer, be reimbursed by Buyer to Sellers at Closing,
or (ii) in the event that such funds are released to Sellers, be replenished by
Buyer at Closing;

(b) Accounts Receivable. All Accounts Receivable, other than the Guest Ledger;

 

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(c) Third-Party Property. Any and all fixtures, personal property or
intellectual property or other assets owned by or proprietary to (i) the lessor
under any Equipment Leases, (ii) the supplier, vendor, licensor or other party
under any Contracts, (iii) the tenants under any Space Leases, (iv) any Hotel
Employee, (v) any guest or customer of the Hotels, (vi) Hotel Manager, and
(vii) Franchisor pursuant to the Franchise Agreements;

(d) Hotel Guest Data. Hotel Guest Data and Information in any database
maintained by Franchisor or any of their Affiliates. Notwithstanding the
foregoing, it is contemplated that after Closing certain of the Hotel Guest Data
and Information will continue to be utilized in the operation of the Hotel
pursuant to and subject to the terms of any New Franchise Agreement with respect
to the Hotels;

(e) Confidential Materials and Personnel Files. All Confidential Materials and
personnel files for Hotel Employees; and

(f) National/Regional Contracts. Master service agreements pursuant to which
goods, services, licenses or other items are provided to other hotels which are
operated by Hotel Manager (or its affiliates), in addition to the Hotels shall
be terminated by Hotel Manager at Closing with respect to the Hotels at Sellers’
cost and expense without any obligation to replace the property subject thereto,
if any.

2.7 Certain Property Owned by Operating Tenants. Notwithstanding anything to the
contrary contained herein, the parties acknowledge and agree that (a) prior to
the Effective Date, each Seller entered into the Operating Lease with the
applicable Operating Tenant, (b) an Operating Tenant, rather than (or in
addition to) Sellers, may have rights, title and interests in and to some of the
Property (the “Operating Tenant Owned Property”), (c) each Seller shall cause
the applicable Operating Tenant to transfer all of its right, title and interest
in and to such Operating Tenant Owned Property to Seller on or before the
Closing in connection with the termination of each Operating Lease (and in turn
permitting each Seller to convey the same to Buyer at Closing in accordance with
this Agreement), (d) Operating Tenants shall not have any liability for or as a
result of any default or breach by any Seller of any of such Seller’s
representations, warranties and/or obligations hereunder, (e) all of the
covenants set forth in this Agreement relating to the Property shall also apply
to the Operating Tenant Owned Property (f) each Seller shall cause each
Operating Tenant to comply with the covenants set forth in this Agreement as if
they were a Seller hereunder, to the extent applicable, (g) Sellers and
Operating Tenants shall terminate all of the Operating Leases at their sole cost
and expenses at or prior to Closing, and (h) the Sellers shall be responsible
for any breaches of this Agreement caused by any of the Operating Tenants.

ARTICLE III

Purchase Price

3.1 Purchase Price. The Purchase Price, subject to the prorations and credits
set forth herein, shall be due and payable as follows:

 

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(a) Independent Consideration. Notwithstanding anything herein to the contrary,
should the Deposit be returned to Buyer pursuant to any provision of this
Agreement, Seller shall receive from the Title Company a portion of the Deposit
equal to One Hundred and No/100 Dollars ($100.00), as independent contract
consideration, which independent contract consideration, the sufficiency of
which is hereby acknowledged by the parties, is fully earned by Seller and is
non-refundable under any circumstances, and Buyer shall receive from the Title
Company the balance of the Deposit.

(b) Deposit. No later than one (1) Business Day after the Effective Date, Buyer
shall make the Deposit, in immediately available funds, with Escrow Agent. If
Buyer does not deliver the Deposit to the Escrow Agent as provided herein,
Sellers shall have the right to Terminate this Agreement by giving written
notice to Buyer, and no party shall thereafter have any further liability to the
other under this Agreement except as otherwise specifically provided herein.
Upon Closing, the Deposit shall be applied to the Purchase Price. If Buyer
terminates this Agreement on or before the Due Diligence Deadline, then Escrow
Agent shall promptly return the Deposit to Buyer. Except as expressly otherwise
set forth herein, after the Due Diligence Deadline, the Deposit shall be
non-refundable to Buyer, but shall be applied against the Purchase Price on the
Closing Date and shall otherwise be held and delivered by Escrow Agent in
accordance with the escrow instructions executed by Sellers, Buyer and Escrow
Agent (the “Escrow Instructions”) substantially in the form attached hereto as
Exhibit B.

(c) Remainder of Purchase Price. At Closing, Buyer shall pay to Escrow Agent, to
be released to Sellers if the Closing occurs, an amount equal to the difference
between (i) the Purchase Price, subject to Section 3.(4)(c), and (ii) the amount
of the Deposit to be released to Sellers by Escrow Agent, subject to the
credits, prorations and adjustments set forth herein, in immediately available
funds by federal reserve bank wire transfer to such account and bank as Escrow
Agent shall designate in writing to Buyer on or prior to Closing.

3.2 Allocation of Purchase Price. The allocation of the Purchase Price among the
Hotels is attached hereto as Exhibit 3.2 attached hereto (the “Hotel
Allocation”). In addition, Sellers and Buyer shall cooperate with each other in
good faith to arrive at a mutually acceptable allocation of that portion of the
Purchase Price allocated to each Hotel among the Real Property, the Personal
Property located thereat and other customary items either Sellers or Buyer may
request to be allocated (the “Property Allocation”), and if agreed upon, such
additional aspects of the Property Allocation shall be deemed attached hereto as
Exhibit 3.2. If the Property Allocation cannot be agreed upon, each party may
use its own determination and bear any consequences related thereto; provided,
however, if, and only if, Buyer’s allocation allocates less than 8% of the
applicable Hotel Allocation to the tangible Personal Property of the applicable
Hotel, Buyer’s allocation shall control with respect to the amount to be stated
on any transfer tax declaration submitted in connection with any Deed for such
Hotel and in calculating any transfer, recordation, or similar tax paid in
connection with the conveyance of such Hotel. If the parties are able to agree
upon the Property Allocation, Sellers and Buyer agree to (i) be bound by the
Allocation, and (ii) act in accordance with the Allocation in the preparation of
financial statements and filing of all tax returns.

3.3 “All or Nothing” Basis. Subject to the terms and conditions of this
Agreement, Sellers agree to sell to Buyer, and Buyer agrees to purchase from
Sellers, all of the property comprising the Property at Closing in consideration
for the Purchase Price set forth in this Agreement. Buyer acknowledges and
agrees that other than as specifically set forth in this

 

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Agreement (i) the sale of the Property shall be on an “all or nothing” basis,
(ii) Buyer shall have no right, and Sellers shall have no obligation, to exclude
any portion of the Property from the Transaction, and (iii) any Termination of
this Agreement shall constitute a Termination of this Agreement as to all of the
Property.

3.4 Loan Assumption. At the Closing, Buyer shall assume the Existing Financing,
subject to the terms hereof. With respect to Buyer’s assumption of Existing
Financing:

(a) Sellers and Buyer shall cooperate and use commercially reasonable efforts to
cause Lender (or its loan servicer, as applicable) to approve (i) Buyer’s
assumption of the Existing Financing from and after the Closing Date, (ii) the
termination of the Management Agreements and Franchise Agreements, (iii) the
appointment of Buyer’s new manager, and (iv) the Buyer’s execution of the New
Franchise Agreements and replacement management agreements (collectively, “Loan
Assumption”) and to cause the applicable Seller and all applicable guarantors,
if any, to be released from any and all liability under the Existing Financing
first arising or accruing subsequent to the Closing Date (collectively, “Lender
Approval”). In connection therewith, Buyer covenants and agrees to submit loan
assumption applications along with any required loan application fees and
deposits to the Lender promptly after the Effective Date, and thereafter shall
use good faith and diligent efforts to obtain the Lender Approval.

(b) In connection with the foregoing, Buyer agrees (i) to reasonably cooperate
with Lender’s customary requests for delivery of information about Buyer,
subject to any of Buyer’s reasonable protocols restricting the disclosure of
information regarding its members, partners and investors, (ii) to approve any
commercially reasonable loan assumption documents in form and content
customarily required of similarly situated buyers in similar transactions;
provided, however, that such documents shall be in form satisfactory to Buyer,
in its commercially reasonable discretion, and without limitation on the
foregoing, such documents (A) shall only require Buyer and Buyer’s Replacement
Guarantor to assume the obligations under the Existing Financing Documents for
such Existing Financing first arising after (but not before) the Closing, and in
substantially the same form as those set forth in the current Existing Financing
Documents for such Existing Financing, with such changes as Buyer may request to
reflect the organizational requirements of Buyer (which changes shall, among
other items, permit certain internal transfers within Buyer and its Affiliates
and other indirect transfers so long as the same do not result in a change of
control of Buyer and Buyer complies with Lender’s “know your customer”
requirements for transfers that result in a transferee owning more than 20% of a
direct or indirect interest in Buyer), and (B) shall not include any requirement
(except as Buyer approves, which approval may be given or withheld in Buyer’s
sole and absolute discretion) that (I) any terms of the Existing Financing
Documents for such Existing Financing be changed except as required by Buyer as
provided in clause (A) above (including any change in the economic provisions of
the Existing Financing Documents), (II) any person or entity provide any
guaranty to Lender other than a nonrecourse carve-out guaranty and/or an
environmental indemnity in the form as exists in the Existing Financing
Documents or otherwise in form satisfactory to Buyer (in Buyer’s sole and
absolute discretion), from Buyer’s Replacement Guarantor or (III) there be any
increase in reserves or new reserves or any other obligations not currently
imposed under the Existing Financing Documents for such Existing Financing, and
(iii) to comply with any other commercially reasonable requirements and
conditions of the Lender in

 

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connection with the assumption of such Existing Financing (to the extent the
same do not conflict with the foregoing provisions of this sentence). In
connection with its request for the Lender Approval, except as provided above:
(1) Buyer agrees to provided Buyer’s Replacement Guarantor for the non-recourse
carve out obligations and environmental indemnity obligations under the Existing
Financing, and (2) Buyer acknowledges that the economic terms of the Existing
Financing shall not be modified in connection with the Lender Approval and that
Buyer’s obligation to perform under this Agreement shall not be conditioned upon
the Lender providing any modifications to the economic terms of the Existing
Financing. Sellers shall reasonably cooperate with Buyer in applying for and
obtaining the Lender Approval, including delivery of any notices or requests
required to be submitted in connection therewith or other information regarding
the Property reasonably requested by the Lender. Buyer shall provide Sellers
with updates, upon Sellers’ request, of the status of the Lender Approval.

(c) Any loan assumption fees required by any Lender as a condition to the Lender
Approval, as well as all other costs and expenses of a Lender associated with
issuance of the Lender Approval, including without limitation all attorneys’
fees, title costs, appraisal fees, rating agency fees, and other actual third
party costs incurred by Lender or the servicer of such Existing Financing in
connection with the application for the Lender Approval, shall be paid by Buyer
at the Closing. The Existing Financing shall be credited towards the Purchase
Price, provided, 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 (but excluding any
assumption fees paid by Buyer), if any, as of the Closing Date.

(d) Sellers acknowledge that as of the Effective Date, Buyer’s Replacement
Guarantor does not satisfy any of the financial covenants set forth in the
Existing Financing and that Buyer’s Replacement Guarantor will only be able to
satisfy such financial covenants when SREIT, which is the general partner of
Buyer’s Replacement Guarantor, has received purchase orders for at least
$150,000,000 in shares and all of the conditions to the release of escrow
described in the Prospectus of Starwood Real Estate Income Trust, Inc. dated as
of December 27, 2017 (as supplemented, modified or amended) have been satisfied.
In the event Buyer anticipates that Buyer’s Replacement Guarantor will fail to
satisfy the financial covenants set forth in the Existing Financing as of the
Closing Deadline (as extended pursuant to Section 1.1 hereof), Buyer shall have
the right to further extend the Closing Deadline for an additional forty-five
(45) days by delivery not less than five (5) Business Days prior to the then
scheduled Closing Deadline of written notice to Seller of such extension and the
delivery of an additional Extension Deposit to Escrow Agent. Buyer’s Replacement
Guarantor’s failure to satisfy the financial covenants set forth in the Existing
Financing as of the Closing Deadline (as extended pursuant to this
Section 3.4(d)) shall constitute a breach of default of this Agreement by Buyer
and Sellers shall have the right to avail themselves of the remedies provided
in, and subject to, Section 11.1.

 

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ARTICLE IV

Seller’s Representations and Warranties

In order to induce Buyer to enter into this Agreement and to consummate the
Transaction contemplated hereby, each Seller, with respect to only itself and
its Property, hereby represents and warrants to Buyer as follows:

4.1 Good Standing. Seller is a limited liability company duly organized, validly
existing and in good standing under the Laws of the State of Delaware, is
authorized to conduct the business in which it is now engaged, and is duly
qualified to do business in all jurisdictions where the ownership of its assets
or the conduct of its business makes such qualification necessary.

4.2 Due Authorization. The execution, delivery and performance of this Agreement
and the consummation of the Transaction have been duly and validly authorized by
all requisite limited liability company actions of Seller, none of which actions
have been modified or rescinded, and all of which actions are in full force and
effect. This Agreement constitutes a valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms, subject only to
applicable bankruptcy, insolvency and similar laws and equitable principles
affecting the rights of creditors generally.

4.3 No Violations or Defaults. The execution, delivery and performance of this
Agreement and the consummation by Seller of the Transaction contemplated hereby
will not (a) violate any Law or any order of any court or governmental authority
with proper jurisdiction binding against Seller or its assets; (b) result in a
breach or default under any provision of the organizational documents of Seller
or (c) require any consent or approval or vote that has not been taken or given,
or as of the Closing Date shall not have been taken or given. Notwithstanding
the foregoing, Seller makes no representations or warranty regarding (i) the
assignability of any particular Permit, Equipment Lease or Contract, or (ii) as
to whether the consent or approval of any governmental authority (as to Permits)
or any third parties (as to Equipment Leases and Contracts) is required for the
assignment of such documents.

4.4 Litigation. Except as set forth on Exhibit 4.4, neither Seller nor any
Operating Tenant nor, to Seller’s knowledge, Hotel Manager, has received written
notice of any litigation, investigations or other proceedings that remain
pending against Seller affecting any portion of the Property, the Hotel
Employees (including any pending labor grievances or arbitrations) or the
operation of the Hotels, nor does Seller have any knowledge that any such
litigation, investigations or other proceedings are pending or threatened. To
Seller’s knowledge, no injunction, decree, order, writ or judgment is
outstanding with respect to the Property, the Hotel Employees or the operation
of the Hotel.

4.5 Condemnation Actions. Except as set forth on Exhibit 4.4, there are no
condemnation actions pending or, to Seller’s knowledge, threatened in writing
with respect to the Property.

 

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4.6 Contracts. All Material Contracts (and to Seller’s knowledge, all Contracts)
are listed on Exhibit 4.6 attached hereto. All Material Contracts are in full
force and effect. Neither Seller nor Operating Tenant has given or received,
and, to Seller’s knowledge, Hotel Manager has not given or received, any notice
of any breach or default under the Material Contracts and, to Seller’s
knowledge, there are no defaults or events that with notice or the passage of
time or both, would constitute a default by Seller under any Material Contract,
nor by any other party thereto. Seller has made (or will make within five
(5) Business Days after the Effective Date) available to Buyer true and complete
copies of the Material Contracts (and to Seller’s knowledge, all other
Contracts).

4.7 Equipment Leases. All Material Equipment Leases (and to Seller’s knowledge,
all Equipment Leases) are listed on Exhibit 4.7 attached hereto. All Material
Equipment Leases are in full force and effect. Neither Seller nor Operating
Tenant has given or received, and, to Seller’s knowledge, Hotel Manager has not
given or received, any notice of any breach or default under the Material
Equipment Leases and, to Seller’s knowledge, there are no defaults or events
that with notice or the passage of time or both, would constitute a default by
Seller or Operating Tenant under any such Equipment Lease, nor by any other
party thereto. Seller has made (or will make within five (5) Business Days after
the Effective Date) available to Buyer true and complete copies of the Material
Equipment Leases (and to Seller’s knowledge, all other Equipment Leases).

4.8 Management and Franchise Agreements. There are no existing management
contracts or franchise agreements relating to the Property other than (i) the
Management Agreements and (ii) the Franchise Agreements. All Franchise
Agreements and Management Agreements are in full force and effect. Neither
Seller nor Operating Tenant has given or received any notice of any default
under the Franchise Agreements, and, to Seller’s knowledge, there are no
material defaults under any Franchise Agreement by any party thereto. Seller has
made (or will make within five (5) Business Days after the Effective Date)
available to Buyer true and complete copies of the Franchise Agreements.

4.9 Space Leases. All Space Leases affecting all or any portion of the Property
are listed on Exhibit 4.9 attached hereto. All such Space Leases are in full
force and effect. Neither Seller nor Operating Tenant has given or received,
and, to Seller’s knowledge, Hotel Manager has not given or received, any notice
of any breach or default under the Space Leases and, to Seller’s knowledge,
there are no material defaults or events that with notice or the passage of time
or both, would constitute a material default by Seller or Operating Tenant under
any such Space Leases, nor by any other party thereto. Seller has made available
(or will make within five (5) Business Days after the Effective Date) to Buyer
true and complete copies of the Space Leases.

4.10 Employees. Seller does not have any employees. All Hotel Employees are
employees of Hotel Manager. Neither Seller, Operating Tenant nor Hotel Manager
is a party to any union or collective bargaining agreement with any Hotel
Employees. Hotel Manager is not a party to any written employment or
compensation agreement with any of the Hotel Employees that would be binding on
Buyer after Closing.

4.11 Bankruptcy. No Act of Bankruptcy has occurred with respect to Seller or
Operating Tenant, nor is any Act of Bankruptcy contemplated by Seller or
Operating Tenant.

 

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4.12 OFAC; Money Laundering. Neither Seller, Operating Tenant nor any of their
respective Affiliates, are acting, directly or indirectly, for or on behalf of
any person named by the United States Treasury Department as a Specifically
Designated National and Blocked Person, or for or on behalf of any person
designated in Executive Order 13224 as a person who commits, threatens to
commit, or supports terrorism. Neither Seller nor Operating Tenant is engaged in
the Transaction directly or indirectly on behalf of, or facilitating such
transaction directly or indirectly on behalf of, any such person.

4.13 Seller Is Not a “Foreign Person”. Neither Seller nor Operating Tenant is a
“foreign person” within the meaning of Section 1445 of the Internal Revenue
Code, as amended (i.e., neither Seller nor Operating Tenant is a foreign
corporation, foreign partnership, foreign trust, foreign estate or foreign
person as those terms are defined in the Internal Revenue Code and regulations
promulgated thereunder).

4.14 Permits. Neither Seller nor Operating Tenant has received, and, to Seller’s
knowledge, Hotel Manager has not received, a written notice from any applicable
governmental authority of (a) any violation, default, intended or threatened
non-renewal, suspension or revocation of any Permits or (b) any Permits
necessary for the use, operation or occupancy of the Hotel which have not been
issued or are not effective. Seller has made (or will make within five (5)
Business Days after the Effective Date) available to Buyer true, correct and
complete copies of all material Permits.

4.15 Violations of Law. Neither Seller nor Operating Tenant has received, and,
to Seller’s knowledge, Hotel Manager has not received, any written notice from
any governmental authority having jurisdiction over the Property that all or any
portion of the Property is in violation of any applicable Laws, which violation
has not been cured or remedied in accordance with applicable Laws.

4.16 Title to Personal Property. Seller or Operating Tenant, as applicable, has
good and valid title to the tangible Personal Property, and such tangible
Personal Property shall be free and clear of all liens and encumbrances as of
the Closing, except for the Personal Property subject to the Equipment Leases,
which shall be subject only to the ownership interest of the lessor thereunder.

4.17 Taxes. All Taxes that are due with respect to Seller or Operating Tenant or
otherwise in connection with the ownership or operation of the Hotel have been
paid in full or if due on or after the Closing Date will be paid in full (or
will be provided for at the Closing pursuant to the provisions of Section 14.1
below), and all required reports and returns relating thereto have been, or will
be, timely filed, subject to any extension rights. Except as set forth on
Exhibit 4.17, no appeal, audit or other protest proceeding is pending with
respect to the real estate taxes affecting the Property. Neither Seller,
Operating Tenant nor, to Seller’s knowledge, Hotel Manager, has received written
notice of any special tax assessments relating to the Property or any portion
thereof.

4.18 Financial Statements. The financial statements for the years ended December
2015, December 2016 and December 2017 and year-to-date financial statements from
January through May, 2018 provided to Buyer with respect to the Hotel are true
and complete copies of the financial statements prepared by Hotel Manager. To
Seller’s knowledge, there are no errors or omissions in such financial
statements that would cause such financial statements to be untrue or incomplete
in any material respect.

 

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4.19 Insurance. Neither Seller nor Operating Tenant has received any written
notice of a breach or default under any insurance policy maintained by or on
behalf of the Seller with respect to the Property, which has not been cured or
dismissed, or the cancellation of such insurance policy.

4.20 Right of Others. Neither Seller nor Operating Tenant has granted or is
subject to any unsatisfied option, right of first refusal or any other similar
rights in favor of any person or entity applicable to the sale of the Property
contemplated to Buyer. Prior to the Effective Date, Seller delivered by Buyer a
true, correct and complete copy of the IHG Waiver (as hereinafter defined).

4.21 ERISA. Neither Seller nor Operating tenant is (and, throughout the period
transactions are occurring pursuant to this Agreement, will not be), and is not
acting on behalf of (and, throughout the period transactions are occurring
pursuant to this Agreement, will not be acting on behalf of), an “employee
benefit plan” as defined in Section 3(3) of ERISA that is subject to Title I of
ERISA, a “plan” as defined in and subject to Section 4975 of the Code or an
entity deemed to hold the plan assets of any of the foregoing pursuant to 29
C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA. None of the
transactions contemplated by this Agreement are in violation of any statutes
applicable to Seller or Operating Tenant that regulate investments of, and
fiduciary obligations with respect to, governmental plans and that are similar
to the provisions of Section 406 of ERISA or Section 4975 of the Code.

4.22 Hazardous Substances. Seller has delivered to Buyer true and complete
copies of the environmental assessments, reports and studies relating to the
Property set forth on Exhibit 4.22 (the “Environmental Reports”), which
Environmental Reports are the most recent environmental assessments, reports and
studies relating to the Property in Seller’s or Operating Tenant’s possession.
Neither Seller nor Operating Tenant has received any written notice from any
governmental authority having jurisdiction over the Property that all or a
portion of the Property is in violation of any applicable Environmental Laws,
and Seller has no knowledge of any such violation.

4.23 Existing Financing. The Existing Financing Documents as set forth on
Exhibit 4.23 are all of the documents related to the Existing Financing and
true, correct and complete copies have been provided to Buyer. No Event of
Default exists under the terms of the Existing Financing Documents, and to
Seller’s knowledge, no event has occurred which, with the passage of time or the
giving of notice or both, would constitute an Event of Default under the
Existing Financing Documents.

4.24 Designated Persons. As used in this Agreement, the words “Seller’s
knowledge” or words of similar import shall be deemed to mean, and shall be
limited to, the actual knowledge of Mark K. Rafuse, Aditya Bhoopathy or Steven
Nicholas, in each case after due inquiry of the Hotel Manager, but without any
other obligation of investigation or inquiry; provided, however, there shall be
no personal liability on the part of such person arising out of any
representations or warranties made herein or otherwise.

 

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4.25 Limitations on Representations and Warranties.

(a) Each of Seller’s Warranties shall be deemed modified to reflect any changes
in the same as a result actions Sellers are expressly permitted to take under
this Agreement or the acts of Buyer. Each of Seller’s Warranties shall be deemed
modified to reflect Buyer’s deemed knowledge as of the Due Diligence Deadline.
Further, to the extent that Buyer is deemed to know after the Due Diligence
Deadline but prior to the Closing Date that any of Seller’s Warranties are
inaccurate, untrue or incorrect and such inaccurate, untrue or incorrect
Seller’s Warranty has a Property Material Adverse Effect, and (b) Buyer
nonetheless proceeds to Closing notwithstanding such Property Material Adverse
Effect, then such Seller’s Warranties shall be deemed modified to reflect
Buyer’s deemed knowledge. Seller’s Warranties shall not be deemed modified after
the Due Diligence Deadline to reflect Buyer’s deemed knowledge if such
inaccuracy, untruth or incorrectness does not constitute a Property Material
Adverse Effect. Buyer shall be “deemed to know” any fact, circumstance or
information or shall have “deemed knowledge” of the same to the extent (i) that
the Buyer has actual knowledge of a particular fact or circumstance or
information that is inconsistent with any Seller’s Warranty, or (ii) this
Agreement, any closing documents executed by Sellers, any document posted in the
electronic data room or delivered directly to Buyer no later than five
(5) Business Days prior to the expiration of the Due Diligence Deadline, or any
third party reports prepared or obtained by any Buyer’s Representatives and
delivered to Buyer in connection with Buyer’s due diligence discloses a
particular fact or circumstance or contains information that is inconsistent
with any Seller’s Warranty.

(b) If prior to the Closing, (i) the Buyer has actual knowledge (or Buyer is
deemed to have knowledge as defined in subparagraph (a) above) that any of
Seller’s Warranties is inaccurate, untrue or incorrect and Buyer gives Sellers
notice thereof (Buyer agreeing to give Seller written notice thereof within five
(5) Business Days of obtaining such actual knowledge but, in any event, prior to
the Closing Date, and whether or not such inaccurate, untrue or incorrect
Seller’s Warranty has a Property Material Adverse Effect), or (ii) Sellers shall
notify Buyer that any of Seller’s Warranties is untrue, inaccurate or incorrect,
then Sellers may, in its sole discretion, elect by notice to Buyer to adjourn
the Closing for up to thirty (30) days in order to attempt to cure or correct
such untrue, inaccurate or incorrect Seller’s Warranty. If any such inaccurate,
untrue or incorrect Seller’s Warranty has a Property Material Adverse Effect,
and (A) is not cured or corrected by Sellers on or before the Closing Date (as
the same may be adjourned as provided above) or (B) such inaccuracy or such
Property Material Adverse Effect is not cured by an offset from the Purchase
Price on or before the Closing Date (as the same may be adjourned as provided
above) in such amount as is reasonably determined by Buyer and Sellers to offset
or cure the impact of such inaccuracy causing such Property Material Adverse
Effect as aforesaid, then such inaccurate, untrue or incorrect Seller’s Warranty
shall constitute a failure of the Buyer’s Conditions as set forth in Section 8.1
and Buyer, as its sole remedy shall elect either (x) to waive such
misrepresentations or breaches of Seller’s Warranties and consummate the
Transaction contemplated hereby without any reduction of or credit against the
Purchase Price, or (y) to Terminate this Agreement by notice given to Sellers on
or before the Closing Date, in which event, (i) the Deposit shall be returned to
Buyer (provided, further, that if, and only if, the

 

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inaccuracy or misrepresentation of such Seller’s Warranty existed as of the
Effective Date and any Seller had knowledge of such inaccuracy or
misrepresentation on the Effective Date, or if the inaccuracy or
misrepresentation of such Seller’s Warranty is the result of the intentional act
or omission of a Seller after the Effective Date in violation of the terms of
this Agreement, Buyer shall have the right to avail itself of the remedies
provided in, and subject to, Section 11.2) and (ii) this Agreement shall be
Terminated and neither party shall have any further rights, obligations or
liabilities hereunder except as otherwise specifically provided herein.

(c) The provisions of this Section 4.25 shall survive Closing or any earlier
termination of this Agreement.

ARTICLE V

Buyer’s Representations and Warranties

In order to induce Sellers to enter into this Agreement and to consummate the
transactions contemplated hereby, Buyer represents and warrants to Sellers as
follows:

5.1 Good Standing. Buyer is a limited liability company duly organized, validly
existing and in good standing under the Laws of Delaware, is authorized to
conduct the business in which it is now engaged and is, or as of the Closing
Date shall be, qualified to do business in all jurisdictions where the ownership
of its assets or the conduct of its business makes such qualification necessary.

5.2 Due Authorization. The execution, delivery and performance of this Agreement
and the consummation of the Transaction have been duly and validly authorized by
all requisite actions of Buyer (none of which actions have been modified or
rescinded, and all of which actions are in full force and effect). This
Agreement constitutes a valid and binding obligation of Buyer, enforceable
against Buyer in accordance with its terms, subject only to applicable
bankruptcy, insolvency and similar laws and equitable principles affecting the
rights of creditors generally.

5.3 No Violations or Defaults. The execution, delivery and performance of this
Agreement and the consummation by Buyer of the Transaction will not (a) violate
any law or any order of any court or governmental authority with proper
jurisdiction; (b) result in a breach or default under any contract or other
binding commitment of Buyer or any provision of the organizational documents of
Buyer; or (c) require any consent or approval or vote that has not been taken or
given, or as of the Closing Date shall not have been taken or given.

5.4 Litigation. There are no actions, suits, arbitrations, governmental
investigations or other proceedings pending or, to the knowledge of Buyer,
threatened in writing against Buyer before any court or governmental authority,
an adverse determination of which might adversely affect (a) the financial
condition or operations of Buyer or (b) Buyer’s ability to enter into or perform
this Agreement.

 

 

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5.5 OFAC; Money Laundering. Neither Buyer, Buyer’s Replacement Guarantor, nor
any of their Affiliates, are acting, directly or indirectly, for or on behalf of
any person named by the United States Treasury Department as a Specifically
Designated National and Blocked Person, or for or on behalf of any person
designated in Executive Order 13224 as a person who commits, threatens to
commit, or supports terrorism. Neither Buyer nor Buyer’s Replacement Guarantor
is engaged in the transaction contemplated by this Agreement directly or
indirectly on behalf of, or facilitating such transaction directly or indirectly
on behalf of, any such person.

ARTICLE VI

Closing

6.1 Closing. The time and place of Closing shall be on the Closing Deadline,
through escrow with Escrow Agent, or on such alternative date or at such
alternative location as may be mutually agreed upon by Sellers and Buyer in
writing. All of Sellers and Buyer’s deliveries, the funds for payment of the
Purchase Price and sufficient additional funds necessary for the parties to pay
the costs contemplated by Section 6.2 shall be delivered in escrow to the Escrow
Agent on or prior to the Closing Deadline, and there shall be no requirement
that the parties attend a formal settlement.

6.2 Costs. Buyer and Sellers shall each pay the transaction costs and expenses
as set forth on Exhibit 6.2 attached hereto; provided, however Buyer agrees to
pay the first $200,000 of Sellers’ transaction costs and expenses. Any other
ordinary and usual closing costs and expenses, except as expressly provided in
this Agreement, in connection with the sale of the Property shall be allocated
between Buyer and Sellers in accordance with the customary practice in the
county where the applicable Hotel is located. The obligations of the parties
under this Section 6.2 shall survive the Closing (and not be merged therein) or
any earlier termination of this Agreement.

ARTICLE VII

Actions Pending Closing; Feasibility Period

7.1 Conduct of Business; Maintenance and Operation of Property. Between the
Effective Date and the Closing Date, subject to and consistent with the terms of
the applicable Management Agreement, each Seller shall cause its Property to be
operated and managed in the manner which is substantially similar to the manner
it has been operated and managed prior to the Effective Date, which undertaking
includes, but is not limited to:

(a) provide a level of employment at each Hotel sufficient for the normal
operations of such Hotel as currently conducted;

(b) accept, in the ordinary course of business, booking contracts for the use of
guest rooms and facilities of the Hotel;

(c) keep, observe, and perform all material obligations under the Space Leases,
the Contracts, the Equipment Leases, the Franchise Agreements, the Management
Agreements and all other applicable contractual arrangements relating to the
Property;

(d) perform maintenance and repairs in the ordinary course of business, except
that Seller shall not be required to make any capital improvements or
replacements to the Property;

 

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(e) Sellers will not, and, will not permit Operating Tenant and Hotel Manager
to, enter into or otherwise amend or terminate any Space Leases, Material
Equipment Leases, or Material Contracts (except as expressly required by the
terms thereof) without the prior written approval of Buyer, which approval
(i) prior to the Due Diligence Deadline, shall not be unreasonably withheld,
conditioned or delayed, and (ii) after the Due Diligence Deadline, may be given
or withheld in Buyer’s sole and absolute discretion; provided, however, that in
the event Buyer fails to respond to Sellers within five (5) Business Days after
Buyer is notified of such proposed agreement, amendment or termination, such
failure to respond shall be deemed to constitute Buyer’s approval of same.
Notwithstanding the foregoing, Sellers will be allowed at all times to
(A) amend, extend or terminate Space Leases, Equipment Leases, and Contracts as
expressly required by the terms thereof, and (B) enter into new Equipment Leases
or Contracts if they are either (I) not a Material Contract or Material
Equipment Lease or (II) terminable by Buyer without any termination fee and upon
not more than thirty (30) days’ notice; to the extent any Seller enters into,
amends or terminates any Space Lease, Equipment Lease or Contract prior to the
Due Diligence Deadline, Sellers shall promptly, but in no event two (2) Business
Day, provide written notice of the same and a copy to the Buyer. Sellers will
not, and, will not permit Operating Tenant to, enter into or otherwise amend or
terminate any of the Existing Financing Documents without the prior written
approval of Buyer, which approval (i) prior to the Due Diligence Deadline, shall
not be unreasonably withheld, conditioned or delayed, and (ii) after the Due
Diligence Deadline, may be given or withheld in Buyer’s sole and absolute
discretion;

(f) provide written notice to Buyer of any litigation, arbitration,
investigation, labor dispute of which Seller or Operating Tenant receives
written notice, and provide a copy of any notice of default under any Existing
Financing Document, Space Lease, Equipment Lease, Contract, Franchise Agreement
or Management Agreement;

(g) provide Buyer with monthly operating statements received by Sellers or
Operating Tenant from the Hotel Managers;

(h) use commercially reasonable efforts to preserve in force all existing
material Permits and to timely file all returns with respect to any Taxes and
timely pay all Taxes (subject to properly filed extensions and rights to
appeal), and to cause all those Permits expiring on or before the Closing Date
to be renewed prior to the Closing Date; and

(i) subject to Section 12.5 and Section 15.19, at the applicable Seller’s sole
cost and expense, cause the applicable existing Management Agreement and
Operating Lease to be terminated as of the Closing Date.

7.2 Title Insurance.

(a) Prior to the Effective Date, Sellers have ordered, and the Title Company has
delivered to Buyer, a Title Commitment with respect to each Hotel. In connection
therewith, Sellers agree to use commercially reasonable efforts to obtain from
the applicable parties an estoppel certificate with respect to those certain
documents set forth on Exhibit 7.2 attached hereto (each a “Required Estoppel”
and collectively, “Required Estoppels”). Buyer agrees to provide Sellers with
requested forms of estoppel certificates within four (4) Business Days following
the Effective Date. Buyer shall be deemed to have approved any Required Estoppel
so

 

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long as (i) it is dated no later than 30 days prior to the Closing Date, (ii) it
does not identify any information that is materially inconsistent with the
representations and warranties made by Seller in this Agreement or any of the
information posted in the electronic data room or delivered directly to Buyer,
and (ii) there are no defaults specified therein provided that in the event that
a default is specified therein then Sellers shall have the right, but not the
obligation, to attempt to cure any such default and Buyer shall be deemed to
approve the applicable Required Estoppel provided such default is cured within
fourteen (14) days of receipt of the applicable Required Estoppel (and the
Closing Date shall be extended as necessary in order to give Sellers the full
benefit of such fourteen (14) day period). The failure of Sellers to obtain any
Required Estoppel after exercising commercially reasonable efforts shall not be
deemed a default or breach of Sellers’ obligations under this Agreement, but is,
however, subject to Section 8.4.

(b) It is expressly agreed by the parties that (i) mortgages, deeds of trust,
construction, mechanics’ or materialmen’s liens, judgment liens, Tax liens
(other than liens for non-delinquent general real estate taxes or assessments),
or other liens or charges evidencing monetary encumbrances created by or through
Sellers, and (ii) any liens or other exceptions to title arising under or with
respect to the Perishable Agricultural Commodities Act or the Packer and
Stockyard Act and (iii) any other exceptions or encumbrances to title which are
created as a result of the intentional acts or omissions of any Seller or its
agents after the Effective Date without Buyer’s prior written consent, shall not
be Permitted Title Exceptions and that it shall be Sellers’ responsibility to
cause the Title Company to remove or insure over all such items in the Title
Policy issued at Closing (collectively, “Mandatory Cure Items”). Except as
expressly set forth in this Section 7.2 and Sellers’ obligations set forth in
Article X, Sellers have not agreed to take any additional actions with respect
to title matters and Buyer’s failure to deliver a Termination Notice by the Due
Diligence Deadline shall constitute Buyer’s election to accept as Permitted
Exceptions the exceptions to title with respect to which Sellers will not be
taking any action.

(c) If any supplement or revision to a Title Commitment and/or Survey issued
subsequent to the respective dates of the original applicable Title Commitment
and the Survey contains exceptions to title or defects not shown in the original
Title Commitment or the original Survey, as applicable, or previous endorsements
or supplements thereto, (i) such additional Title Objections, to the extent not
caused or consented to by Seller, would have an adverse effect on the ownership,
operation or financeability of the Property, and (ii) and such additional Title
Objections were not caused by Buyer or any person on behalf of Buyer, then Buyer
shall be entitled to object to such exceptions by written notice of objection to
Sellers on or before the third (3rd) Business Day after Buyer’s receipt of the
supplement showing such exceptions. Sellers shall have until five (5) Business
Days from the receipt of Buyer’s notice of each such additional Title Objections
that comply with the requirements of this Section 7.2(c) to remove or to remedy
the conditions or defects resulting in such exceptions and to procure a
supplement to the Title Commitment or the Survey, as applicable, removing such
Title Objection or to agree in writing to cure such Title Objection(s) prior to
Closing. If Sellers are either unable or unwilling to provide for the removal of
one or more of such additional Title Objections or does not agree to cure such
Title Objections (provided that Sellers cannot decline to cure any Mandatory
Cure Item), within such five (5) Business Day period, then, at Buyer’s option,
this Agreement may be Terminated upon written notice given by Buyer to Sellers
on or before the third (3rd) Business Day after such five (5) Business Day
period. Upon delivery of such termination notice, this

 

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Agreement shall automatically Terminate and the parties shall be released from
all further obligations under this Agreement (except for those which expressly
survive Termination of this Agreement), provided that the Deposit shall be
disbursed by Escrow Agent to Buyer; provided, further, if Buyer Terminates this
Agreement because Sellers are unwilling or unable to cure any Mandatory Cure
Item required to be removed or bonded over in accordance with this Agreement,
the same shall be treated as a default by Sellers and Buyer shall have the right
to avail itself of the remedies provided in, and subject to, Section 11.2. If
Buyer shall have the right to, but does not, Terminate this Agreement in the
manner set forth above in this Section 7.2(c), then Buyer shall be deemed to
have waived its objection to all Title Objections referred to in Buyer’s notice
of Title Objections relating to such supplement which shall not have been cured
or which Sellers elected not to cure prior to Closing, and this Agreement shall
remain in full force and effect. Anything in this Agreement to the contrary
notwithstanding, the Closing Date shall be extended to the fifth (5th) Business
Day after the later of (x) Sellers shall have cured Buyer’s Title Objection to
such supplement and shall have delivered to Buyer a supplement to the Title
Commitment or the Survey evidencing the same or (y) the expiration of Buyer’s
right to Terminate this Agreement because of the lack of such a cure.

(d) In addition, Buyer shall have the right to obtain from Title Company such
endorsements to the Title Policies and/or such additional liability protection
as Buyer may elect to obtain; provided, however, that Buyer’s ability to obtain
such title endorsements and/or such additional liability protection shall not be
a condition precedent to Buyer’s obligations hereunder and shall not extend or
delay Closing. Buyer shall be solely responsible for negotiating with Title
Company with respect to (unless obtained by Sellers to cure any Title Objection
in accordance with this Agreement), and paying for, such title endorsements
and/or such additional liability protection as may be requested by Buyer, if
any.

(e) With respect to that certain Construction, Operating and Reciprocal Easement
Agreement, dated August 25, 2006, between JG Gulf Coast Town Center and MHG of
Fort Myers, Florida #3, LLC (the “COREA”) which encumbers the Fort Myers Gulf
Coast Property, the Fort Myers Gulf Coast Seller shall use commercially
reasonable efforts to obtain an amendment to the COREA signed by both (i) JG
Gulf Coast Town Center LLC, an Ohio limited liability company, as holder of the
repurchase right thereunder, and (ii) the current owner of the Developer Parcel
(as defined in the COREA), as holder of other rights and obligations under the
COREA, clarifying that following the subdivision of the hotel parcel all rights
and obligations of the owners of the individual properties making up the Hotel
Parcel (as defined in the COREA) are several, and not joint and several,
including all rights and obligations related to the Repurchase Option (as
defined in the COREA) and sharing of expenses (the “COREA Amendment”); provided,
however, in no event shall delivery of the COREA Amendment be a condition to
Buyer’s obligations at Closing; provided, however, if the COREA Amendment is not
executed and received at Closing, then the Fort Myers Gulf Coast Seller shall
cause the owner of the neighboring parcel on which a Residence Inn is operating
(the “Residence Inn Owner”) to enter into a written agreement documenting the
sharing of costs under the COREA reflecting how such costs are currently being
split between the Fort Myers Gulf Coast Seller and the Residence Inn Owner, such
agreement to be in a form reasonably acceptable to Buyer and the Residence Inn
Owner (the “Shared Cost Agreement”).

 

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7.3 Survey. Sellers shall reasonably cooperate with Buyer, at Buyer’s sole cost,
to allow Buyer to order ALTA as-built surveys of the Hotels (or updates to
Sellers’ existing ALTA as-building survey of the Hotels) certified to Buyer and
the Title Company by a land surveyor or professional engineer (collectively, the
“Survey”).

7.4 Inspection; Due Diligence Period.

(a) Subject to the limitations, terms and conditions set forth herein, Buyer
shall have the right, subject to the rights of each applicable Franchisor and
Hotel Manager, tenants, hotel guests and invitees and applicable Laws, at its
own risk, and at any date or dates prior to Closing, to enter, or cause Buyer’s
Representatives to enter, upon the Property to perform inspections,
investigations, studies and tests of the Property, including, without
limitation, surveys, environmental studies, examination and tests of all
structural and mechanical systems within the improvements and all other matters
that Buyer wishes to consider at Buyer’s sole cost and expense (herein
collectively called the “Due Diligence Investigations”); provided that in no
event shall Buyer perform any physically-intrusive testing with respect to the
Property, including without limitation, any Phase II environmental testing, any
test borings, or any testing or sampling of surface or subsurface soils, surface
water, groundwater or any materials in or about the improvements on the Property
without the prior written consent of Sellers, which consent may be withheld in
Sellers’ sole discretion. Buyer shall notify Sellers (which notice may be by
e-mail notice to Adi Bhoopathy (adi.bhoopathy@nobleinvestment.com ) but will not
be deemed received until the next Business Day if transmitted after 5:00 p.m.
local Atlanta, Georgia time on a Business Day, provided that a confirmation copy
of such notice is not required to be delivered as otherwise required by
Section 15.4) at least one (1) Business Day in advance of any entry onto the
Property, however Buyer may request access to the Property on shorter notice
subject to Sellers’ consent. All entry onto the Property shall occur during
normal business hours. Neither Buyer nor any Buyer Representative shall
(i) communicate with, contact or otherwise solicit any Hotel Employee at the
Hotels; provided, however, Buyer (and each Buyer Representative) may communicate
with the each Hotel’s general manager, controller, chief engineer and director
of sales (each a “Designee” and collectively, “Designees”), or (ii) discuss the
sale of the Hotels or any terms of this Agreement with any Hotel Employee.
Sellers shall be entitled to have a representative(s) (“Sellers’
Representative”) present during any entry onto the Property by Buyer or Buyer’s
Representatives, including during any interviews with any Designee, and Sellers
shall cooperate with Buyer and Buyer’s Representatives in good faith in such
regard.

(b) Prior to Buyer’s or any of Buyer’s Representatives entry upon the Property,
Buyer shall deliver to Sellers evidence reasonably satisfactory to Sellers that
Buyer shall have obtained and shall maintain, or has caused Buyer’s
Representatives to obtain and to maintain, at no cost to Sellers, (i) a policy
of commercial general liability insurance covering each of the inspections,
investigations, studies and tests of the Property being performed by or on
behalf of it with a single limit of liability of not less than $1,000,000 per
occurrence, $2,000,000 aggregate; (ii) worker’s compensation insurance with
respect to the inspections, investigations, studies and tests of the Property
being performed by to the extent required by applicable Laws, and (iii) excess
(umbrella) liability insurance covering each of the inspections, investigations,
studies and tests of the Property being performed by or on behalf of it with
limits of not less than $2,000,000 per occurrence, in each case, naming Sellers
as additional insureds, with respect to the Property and any entry onto or
activities on or about the Property by Buyer and all of Buyer’s Representatives.

 

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(c) If, at any time prior to the Due Diligence Deadline, Buyer in its sole and
absolute discretion gives Sellers written notification (the “Termination
Notice”) that Buyer elects not to consummate the purchase of the Property in
accordance with the terms of this Agreement for any reason or no reason, this
Agreement shall Terminate, whereupon the Deposit shall be immediately returned
to Buyer and neither party shall have any further liability to the other under
this Agreement except as otherwise specifically provided herein. In the event
that the Termination Notice is not given by Buyer on or before the Due Diligence
Deadline, Buyer shall be deemed to have elected to proceed hereunder, and this
Agreement shall remain in full force and effect.

(d) In connection with the its Due Diligence Investigations, Buyer agrees (i) to
comply in all material respects with all applicable Laws, (ii) not to
unreasonably interfere with the operation of the Property or unreasonably
disturb or interfere in the use of the Property by Sellers, Franchisor, Hotel
Manager, any tenant or any hotel guest or invitee, and (iii) to promptly, at its
sole cost and expense, repair any physical damage to the Property caused by its
Due Diligence Investigations. In addition, and notwithstanding the foregoing
provisions of this Section 7.4, Buyer and Buyer’s Representatives (and any
others entering onto the Property for or at the request of Buyer) shall: (i) use
commercially reasonable efforts to conduct its Due Diligence Investigations so
as not to damage any part of the Property or any other property; (ii) use
commercially reasonable efforts to conduct its Due Diligence Investigations so
as not injure or otherwise cause bodily harm to Sellers, Franchisor, Hotel
Manager, or their respective agents, contractors and employees or any tenant or
guest or invitee (or any others entering onto the Property); (iii) promptly pay
when due the costs of all Due Diligence Investigations so that no liens attach
to the Property by reason of any of the Due Diligence Investigations;
(iv) except as expressly stated herein, not contact any of Sellers’ agents,
employees or other representatives, except for Designees and Sellers’
Representative, without first obtaining prior written consent of Sellers; and
(v) not contact any governmental official or representative regarding the
Property without first obtaining prior written consent of Sellers (which consent
may be made by e-mail notice from Adi Bhoopathy
(adi.bhoopathy@nobleinvestment.com) provided that a confirmation copy of such
notice is not required to be delivered as otherwise required by Section 15.4),
which consent shall not be unreasonably withheld, conditioned or delayed and may
be conditioned on Sellers’ presence and/or participation in connection with any
such contact, provided, however, that the foregoing shall not prohibit Buyer,
without the need for providing Sellers prior notice or obtaining Sellers’
consent, (A) from obtaining Phase I environmental and property condition review
preparations, or requesting customary zoning compliance or a ‘no violations’
letter, and (B) from obtaining and reviewing public records from applicable
governmental entities (including, building department and zoning department
records with respect to the Property), nor from requesting a copy of applicable
zoning code materials, life safety code materials and similar materials, but
Buyer shall not be permitted to communicate with any governmental official or
representative regarding any violations or adverse issues that Buyer may believe
exists without Seller’s prior written consent as provided above.

 

 

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(e) In the event the need arises to notify under applicable law any federal,
state or local public agencies of any environmental conditions at the Property,
as a result of the Due Diligence Investigations, Buyer and Sellers agree that
Sellers, and not Buyer or Buyer’s Representatives, shall make such disclosure as
Sellers deem appropriate, unless such disclosure is required by law to be made
by Buyer or Buyer’s Representatives, in which instance Buyer or such Buyer’s
Representatives shall notify Sellers in writing at least five (5) days prior to
making any such disclosure.

(f) Buyer shall, and does hereby agree to, indemnify, defend and hold Sellers
and each Seller Indemnitee, harmless from and against any and all Liabilities of
any kind or nature whatsoever, caused, directly or indirectly, by the actions of
Buyer or Buyer’s Representatives (and any others entering onto the Property for
or at the request of Buyer) taken or occurring in, on or about the Property in
connection with Buyer’s Due Diligence Investigations, including, without
limitation, (i) claims made by Franchisor, Hotel Manager, any tenant or any
hotel guest or invitee against any Seller for Buyer’s entry into any Hotel or
any interference with any use or damage to the premises or property of
Franchisor, Hotel Manager, any such tenant, any Hotel guest or other person in
connection with Buyer’s review of the Property, and (ii) Buyer’s obligations
pursuant to this Agreement; provided, however, such indemnity, defense and
obligation to hold the Sellers and the Seller Indemnitees harmless shall not
extend to protect Sellers and Seller Indemnitees from Liabilities resulting from
(A) the negligence or willful misconduct of any Seller or any Seller Indemnitee,
and (B) any pre-existing condition merely discovered by Buyer (e.g., latent
environmental contamination) except to the extent Buyer’s actions exacerbate
such pre-existing condition or disturb any such latent environmental
contamination. The provisions of this Section 7.4(f) shall survive any
termination of this Agreement.

(g) Within five (5) Business Days after the Effective Date, to the extent not
previously delivered by Sellers to Buyer, Sellers shall deliver to Buyer, or
post to the FTP site maintained by or on behalf of Sellers, the following items
(collectively, the “Submission Matters”) with respect to the Property; provided,
however, Sellers shall not be obligated to deliver any such Submission Matter to
the extent such Submission Matter is not actually in the possession or control
of Sellers or constitutes Confidential Materials: (i) a copy of the owner’s
policy of title insurance for each Hotel in effect as of the Effective Date;
(ii) a copy of the most recent survey for each Hotel; (ii) operating statements
for each Hotel for the period ending December 31, 2015 through the period ending
December 31, 2017 and for the calendar months of the current year through the
month preceding the Effective Date; (iii) copies of all current (if available)
real estate and personal property tax bills; (iv) copies of all Contracts,
Equipment Leases, Permits, and the Franchise Agreements; (v) copies of the
Environmental Reports; and (vi) any other information reasonably requested by
Buyer relating to the Property. In the event Sellers do not provide any such
Submission Matters, Buyer’s sole remedy shall be to terminate this Agreement on
or before the Due Diligence Deadline in accordance with Section 7.4(c).

(h) To the extent Buyer reviews, is given access to or otherwise obtains any
Hotel Guest Data and Information as part of the purchase of the Property, Buyer
shall at all times comply in all material respects with all applicable Laws
concerning (i) the privacy of such Hotel Guest Data and Information and the
sharing of such information and data with third parties (including, without
limitation, any restrictions with respect to Buyer’s or any third party’s
ability to use, transfer, store, sell, or share such information and data), and
(ii) the establishment of adequate security measures to protect such Hotel Guest
Data and Information. This Section 7.4(g) shall survive the Closing or earlier
termination of this Agreement.

 

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(i) No later than the Due Diligence Deadline, Buyer may provide to Sellers a
list of any Contracts or Equipment Leases that Buyer does not wish to assume at
Closing; provided that Buyer shall be permitted to reject only those Contracts
or Equipment Leases that by the applicable terms are either (i) terminable prior
to Closing without penalty or termination fees, or (ii) terminable upon thirty
(30) or fewer days’ notice without penalty or termination fees, or (iii) all
other Contracts or Equipment Leases that are terminable with the payment of a
penalty or termination fee, provided Buyer agrees to pay such penalty or
termination fee (the “Excluded Contracts”). Sellers shall (provided that Sellers
shall not be required to pay any penalties or termination fees) terminate such
Excluded Contracts effective on, before or within thirty (30) days following the
Closing Date and Buyer shall not assume any obligations thereunder. The
provisions of this Section 7.4(i) shall survive the Closing.

7.5 Exclusivity. From the Effective Date until the Closing or earlier
termination of this Agreement, Seller shall cause the officers, employees,
agents, representatives or any other person or entity acting at the direction of
Seller not to, directly or indirectly, solicit, pursue, negotiate or accept any
offers for (a) the Property or any portion thereof or interest therein, or
(b) any direct or indirect interest in Seller.

7.6 Estoppels. Sellers shall use commercially reasonable efforts to obtain and
deliver to Buyer any estoppel certificates Buyer may reasonably require in
connection with the Space Leases, Contracts or any Declaration of Covenants,
Conditions and Restrictions (or similar document) but excluding the Required
Estoppels (each individually a “CRE Estoppel”, and collectively the “CRE
Estoppels”); provided, however, Sellers shall not be obligated to incur any
material, out-of-pocket expense or fee to so obtain any CRE Estoppels other than
as may be required by the terms of the applicable agreement, and in no event
shall delivery of any CRE Estoppel (excluding the Required Estoppels) be a
condition to Buyer’s obligations at Closing.

7.7 Tax Clearance Certificates. Sellers shall reasonably cooperate with Buyer to
obtain by the Closing Date a certificate from each applicable state or local
governmental authority, to the extent available in the applicable jurisdiction,
stating that all sales taxes, occupancy taxes and other similar taxes due and
payable with respect to the Hotels have been paid through the date of the
issuance of such certificate, and if any such taxes have not been paid, the
amount due and payable as of the date of issuance of the certificate, which
amount shall be paid in full by Sellers as a condition to Closing (the “Tax
Clearance Certificates”). Sellers shall not be in default hereunder if Sellers
are unable to obtain the foregoing Tax Clearance Certificates or similar
documentation by Closing, so long as each Seller indemnifies Buyer for the
payment of all taxes covered by the clearance certificate which were due and
payable or accrued but not yet due or payable prior to the Closing Date and any
penalties, fines or fees that may be assessed thereafter with respect thereto
with respect to such Seller’s Property, until such time as the applicable Tax
Clearance Certificate is received and delivered to Buyer (and such indemnity
shall not be subject to the Floor Amount, Cap Amount or Survival Period).

 

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ARTICLE VIII

Conditions Precedent to Buyer’s Obligations at Closing

The obligations of Buyer to make payment of the Purchase Price and other sums
provided for herein and to consummate the Transaction contemplated hereby is
subject to satisfaction in full of each of the following conditions (“Buyer’s
Conditions”) on or before the Closing Date:

8.1 Representations and Warranties. All of Seller’s Warranties, subject to
Section 4.25 shall be true and correct in all material respects on and as of the
Closing Date, as if made on such date, except to the extent that they expressly
relate to an earlier date.

8.2 Covenants of Sellers. Sellers shall have performed and complied in all
material respects with all covenants and conditions required by this Agreement
to be performed or complied with on or prior to the Closing Date.

8.3 Title. Sellers shall have performed all actions required of Sellers pursuant
to Section 7.2, and the Title Company shall be unconditionally and irrevocably
prepared to issue, upon payment of the applicable premiums therefor, the Title
Policy.

8.4 Seller Deliveries. Each Seller shall have delivered all of the documents and
made all of the deliveries required from it pursuant to Article X hereof. In
addition, Sellers shall have delivered the Mandatory Estoppels, any CRE
Estoppels that Seller has received, any Required Estoppels that Seller has
received that are not Mandatory Estoppels, and any Seller Estoppels for Required
Estoppels that are not Mandatory Estoppels and were not received by Sellers. If
Sellers are unable to obtain a Required Estoppel that is not a Mandatory
Estoppel, the applicable Seller shall provide Buyer with a document certifying
to such Seller’s knowledge that the information that was in the form of Required
Estoppel that was not obtained is true and correct and that (i) no default
exists under the applicable agreement and no events which with the giving of
notice or passage of time would be a default, (ii) the applicable agreement has
not been amended except as described in therein, (iii) the applicable agreement
is in full force and effect and (iv) such other information as set forth in the
form of Required Estoppel that complies with the applicable agreement’s estoppel
requirements, and such certifications shall be treated as additional
representations and warranties under Article IV hereof, and delivery of such
certification(s) shall satisfy the Buyer’s Condition set forth in this sentence.

8.5 Termination of Management Agreement and Operating Lease. Subject to
Section 12.5 and Section 15.19, the Management Agreement between each Seller and
the applicable Hotel Manager and the Operating Lease between each Seller and the
applicable Operating Tenant shall be terminated without cost to Buyer.

8.6 Replacement of Board Members. If any Seller (or any Affiliate thereof) is
(or has appointed, employs or controls) any members of any board of directors or
officers or any other comparable positions of any association or other governing
body under any Permitted Exception, the applicable Seller shall have
(i) delivered a letter of resignation from any applicable director and officer
positions effective as of Closing and (ii) caused Buyer’s replacements to be
appointed or otherwise installed for such directors and/or officers.

 

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8.8 Existing Financing. Lender shall have (i) issued the Lender Approval and
Lender shall be ready, willing and able to close the Loan Assumption on loan
terms (without any changes to those set forth in the Existing Financing
Documents except as permitted by Section 3.4) and with such forms of Loan
Assumption Documents approved by Buyer in its discretion in accordance with
Section 3.4, and (ii) executed and delivered to Escrow Agent the Loan Assumption
Documents to be executed by Lender.

8.9 Failure of Condition. Buyer’s Conditions are solely for the benefit of Buyer
and may be waived only by Buyer. Any such waiver or waivers of any of Buyer’s
Conditions shall be in writing and shall be delivered to Sellers. Buyer shall
not act or fail to act for the purpose or with the intention of permitting or
causing any of Buyer’s Conditions to fail. If any of Buyer’s Conditions is not
satisfied or has not been so waived by Buyer on or prior to the Closing Date,
Buyer shall have the right to (i) Terminate this Agreement by written notice to
Sellers (and receive a return of the entire Deposit); (ii) if such failure is
caused by any Seller, extend the Closing Date for up to ten (10) days to allow
time for such Seller to cure or satisfy such condition (which shall be
automatically exercised with respect to the failure to deliver a Mandatory
Estoppel); or (iii) if such failure arises from any Seller’s breach of this
Agreement, avail itself of any remedies provided in Section 11.2.
Notwithstanding the foregoing, nothing in this Section 8.6 shall effect
Sellers’s right to extend the Closing Date in accordance with Section 4.25
hereof.

ARTICLE IX

Conditions Precedent to Sellers’ Obligations at Closing

The obligation of Sellers to consummate the Transaction and deliver the
documents and instruments required hereunder shall be subject to satisfaction in
full of the following conditions (“Sellers’ Conditions”) on or before the
Closing Date:

9.1 Representations and Warranties. Each of Buyer’s representations and
warranties shall be true and complete in all material respects as if made on and
as of the Closing Date, as if made on and as of such date except to the extent
that they expressly related to an earlier date.

9.2 Buyer Deliveries. Buyer shall have delivered all of the documents and made
all of the deliveries required from it pursuant to Article X hereof.

9.3 Covenants of Buyer. Buyer shall have performed and complied in all material
respects with the covenants and conditions required by this Agreement to be
performed or complied with on or prior to the Closing Date.

9.4 Franchise Agreement Releases. At Buyer’s expense (including, without
limitation, any application fees and any costs incurred in connection with the
satisfaction and/or compliance with any property improvement plan required by
Franchisor, except as expressly set forth herein), Buyer shall have entered into
a New Franchise Agreement with Franchisor for each of the Hotels; provided,
however, this condition shall nevertheless be deemed waived by Sellers provided
that at Closing Buyer complies with its obligations related to not obtaining a
New Franchise Agreements as set forth in Section 12.5.

 

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9.5 Loan Assumption. Lender shall have issued the Lender Approval subject to the
following terms: (i) applicable Seller and any guarantors shall have been
unconditionally released from all liability under the mortgage, deed of trust
and all financing instruments with respect to the applicable Property from and
after Closing in such form and to such an extent that Lender customarily
provides and (ii) each applicable Seller shall have approved, in its reasonable
discretion, the form of the Loan Assumption Documents to the extent they affect
Seller.

9.6 Failure of Condition. Sellers’ Conditions are solely for the benefit of
Sellers and may be waived only by Sellers. Any such waiver or waivers of any of
Sellers’ Conditions shall be in writing and shall be delivered to Buyer. Sellers
shall not act or fail to act for the purpose or with the intention of permitting
or causing any of Sellers’ Conditions to fail. If any of Sellers’ Conditions is
not satisfied or has not been so waived by notice to Buyer on or prior to the
Closing Date, Sellers shall have the right to (i) Terminate this Agreement
without liability to Buyer by written notice to Buyer describing the condition
or conditions that have not been satisfied or waived (whereupon Escrow Agent
shall return the Deposit to Buyer, subject to Section 11.1), or (ii) if such
failure arises from Buyer’s failure to consummate the Transaction described in
this Agreement, avail itself of any remedies provided in Section 11.1.

ARTICLE X

Closing Deliveries

Prior to Closing, the parties shall make the following deliveries into escrow
with Escrow Agent subject to separate escrow instruction letters between such
parties and Escrow Agent, and, at the Closing, the parties shall authorize and
instruct Escrow Agent to release and record all such deliveries to the
appropriate parties:

10.1 Deed. Each Seller shall deliver a special or limited warranty deed
substantially in the form set forth on Exhibit C attached hereto (the “Deed”),
dated as of the Closing Date, conveying to Buyer fee simple interest in its Real
Property, subject only to the Permitted Title Exceptions.

10.2 Bill of Sale. Each Seller and Buyer shall each deliver two (2) duly
executed counterparts (one for each party) of a bill of sale substantially in
the form set forth on Exhibit D attached hereto, dated as of the Closing Date,
conveying to Buyer such Seller’s Personal Property.

10.3 Assignment and Assumption Agreement. Each Seller and Buyer shall each
deliver two (2) duly executed counterparts (one for each party) of an assignment
and assumption agreement substantially in the form set forth on Exhibit E
attached hereto, dated as of the Closing Date, assigning, all of such Seller’s
right, title and interest in and to the applicable Contracts, Equipment Leases,
Space Leases, Bookings and Intangible Hotel Assets. In addition, at Buyer’s
request, the applicable Seller and Buyer shall each deliver two (2) duly
executed counterparts (one for each party) of an assignment and assumption
agreement in a form reasonably acceptable to Sellers and Buyer, dated as of the
Closing Date, assigning, all of such Seller’s right, title and interest in and
to any parking agreement, parking lease or similar arrangement or any memorandum
or other Permitted Exception which Buyer may identify, which assignment and
assumption shall be in recordable form if required by Buyer. In addition,

 

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at Buyer’s request, the Boulder Seller will assign to Buyer all of its rights,
but not its obligations, under that certain Purchase and Sale Agreement by and
between 3001 Pearl, LLC and HP Boulder, L.L.C. dated as of July 26, 2013 (as
amended and assigned) in accordance with the terms thereof.

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

10.5 Possession; Books and Records, Keys. Each Seller shall deliver possession
of its Property to Buyer, together with all books and records in such Seller’s
possession other than Excluded Property, in accordance with and subject to any
privacy Laws or regulations, necessary or desirable for the operation of such
Seller’s Hotel and all keys, including, without limitation, keys for all
security systems, rooms and offices.

10.6 Purchase Price. Buyer shall deliver the balance of the Purchase Price
payable in the manner provided for in this Agreement.

10.7 Title Affidavit. Each Seller shall deliver an affidavit to the Title
Company in the form attached hereto as Exhibit F relating to certain title
matters. In addition, the applicable Seller also agrees to take the actions
and/or make the deliveries as necessary to satisfy the requirements in Schedule
B-1 or Schedule C, as applicable, of the applicable Title Commitments identified
in Exhibit 10.7 attached hereto.

10.8 Seller Authority. Each Seller shall deliver evidence of organization,
existence and authority of such Seller to consummate the Transaction, and the
authority of any person executing documents on behalf of such entity reasonably
satisfactory to the Title Company.

10.9 Seller’s Certificate. Sellers shall deliver a certificate executed by
Sellers stating that each of the Seller’s Warranties are, as of the Closing
Date, true, complete and correct in all material respects, subject to such
qualifications as disclosed therein and the limitations contained in this
Agreement.

10.10 Buyer’s Certificate. Buyer shall deliver a certificate executed by Buyer
stating that each of the representations and warranties of Buyer set forth in
this Agreement are, as of the Closing Date, true, complete and correct in all
material respects.

10.11 Buyer Authority. Buyer shall deliver evidence of organization, existence
and authority of Buyer to consummate the Transaction, and the authority of any
person executing documents on behalf of such entity reasonably satisfactory to
the Title Company.

10.12 Vehicle Bills of Sale. Each Seller shall deliver individual Bills of Sale,
certificates, registrations, and transfer documents as are appropriate and as
may be required by applicable Law in connection with the transfer of any
vehicles which are a part of the Property and owned by such Seller, together
with the original certificates of title with respect to the same.

 

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10.13 Closing Statement. Buyer and Sellers shall deliver the closing statement
executed by Sellers and Buyer setting forth the prorations and adjustments to
the Purchase Price to be made as set forth herein.

10.14 Loan Assumption Documents. Buyer and Sellers shall deliver the Loan
Assumption Documents to be executed by Buyer, Sellers or their Affiliates.

10.15 Other Documents. Sellers and Buyer shall deliver such other documents,
instruments and affidavits as may be reasonably requested by Sellers, Buyer
and/or the Title Company to effectuate the Transaction contemplated by this
Agreement, including, without limitation, any and all transfer tax forms
required by the jurisdiction in which the Hotel is located.

10.16 Ohio Documents. With respect to each Parcel located in the State of Ohio,
a water and sewer charges report, current as of Closing, showing no unpaid
amounts.

10.17 Shared Cost Agreement. If required in accordance with Section 7.2(e), the
Fort Myers Gulf Coast Seller shall deliver the Shared Cost Agreement as executed
by the Fort Myers Gulf Coast Seller and the Residence Inn Owner.

ARTICLE XI

Default

11.1 Buyer’s Default. If Buyer defaults in performing its obligations under this
Agreement to proceed to Closing when all of the Buyer Conditions have been
satisfied or waived in writing by Buyer, Sellers, as their sole and exclusive
remedy for any such default, shall be entitled to Terminate this Agreement by
giving Buyer written notice to such effect, and receive the Deposit as
liquidated damages for Buyer’s default and enforce any obligation of Buyer that,
pursuant to the terms of this Agreement, specifically survives the Termination
of this Agreement. THE PARTIES AGREE THAT IT WOULD BE IMPRACTICABLE AND
EXTREMELY DIFFICULT TO ASCERTAIN THE ACTUAL DAMAGES SUFFERED BY SELLERS AS A
RESULT OF BUYER’S FAILURE TO COMPLETE THE PURCHASE OF THE PROPERTY PURSUANT TO
THIS AGREEMENT, AND THAT UNDER THE CIRCUMSTANCES EXISTING AS OF THE EFFECTIVE
DATE, THE LIQUIDATED DAMAGES PROVIDED FOR IN THIS SECTION REPRESENT A REASONABLE
ESTIMATE OF THE DAMAGES WHICH SELLERS WILL INCUR AS A RESULT OF SUCH FAILURE.
THE PARTIES ACKNOWLEDGE THAT THE PAYMENT OF SUCH LIQUIDATED DAMAGES IS NOT
INTENDED AS A FORFEITURE OR PENALTY, BUT IS INTENDED TO CONSTITUTE LIQUIDATED
DAMAGES TO SELLERS.

11.2 Seller’s Default. If any Seller fails to convey its Property to Buyer in
accordance with the terms of this Agreement, or if any Seller otherwise fails to
perform, in any material respect its obligations as and when required hereunder
(subject to a five Business Day cure period for any interim failure prior to the
Closing Date, or if applicable such lesser period as remains prior to the
Closing Date), then Buyer shall have the right to exercise any one of the
following as Buyer’s sole and exclusive remedy:

 

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(a) proceed to Closing without any reduction in or set-off against the Purchase
Price, in which case Buyer shall be deemed to have waived such Seller’s default
in performing its obligations and covenants under this Agreement or such
Seller’s incorrect representations and warranties; or

(b) Terminate this Agreement by giving Sellers written notice of such election
prior to the consummation of the Closing whereupon (i) Escrow Agent shall
promptly return the Deposit to Buyer, (ii) Sellers shall reimburse Buyer, upon
receipt by Sellers of reasonable evidence thereof, for its out-of-pocket
third-party expenses related to the Transaction contemplated by this Agreement
(not to exceed $500,000 in the aggregate), (iii) no party to this Agreement
shall thereafter have any further rights or liabilities under this Agreement,
except, however, that the parties shall remain obligated with respect to the
provisions herein which specifically survive Termination; or

(c) seek specific performance on the part of Sellers under the terms of this
Agreement; provided such action seeking specific performance is initiated in a
court of competent jurisdiction within sixty (60) days after the scheduled
Closing Date. Failure to file a suit for specific performance within such sixty
(60) day period shall be deemed a waiver of such remedy as well as a waiver by
it of any right it may have to file or record a notice of lis pendens or notice
of pendency of action or similar notice against any portion of the Property.

ARTICLE XII

Limitation on Seller’s Liability, Liquor License; As-Is; Franchise

12.1 Survival; Maximum Aggregate Liability. Except as otherwise expressly
provided herein or related to any claims for indemnification, and except for
claims of Sellers’ fraud, the respective representations, warranties,
obligations, covenants and agreements of Sellers and Buyer contained herein
shall survive the Closing for a period of two hundred ten (210) days (the
“Survival Period”). Sellers shall only be liable to Buyer hereunder for any
untruth, inaccuracy or incorrectness of a Seller’s Warranty with respect to
which (i) Sellers receive a written notice of a claim from Buyer on or before
the expiration of the Survival Period, and (ii) Buyer has commenced an action in
a court of competent jurisdiction on or before the date that is sixty (60) days
following the expiration of the Survival Period. Notwithstanding any provision
to the contrary contained in this Agreement, (i) the maximum aggregate liability
of the Sellers, and the maximum aggregate amount that may be awarded to and
collected at any time by Buyer, in connection with the Transaction, the Property
and any Liabilities attributable to the Property, under this Agreement or
otherwise in connection with the Property, including in connection with the
breach of any covenant of Sellers contained in this Agreement (other than any
such covenant that has been waived by Buyer, including pursuant to Section 11.2
hereof, for which Sellers shall have no further liability to Buyer) or of any of
Seller’s Warranties shall not exceed two percent (2%) of the Purchase Price (the
“Cap Amount”), and (ii) no claim by Buyer may be made, and Sellers shall not be
liable for any judgment in any action based upon any claim, in connection with
the Transaction, the Property and any Liabilities attributable to the Property,
under this Agreement, including in connection with the breach of any covenant of
Sellers contained in this Agreement (other than any such covenant that has been
waived by Buyer, including pursuant to Section 11.2 hereof, for which Sellers
shall have no further liability to Buyer), unless and until such claim, when
taken together with all other prior or

 

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contemporaneous claims, is for an aggregate amount in excess of $200,000 (the
“Floor Amount”), in which event Sellers shall be responsible for such amounts
from the first dollar of loss; provided that claims made pursuant to
Section 14.11 (Prorations), Section 15.11 (Broker Indemnity), or as a result of
any Seller’s fraud shall not be subject to the Floor Amount or Cap Amount.
Except as expressly set forth in the Joinder attached hereto, Buyer shall not
have any recourse to any member, partner, shareholder, stockholder, manager,
representative, affiliate, officer, director, beneficial owner, employee,
advisor or agent of any Seller for any liabilities of any Seller in connection
with the Transaction (including the Retained Liabilities), the Property and any
Liabilities attributable to the Property, under this Agreement or otherwise in
connection with the Property or the Transaction. Sellers shall not have any
recourse to any member, partner, shareholder, stockholder, manager,
representative, affiliate, officer, director, beneficial owner, employee,
advisor or agent of Buyer for any liabilities of any Buyer in connection with
the Transaction (including the Assumed Liabilities), the Property and any
Liabilities attributable to the Property, under this Agreement or otherwise in
connection with the Property or the Transaction. Subject to Section 11.1 hereof,
each party hereto hereby waives its rights to recover from the other party
indirect, punitive, exemplary, and speculative damages. This Section 12.1 shall
survive Closing or the termination of this Agreement.

12.2 Liquor License. Sellers shall reasonably cooperate with Buyer or Buyer’s
designee (the “New Permittee”) in connection with its application for a new
liquor license or for the transfer of the existing liquor license, as
applicable, for each Hotel (the “New Liquor Permits”) relating to the sale and
on-premises consumption of liquor and other alcoholic beverages to replace the
existing liquor licenses. Upon Buyer’s request, Sellers agree to provide a copy
of Sellers’ existing licenses for each Hotel as well as copies of any local
and/or state application materials previously filed by Sellers in connection
with same, to the extent in Sellers’ possession or control. Sellers shall
provide all information or documentation reasonably requested by Buyer in
connection with its liquor license applications for each Hotel, and shall
execute all documentation required by the applicable local and state alcoholic
beverage licensing authorities in connection with same. If upon Closing the
existing liquor license for any Hotel has not been transferred to New Permittee
or a new liquor license has not been issued New Permittee, then, subject to
applicable Laws, the applicable Seller shall (not to include by such Seller the
expenditure of any money or guaranty of any obligation) cause the holder of the
existing liquor license for such Hotel (the “Existing Permittee”) to enter into
an interim liquor agreement (an “Interim Liquor Agreement”) or any other such
license agreements, management agreements and/or other interim agreements, with
New Permittee as may be reasonably necessary for the continuation of the sale
and consumption of alcoholic beverages at such Hotel after the Closing and
before such time as New Permittee obtains the New Liquor Permits; provided,
however, that (i) Buyer shall indemnify, defend and hold the applicable Seller
and Existing Permittee harmless from any liability, damages, costs, expenses or
claims encountered in connection with such operations during said period of
time, and Buyer shall procure and pay for dram shop liability insurance (in
amounts and with deductibles as previously maintained by the applicable Seller)
naming Buyer and the applicable Seller and Existing Permittee as insureds
thereunder, and (ii) the obligation of such Seller to cooperate and keep open
the liquor facilities of such Hotel shall terminate ninety (90) days after the
Closing Date, or earlier, if Buyer obtains the New Liquor Permits at an earlier
date; provided, however, Buyer shall have the right to extend such 90-day term
for an additional sixty (60) days provided New Permittee has filed and

 

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is diligently pursuing its license applications for the New Liquor Permits. At
such time after Closing as the New Liquor Permits are obtained, Existing
Permittee or applicable Seller, as applicable, will convey, at no additional
costs, all alcoholic beverages with respect to such Hotel to New Permittee by a
conveyance document in form reasonably acceptable to the applicable Seller and
Buyer and in accordance with all applicable Laws. The parties do hereby
specifically acknowledge and agree that to the extent that, prior to Closing
(i) the transfer of a liquor license to Buyer or its designee has not been
approved, or (ii) a New Liquor Permit (temporary or permanent) has not been
issued to Buyer or its designee with respect to any Hotel, even if an Interim
Liquor Agreement is not permitted by applicable Laws, such failure shall not
constitute a failure of a Buyer’s condition precedent to close the Transaction
contemplated by this Agreement, shall not affect in any manner whatsoever the
Closing, and the Closing shall proceed without any delay or interruption
whatsoever. Buyer specifically acknowledges and agrees that should its
application for the transfer of a liquor license or issuance of a New Liquor
Permit be denied for any reason, such denial shall not affect in any manner
whatsoever the terms and provisions of this Agreement and the Closing shall take
place without delay or interruption. This Section 12.2 shall survive the
Closing.

12.3 PROPERTY SOLD “AS IS”. BUYER ACKNOWLEDGES AND AGREES THAT (A) EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN ANY CLOSING DOCUMENTS EXECUTED AND
DELIVERED BY SELLERS TO BUYER AT CLOSING, THE PURCHASE OF THE PROPERTY SHALL BE
ON AN “AS IS”, “WHERE IS”, “WITH ALL FAULTS” BASIS, SUBJECT TO ORDINARY WEAR AND
TEAR FROM THE EFFECTIVE DATE UNTIL CLOSING, AND (B) EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT OR IN ANY CLOSING DOCUMENTS EXECUTED AND DELIVERED BY
SELLERS TO BUYER AT CLOSING, SELLERS HAVE NO OBLIGATION TO REPAIR ANY DAMAGE TO
OR DEFECT IN THE PROPERTY, REPLACE ANY OF THE PROPERTY OR OTHERWISE REMEDY ANY
MATTER AFFECTING THE CONDITION OF THE PROPERTY.

12.4 LIMITATION ON REPRESENTATIONS AND WARRANTIES.

(A) BUYER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT OR IN ANY CLOSING DOCUMENTS EXECUTED AND DELIVERED BY SELLERS TO BUYER
AT CLOSING, NONE OF SELLERS, HOTEL MANAGER OR ANY OF THEIR AFFILIATES, NOR ANY
OF THEIR RESPECTIVE SHAREHOLDERS, MEMBERS, PARTNERS, TRUSTEES, BENEFICIARIES,
DIRECTORS, OFFICERS, MANAGERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, CONTRACTORS,
CONSULTANTS, AGENTS OR REPRESENTATIVES, NOR ANY PERSON PURPORTING TO REPRESENT
ANY OF THE FOREGOING, HAVE MADE ANY REPRESENTATION, WARRANTY, GUARANTY, PROMISE,
PROJECTION OR PREDICTION WHATSOEVER WITH RESPECT TO THE PROPERTY OR THE BUSINESS
OF THE HOTELS, WRITTEN OR ORAL, EXPRESS OR IMPLIED, ARISING BY OPERATION OF LAW
OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, OR ANY REPRESENTATION OR WARRANTY AS TO
(i) THE CONDITION, SAFETY, QUANTITY, QUALITY, USE, OCCUPANCY OR OPERATION OF THE
PROPERTY, (ii) THE PAST, PRESENT OR FUTURE REVENUES OR EXPENSES WITH RESPECT TO

 

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THE PROPERTY OR THE BUSINESS OF THE HOTELS, (iii) THE COMPLIANCE OF THE PROPERTY
OR THE BUSINESS OF THE HOTELS WITH ANY ZONING REQUIREMENTS, BUILDING CODES OR
OTHER APPLICABLE LAW, INCLUDING, WITHOUT LIMITATION, THE AMERICANS WITH
DISABILITIES ACT OF 1990, (iv) THE ACCURACY OF ANY ENVIRONMENTAL REPORTS,
FINANCIAL AUDITS OF THE PROPERTY OR OTHER DATA OR INFORMATION SET FORTH IN ANY
DUE DILIGENCE MATERIALS PROVIDED BY SELLERS TO BUYER, OR (v) ANY OTHER MATTER
RELATING TO SELLERS, THE PROPERTY OR THE BUSINESS OF THE HOTELS.

(B) BUYER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT OR IN ANY CLOSING DOCUMENTS EXECUTED AND DELIVERED BY SELLERS TO BUYER
AT CLOSING:

(i) BUYER SHALL HAVE HAD THE OPPORTUNITY TO CONDUCT ALL DUE DILIGENCE
INSPECTIONS OF THE PROPERTY AND THE BUSINESS OF THE HOTELS AS OF THE DUE
DILIGENCE DEADLINE, INCLUDING OBTAINING AND REVIEWING ALL INFORMATION WHICH IT
DEEMS NECESSARY TO MAKE AN INFORMED DECISION AS TO WHETHER IT SHOULD PROCEED
WITH THE PURCHASE OF THE PROPERTY AND THE BUSINESS OF THE HOTELS;

(ii) BUYER WILL BE RELYING ONLY ON ITS DUE DILIGENCE INSPECTIONS OF THE PROPERTY
AND THE BUSINESS OF THE HOTELS, ITS REVIEW OF ANY DUE DILIGENCE MATERIALS AND
SELLER’S WARRANTIES AND ANY REPRESENTATIONS AND WARRANTIES OF SELLERS MADE IN
ANY CLOSING DOCUMENTS EXECUTED AND DELIVERED BY SELLERS TO BUYER AT CLOSING; AND

(iv) BUYER IS NOT RELYING ON ANY STATEMENT MADE OR INFORMATION PROVIDED TO BUYER
BY SELLERS (EXCEPT FOR SELLER’S WARRANTIES OR IN ANY CLOSING DOCUMENTS SUBMITTED
BY SELLERS TO BUYER), HOTEL MANAGER OR ANY OF THEIR AFFILIATES, OR ANY OF THEIR
RESPECTIVE SHAREHOLDERS, MEMBERS, PARTNERS, TRUSTEES, BENEFICIARIES, DIRECTORS,
MANAGERS, OFFICERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, CONTRACTORS, CONSULTANTS,
AGENTS OR REPRESENTATIVES, OR ANY PERSON PURPORTING TO REPRESENT ANY OF THE
FOREGOING.

(v) By accepting the Deed and closing the Transaction, except as expressly set
forth to the contrary in Seller’s Warranties and subject to the Retained
Liabilities and the other provisions of this Agreement that expressly survive
the Closing, Buyer (for itself and its Affiliates, and each of their respective
shareholders, members, partners, trustees, beneficiaries, directors, officers
and employees, and the successors, permitted assigns, legal

 

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representatives, heirs and devisees of each of the foregoing (the “Buyer
Indemnitees”)), shall thereby, and does hereby, forever release and discharge
Sellers, Hotel Manager and their respective Affiliates, and each of their
respective shareholders, members, partners, trustees, beneficiaries, directors,
officers, employees and agents, and the successors, permitted assigns, legal
representatives, heirs and devisees of each of the foregoing (the “Seller
Indemnitees”) from and waive any and all Liabilities against each of the Seller
Indemnitees for, attributable to, or in connection with the Property and the
Transaction, whether known or unknown, direct or indirect, arising or accruing
before, on or after Closing and whether attributable to events or circumstances
that arise or occur before, on or after Closing, including the following:
(A) any and all statements or opinions heretofore or hereafter made, or
information furnished with respect to the Property to any Buyer’s
Representatives, whether by any of the Seller Indemnitees or any of their
respective Affiliates, employees, officers, directors, members, partners, agents
or direct or indirect owners; (ii) any and all Liabilities with respect to the
structural, physical, or environmental condition of the Property, including all
Environmental Liabilities; and (iii) any implied or statutory warranties or
guaranties of fitness, merchantability or any other statutory or implied
warranty or guaranty of any kind or nature regarding or relating to any portion
of the Property; provided, however, this release shall not apply to claims
arising out of Sellers’ fraud nor prohibit Buyer from raising as a defense in
any proceeding involving, or in otherwise responding to, any third party claim
that such circumstance resulting in the claim existed prior to Buyer’s ownership
of the Property. This release includes claims of which Buyer is presently
unaware or which Buyer does not presently suspect to exist which, if known to
Buyer, would materially affect Buyer’s release of Seller Indemnitees. Buyer
specifically waives the provision of any statute or principal of law, which
provides otherwise. In this connection and to the extent permitted by Law, Buyer
agrees, represents and warrants that Buyer realizes and acknowledges that
factual matters now unknown to Buyer may have given or may hereafter give rise
to Liabilities which are presently unknown, unanticipated and unsuspected, and
Buyer further agrees, represents and warrants that the waivers and releases
herein have been negotiated and agreed upon in light of that realization and
that Buyer nevertheless hereby intends to release, discharge and acquit Seller
Indemnitees from an such unknown Liabilities, except as to Seller’s Warranties
and subject to the Retained Liabilities and the other provisions of this
Agreement that expressly survive the Closing.

(c) By accepting the Deeds and closing the Transaction, Buyer shall thereby and
thereafter assume and take responsibility and liability for the following:
(i) any and all Liabilities attributable to the Property to the extent that such
Liabilities first arise or accrue on or after Closing, including, without
limitation under the Bookings, Contracts, Equipment Leases, and Space Leases,
(ii) any and all Liabilities for third party tort claims that occur on or after
the Closing; (iii) any Employee Liabilities arising out of events occurring, on
or after the Closing Date (including, without limitation, any WARN Act claim
brought by or on behalf of any Hotel Employee or Hotel Employees, other than a
claim resulting from misinformation or lack of information from Sellers on the
Hotel Employees); and (iv) any and all Liabilities with respect to

 

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which Buyer receives a credit at Closing (collectively, the “ Assumed
Liabilities”). Buyer acknowledges and agrees that the Liabilities to be assumed
by Buyer pursuant to each of the foregoing clauses are intended to be
independent of one another, so Buyer shall assume Liabilities described in each
of the clauses even though some of those Liabilities may be read to be excluded
by another clause. Buyer hereby agrees to indemnify, defend and hold harmless
Seller Indemnitees from and against any and all of the Assumed Liabilities. Each
Seller agrees to indemnify, defend and hold harmless Buyer from and against any
and all of the Retained Liabilities with respect to such Seller’s Property;
provided, except as expressly set forth in Section 12.1 and Section 7.8, the
liability of Sellers pursuant to the foregoing indemnity shall in the aggregate
be subject to the Survival Period, Cap Amount and the Floor Amount.

(d) The terms and provisions of this Section 12.4 shall survive the Closing.

12.5 New Franchise Agreement.

(a) It is the parties’ intention that Buyer will continue to operate each Hotel
under the same brand as such Hotel is currently operated as of the Effective
Date, and this Agreement has been negotiated and entered into based upon that
expectation. Buyer shall within ten (10) Business Days of the Effective Date
make application to the applicable Franchisor for such Franchisor’s approval of
the re-issuance of the applicable Franchise Agreement to Buyer (such reissued
Franchise Agreement or new franchise agreement, the “New Franchise Agreement”
and collectively, the “New Franchise Agreements”); provided, however, Sellers
acknowledge that Buyer may be required to submit additional documentation and/or
satisfy additional requirements as requested by the Franchisor in connection
with such applications. Buyer will use its commercial reasonable efforts to
obtain the New Franchise Agreements and will at all times keep Sellers
reasonably apprised of its efforts to obtain the New Franchise Agreements and
respond promptly to all reasonable inquiries of Sellers in this regard,
supplying such information as Sellers may reasonably request. Sellers, at
Buyer’s expense, agrees to reasonably cooperate (but without cost or expense to
Sellers) with Buyer in connection with Buyer’s obtaining the New Franchise
Agreements. In connection with the New Franchise Agreements, Buyer hereby agrees
to diligently and timely execute all documents and pay all application and any
and all transfer or other fees required by Franchisor in connection with
obtaining the New Franchise Agreements for the continued operation of each Hotel
pursuant to a New Franchise Agreement upon terms and conditions reasonably
satisfactory to Buyer based on Buyer’s Affiliates’ prior dealings, if any, with
Franchisor (including, without limitation, a property improvement plan with
which Buyer will agree to comply), which may be more or less favorable to Buyer
than the Franchise Agreement currently in force and effect in respect of such
Hotel.

(b) Provided that Buyer complies with this Section 12.5 and subject to
Section 9.4, Buyer will not be in default of this Agreement for its (or its
Affiliate’s) inability and associated failure to enter into any New Franchise
Agreement, provided that, at Closing, Buyer shall pay to Franchisor all costs,
fees or liquidated damages in connection with the termination of such Franchise
Agreement that are payable under such Franchise Agreement, and Buyer will allow
the applicable Seller and its Affiliates reasonable access to the applicable
Hotel after the Closing in order for such Seller to fulfill all of its
de-identification obligations under such

 

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terminated Franchise Agreement, all at Buyer’s sole cost and expense (the “De-
Identification Obligations”). Buyer will be responsible for all expenses
reasonably incurred by any Seller in connection with such De-Identification
Obligations (if any). Buyer on behalf of it and its successors and assigns
hereby indemnifies, holds harmless and releases the Sellers and their Affiliates
from and against all Liabilities arising out of or in any way related to
(i) Buyer’s failure to pay all costs, fees or liquidated damages in connection
with the termination of any Franchise Agreement that are payable under such
Franchise Agreement at Closing (if applicable), (ii) if Buyer continues to
operate such Hotel under the existing brand from and after the Closing, Buyer’s
failure to enter into the applicable New Franchise Agreement or obtain any
consent required pursuant to the terms of any existing Franchise Agreement prior
to operating such Hotel under Franchisor’s brand, or (iii) the failure of Buyer
to comply with all De-Identification Obligations in a timely manner as required
by the applicable existing Franchise Agreement in the event that Buyer does not
enter into a New Franchise Agreement for operation of such Hotel under
Franchisor’s brand. The terms and provisions of this Section 12.5 shall survive
the Closing or the earlier termination of this Agreement.

12.6 Hotel Employees.

(a) Sellers shall cause Hotel Manager to terminate all Hotel Employees and Buyer
shall, or cause its manager to, extend offers to hire effective at and upon
Closing, a sufficient number of Hotel Employees (“Rehired Employees”) at each
Hotel and on such terms so that no Seller or Hotel Manager shall be required to
give any layoff, closing or other termination notices or otherwise incur any
liability pursuant to the provisions of the WARN Act or any other similar Laws
or policies, including any liability for accrued vacation, paid time off or
severance. Buyer shall not terminate or cause (or permit its hotel manager to
terminate) any Rehired Employees other than for cause for at least ninety
(90) days after the Closing Date if any such termination would reasonably be
expected to result in liability to any Seller pursuant to the WARN Act or any
other similar Laws. Sellers shall provide sufficient information to Buyer to
allow Buyer (or its manager) to make an offer of employment to such Hotel
Employees pursuant to this Section 12.6.

(b) Buyer shall indemnify, defend and hold Sellers and the Seller Indemnitees
harmless from and against any and all Liabilities arising in connection with any
failure by Buyer to comply with the terms of this Section 12.6.

(c) Sellers and Buyer acknowledge and agree that nothing in this Agreement is
intended to create a “joint employer” relationship between them with respect to
any Hotel Employee nor to make any Hotel Employee a third party beneficiary of
this Agreement.

(d) The provisions of this Section 12.6 shall survive the Closing.

 

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ARTICLE XIII

Casualty or Condemnation

13.1 Notice to Buyer. If, prior to Closing, all of any Hotel, or any portion of
or any interest in any Hotel shall be destroyed, damaged, subjected to a threat
of condemnation, or shall become the subject of any proceedings, judicial,
administrative, or otherwise, with respect to a taking by eminent domain or
condemnation, the applicable Seller shall promptly notify Buyer thereof;
provided, however, that no Seller shall be deemed to be in default under this
Section 13.1 for failure to report minor incidents causing insignificant damage
subject to Sellers obligations under Section 7.1.

13.2 Risk. If, prior to Closing, (i) condemnation proceedings are commenced
against all or any material portion of any Hotel and any Property located
thereat, or (ii) any Hotel and any Property located thereat is damaged by fire
or other casualty, and the value of such Hotel and Property, and any portion
thereof or interest therein destroyed, damaged, subjected to a threat of
condemnation, or the subject of any proceedings, judicial, administrative, or
otherwise, with respect to a taking by eminent domain or condemnation is in
excess of seven and one-half percent (7.5%) of the Purchase Price allocable to
such Hotel and Property as set forth on Exhibit 3.2 attached hereto, or in
connection with a condemnation, such taking will have a permanent materially
adverse effect on the operation of such Hotel as conducted prior to such
condemnation, then Buyer, at its option, may within ten (10) Business Days after
receipt of such notice from Sellers elect to (1) exclude such Hotel and the
related Property from the sale contemplated by this Agreement, in which case
this Agreement shall continue in full force except that the applicable Hotel and
Property shall no longer be deemed to be a part of the Property and the Purchase
Price shall be reduced by the amount of the Purchase Price allocated to such
Hotel and Property as set forth on Exhibit 3.2 attached hereto, or (2) terminate
this Agreement by giving Sellers written notice thereof, in which event this
Agreement shall automatically terminate upon delivery of Buyer’s notice thereof,
and the parties shall be released from all further obligations under this
Agreement (except for those which expressly survive the termination of this
Agreement), provided that the Deposit shall be paid by Escrow Agent to Buyer. If
the Closing Date is within the aforesaid ten (10) Business Day period, then the
Closing Date shall be extended to the next Business Day following the end of
said ten (10) Business Day period. If under such circumstances Buyer elects to
complete the Transaction or if Buyer is not otherwise entitled to terminate this
Agreement pursuant to this Section 13.2, then this Agreement shall remain in
full force and effect, and, subject to the terms of this Agreement, the purchase
contemplated herein shall be consummated, and at Closing, any right, title, and
interest of the applicable Seller in and to any insurance proceeds resulting
from any casualty or any awards that have been or may thereafter be made for any
taking or condemnation shall be the property of Buyer (other than on account of
business or rental interruption relating to the period prior to Closing), and
the Purchase Price shall be reduced by any amount representing the deductible
amount under the applicable insurance policy and any uninsured portion of the
Casualty. Additionally, Seller shall assign its claim against the insurance
company and the right to negotiate and settle with the insurance company
regarding the claim to Buyer.

ARTICLE XIV

Apportionments

14.1 Apportionments. The following apportionments shall be made between the
parties at the Closing as of 11:59 pm local time at each Hotel on the day
immediately prior to the Closing Date (the “Apportionment Date”):

 

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(a) all non-delinquent real estate taxes, personal property taxes, special
assessments and vault charges, if any, on the basis of the fiscal period for
which assessed, shall be prorated as of the Apportionment Date between each
Seller and Buyer. If any assessments on any Hotel are payable in installments,
then the installment for the current period shall be prorated (with Buyer
assuming the obligation to pay any installments due and payable with respect to
the period after Closing Date and Buyer receiving a credit for any installments
due and payable with respect to the period prior to the Closing Date which have
not been paid in full as of Closing). If the amount of any of the foregoing
taxes not ascertainable on the Closing, the proration shall be based on the most
recent available bill; provided, however, that after the Closing, Sellers and
Buyer shall reprorate in accordance with Section 14.12 hereof;

(b) water and sewer service charges and charges for gas, electricity, telephone
and all other public utilities. Buyer shall be responsible for causing such
utilities and services to be changed to its name and shall be liable for and
shall pay all utility bills for services rendered after the Apportionment Date;

(c) amounts which have been prepaid, accrued or are due and payable under the
Contracts, Equipment Leases and Permits;

(d) all rental payments due for the month in which Closing occurs received by
Sellers from tenants under the Space Leases prior to the Closing Date;

(e) prepaid advertising expenses;

(f) commissions of credit and referral organizations; and

(g) all other charges and fees customarily prorated and adjusted in similar
transactions in the applicable State; provided, however, in no event shall Buyer
be responsible for costs or expenses related to construction, capital
improvement and other similar work performed at the Property prior to the
Closing Date, all of which shall be paid by Seller in full on or prior to the
Closing Date.

14.2 Revenue and Receivables .

(a) Except as otherwise expressly set forth herein, all revenues received or to
be received on account of room rents for the period prior to and including the
Apportionment Date shall belong to Sellers (with Buyer to remit such revenues to
Sellers to the extent any such revenues are paid to Buyer following Closing, and
all such revenues for the period beginning on the day immediately following the
Apportionment Date shall belong to Buyer). The Accounts Receivable of registered
guests at the Hotels who have not checked out and were occupying rooms as of
11:59 p.m. on the Apportionment Date are collectively called the “Guest Ledger”,
and Buyer shall purchase the Guest Ledger for the Hotels from Sellers (less the
actual amounts incurred to cover third party collection costs for such Guest
Ledger charges (such as fees retained by credit card companies, banks or other
similar collection companies, travel agent commissions, and other third party
commissions); provided, however, all room revenues and applicable Taxes for the
night preceding Closing will be divided evenly between each Seller and Buyer.

 

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(b) Revenues from conferences, receptions, meetings, and other functions
occurring in any conference, banquet or meeting rooms in the Hotels, including
usage charges and related taxes, food and beverage sales, valet parking charges,
equipment rentals, and telecommunications charges, but excluding those revenues
addressed in Section 14.3, shall be allocated between Sellers and Buyer, based
on when the function therein commenced, with (i) one-day functions commencing on
or prior to the Apportionment Date but ending prior to 5:00 a.m. on the Closing
Date being allocable to Sellers, (ii) functions commencing after the
Apportionment Date being allocable to Buyer, and (iii) multi-day functions
commencing prior to the Closing Date being allocated between Sellers and Buyer
according to when the event commences and ends, with revenues attributable to
the period prior to the Closing Date allocable to Sellers, and revenues
attributable to the period from and after the Closing Date allocable to Buyer.

(c) All Accounts Receivable relating to the Property in respect of the period
prior to the Apportionment Date (but expressly excluding the Guest Ledger) shall
be for each Seller’s sole account. Buyer shall reasonably cooperate with Sellers
in collecting the Accounts Receivable, at no cost or expense to Buyer. If any
such Accounts Receivable are paid to Buyer after Closing, Buyer shall remit such
payments to Sellers, in the same form as received, within fifteen (15) days
after receipt. Any monies collected by Buyer from any customer after the Closing
Date shall be applied first against the receivables of such customer accruing
first in the month in which the Closing Date occurs, and then in the months
prior to the Closing Date, unless such customer specifically notes that such
payment is to be applied otherwise. The provisions in this Section 14.2 shall
survive Closing.

(d) Buyer shall receive a credit at closing for any outstanding Vouchers that
have been issued but not redeemed as of the Closing Date based on the
operational cost to the Hotels; provided, however, Buyer shall receive a credit
for the full face amount of a Voucher to the extent that Sellers received cash
for the same.

14.3 Food and Beverage Revenue; Vending Machine Revenue. Any and all revenues
earned or derived by Sellers from the operation of the Hotels or the sale of
goods or services to guests, patrons, or occupants of the Hotels on or before
the Apportionment Date, other than revenues described in Section 14.2, but
including, without limitation, revenues from the sale of food, the sale of
alcoholic and non-alcoholic beverages, telephone sales, pay television sales,
valet and parking services, and other similar revenues, together with any sales
tax or other taxes thereon, shall belong to Sellers; provided, however, all
revenues from and expenses associated with any restaurants, bars and lounges at
the Hotels shall be prorated based on the actual closing time for such
restaurant, bar or lounge. Vending machine proceeds shall be counted as close to
the Apportionment Date as is possible and the net amount thereof shall be
credited to Sellers at Closing.

14.4 Guests’ Property. All baggage or other property of patrons of each Hotel
checked or left in care of the applicable Seller shall be listed in an inventory
to be prepared in duplicate and signed by such Seller’s and Buyer’s
representatives on the Closing Date. Buyer shall be responsible from and after
the Closing Date and will indemnify and hold Seller Indemnitees harmless from
and against all claims for all baggage and property listed in such inventory.
Each applicable Seller shall be responsible for, and shall indemnify and hold
harmless the Buyer Indemnitees from and against any Liabilities incurred by any
Buyer Indemnitees with respect to any theft, loss or damage to any inventoried
baggage prior to the Closing Date, and any other baggage, boxes or similar items
left in the care of such Seller which was not inventoried by the parties. The
provisions of this Section 14.4 shall survive Closing.

 

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14.5 Gift Shop Operations. Gift shop operations, if any, shall be adjusted as of
11:59 p.m. on the Apportionment Date. Income received at or prior to the
Apportionment Date shall be for the account of the applicable Seller, and income
received after 11:59 p.m. on the Apportionment Date shall be for the account of
Buyer, with the applicable Seller being credited for the amount of any cash on
hand on the morning of the Closing Date.

14.6 Employee Compensation. Each Seller shall, or shall cause Hotel Manager, as
applicable, to, (i) pay to Hotel Employees on the Closing Date, all wages and
other compensation earned by Hotel Employees relating to the period prior to the
Apportionment Date, and (ii) pay all payroll, employment and other taxes with
respect to all Hotel Employees, and the Buyer shall be responsible for all wages
and other compensation accrued by Rehired Employees and all payroll, employment
and other taxes with respect to all Rehired Employees after the Apportionment
Date; provided, however, with respect to Rehired Employees, Sellers shall not be
obligated to pay to such Rehired Employees vacation and sick time as of the
Apportionment Date, but rather all accrued or earned vacation time, sick pay or
similar benefits for such Rehired Employees shall be credited to Buyer at the
Closing, and Buyer shall be responsible for payment of any amount thereof which
may thereafter be earned and become due to such Rehired Employees.

14.7 Inventories. Sellers shall be responsible for payments of amounts owing to
third parties in respect of Inventories ordered by Sellers in respect of the
Property prior to the Closing Date to the extent such items have been delivered
to the Hotels prior to the Closing Date. To the extent such Inventories are
delivered to the Hotels on or after the Closing Date and were ordered in
ordinary course of business, Buyer shall be responsible for payment of the same.
Sellers acknowledges that, except as provided in this Section 14.7, all
Inventories are part of the Property and included in the Purchase Price such
that Sellers shall not be entitled to any credits for any Inventories, whether
opened or unopened.

14.8 Taxes. Sellers and Buyer acknowledge that, as a result of the Transaction
contemplated in this Agreement, all or some of the Hotels may be subject to
reassessment for purposes of real property taxes, and that any increase in real
property taxes as a result of the sale to Buyer, regardless of whether the
period for such assessments relates to periods before or after Closing, shall be
Buyer’s sole responsibility; provided, however, in the event that, (A) as a
result of the Transaction contemplated in this Agreement, all or some of the
Hotels are reassessed for purposes of real property taxes for any periods
including the tax year in which the Closing occurs or for any tax year prior to
the tax year in which the Closing occurs, and (B) such reassessment causes an
increase in the real estate taxes for such applicable periods, then (I) with
respect to the tax year in which the Closing occurs, such increased taxes shall
be prorated in accordance with Section 14.1(a), and reprorated as provided in
Section 14.12, in each case after taking into account such reassessment and
increase in taxes, and (II) with respect to any tax year prior to the tax year
in which the Closing occurs, all such increased taxes shall be borne entirely by
Sellers. Notwithstanding anything contained in this Article XIV to the contrary,
(i) each Seller shall be entitled to the full amount of any refunds or rebates
resulting from any property tax appeals or requests for reassessments by such
Seller for tax years prior to the tax year in which the Closing

 

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occurs, and (ii) if such Seller has filed a tax appeal or request for
reassessment for the tax year in which the Closing occurs, then such Seller
shall be responsible for processing and settling any such appeals and such
Seller and Buyer shall share the amount of any rebate or refund resulting
therefrom (after first paying to such Seller all reasonable costs and expenses
incurred by such Seller in pursuing such appeal or reassessment) in proportion
to their respective periods of ownership of the applicable Hotel for such tax
year; provided that any settlements with respect to the tax year in which the
Closing occurs or which would impact future tax years shall be subject to
Buyer’s approval, in its reasonable discretion. For purposes of determining the
rebate or refund resulting from any such reassessment relative to the tax year
in which the Closing occurs, all reasonable costs and expenses of such Seller
incurred in connection with the filing or prosecution of such claim shall be
deducted and paid to such Seller before making the allocations set forth in the
preceding sentence. This Section 14.8 shall survive the Closing as well as the
Termination of this Agreement.

14.9 Bookings. Buyer shall receive a credit for all prepaid deposits for
Bookings scheduled to occur on or after the Closing Date, except to the extent
such deposits are transferred to Buyer.

14.10 Adjustments Between Sellers and Operating Tenants. The apportionments set
forth in this ARTICLE XIV are based upon Sellers’ and Operating Tenants’
termination of the Operating Leases at or prior to the Closing in accordance
with Section 2.7, and nothing set forth in this ARTICLE XIV shall affect any
apportionments between Sellers and Operating Tenants under the Operating Lease.
Any such apportionments between Sellers and Operating Tenants shall have no
effect and shall not be binding upon Buyer.

14.11 Accounting. Except as otherwise expressly provided in this Agreement, all
apportionments and adjustments shall be made in accordance with the Uniform
System of Accounts and, to the extent not inconsistent therewith, generally
accepted accounting principles. The computation of the adjustments shall be
jointly prepared by Sellers and Buyer, and reviewed by representatives of both
Buyer and Sellers. To the extent the exact amount of any adjustment item
provided for in this Article XIV cannot be precisely determined on the Closing
Date, the parties shall estimate the amount thereof, for purposes of computing
the net amount due Sellers or Buyer pursuant to this Article XIV and shall
determine the exact amount thereof as soon thereafter as is reasonably
practicable but not later than one hundred twenty (120) days after the Closing
Date (with a 12 month limitation for any reproration of taxes).

14.12 Survival. This Article XIV shall survive the Closing.

ARTICLE XV

Miscellaneous

15.1 Assignment. Buyer shall not assign, transfer or convey its rights or
obligations under this Agreement or with respect to any portion of the Property
without the prior written consent of Sellers, which consent Sellers may withhold
in their sole and absolute discretion; provided, however, Buyer shall have the
right, without obtaining Seller’s consent as aforesaid, to designate one or more
Affiliate as its nominee to receive title to all or a portion of the Property
(Sellers recognize that each Hotel will likely be assigned to a separate Buyer
Affiliate), and/or

 

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assign all of its right, title and interest in this Agreement to any Affiliate
of Buyer by providing written notice to Sellers no later than five (5) Business
Days prior to the Closing; provided, however, that (a) such Affiliate remains an
Affiliate of Buyer until the Closing occurs, (b) Buyer shall not be released
from any of its liabilities and obligations under this Agreement by reason of
such designation or assignment unless and until the Closing occurs, and (c) such
designation or assignment shall not be effective until Buyer has provided
Sellers with a fully executed copy of such designation or assignment and
assumption instrument, which shall (i) provide that Buyer and such designee or
assignee shall be jointly and severally liable for all liabilities and
obligations of Buyer under this Agreement, (ii) provide that Buyer and its
designee or assignee agree to pay any additional transfer tax as a result of
such designation or assignment, and (iii) include a representation and warranty
in favor of Sellers that all representations and warranties made by Buyer in
this Agreement are true and correct with respect to such designee or assignee as
of the date of such designation or assignment, and will be true and correct as
of the Closing. Subject to the foregoing, this Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective permitted
successors, assigns, heirs, and legal representatives.

15.2 Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the Laws of Georgia, without resort to the choice of law rules
thereof.

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

15.4 Notices. Notices and other communications required by this Agreement shall
be in writing and (i) delivered by hand with receipt; (ii) sent by recognized
overnight delivery service; (iii) sent by certified or registered mail, postage
prepaid, with return receipt requested or (iv) by electronic mail during normal
business hours with a confirmation copy delivered by another method permitted
under this Section. All notices shall be addressed as follows:

 

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If to Buyer:    SCG GLOBAL HOLDINGS, L.L.C.    591 West Putnam Avenue   
Greenwich, Connecticut 06830    Attention: Akshay Goyal    Email:
agoyal@starwood.com With a copy to:    c/o Starwood Capital Group Global, L.P.
   591 W. Putnam Avenue    Greenwich, Connecticut 06830    Attention: Eric
Franklin    Email: frankle@starwood.com And to:    Latham & Watkins LLP    330
North Wabash Avenue, Suite 2800    Chicago, Illinois 60611    Attention: Gary E.
Axelrod    Email: gary.axelrod@lw.com If to Seller:    Noble Investment Group   
2000 Monarch Tower    3424 Peachtree Road    Atlanta, GA 30326    Attention:
Mark K. Rafuse    Email: mark.rafuse@nobleinvestment.com With a copy to:   
Morris, Manning & Martin, LLP    3343 Peachtree Road, N.E.    Suite 1600   
Atlanta, Georgia 30326    Attention: Catherine Morgen, Esq.    Email:
cmorgen@mmmlaw.com

or to such other address as may be designated by a proper notice. Notices shall
be deemed to be effective upon receipt or refusal of the addressee to accept
delivery.

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

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

 

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

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

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

15.10 Counterparts; Electronic Signatures. This Agreement may be executed in
separate counterparts, none of which need contain the signatures of all parties,
each of which shall be deemed to be an original, and all of which taken together
constitute one and the same instrument. It shall not be necessary in making
proof of this Agreement to produce or account for more than the number of
counterparts containing the respective signatures of, or on behalf of, all of
the parties hereto. Signatures to this Agreement transmitted by electronic means
shall be valid and effective to bind the party so signing. Each party agrees to
promptly deliver an execution original to this Agreement with its actual
signature to the other party, but a failure to do so shall not affect the
enforceability of this Agreement.

15.11 Brokerage. Buyer and Sellers each represents and warrants to the other
that it has dealt with no broker or agent that is entitled to the payment of a
commission for services rendered in connection with the Transaction other than
the Broker which shall be paid by Sellers pursuant to a separate written
agreement. Each of the parties hereto agrees to indemnify and hold the other
harmless from claims made by any other broker, attorney or finder claiming
through such party for a commission, fee or compensation in connection with this
Agreement or the sale of the Property hereunder. The provisions of this
Section 15.11 shall survive Closing or earlier termination of this Agreement.

15.12 Construction. The parties acknowledge that each party and its counsel have
reviewed and revised this Agreement and that the normal rule of construction to
the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement or any amendment
or modification hereof or any of the closing documents delivered by Buyer or
Sellers hereunder.

15.13 Attorneys’ Fees. If any party hereto fails to materially perform any of
its obligations under this Agreement or if any dispute arises between the
parties hereto concerning the meaning or interpretation of any provision of this
Agreement, then the defaulting party or the party not prevailing in such
dispute, as the case may be, shall pay any and all reasonable costs and expenses
incurred by the other party on account of such default and/or in enforcing or
establishing its rights hereunder, including, without limitation, court costs
and reasonable attorneys’ fees and disbursements. Any such attorneys’ fees and
other expenses incurred by any party in enforcing a judgment in its favor under
this Agreement shall be recoverable separately

 

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from and in addition to any other amount included in such judgment, and such
attorneys’ fees obligation is intended to be severable from the other provisions
of this Agreement and to survive and not be merged into any such judgment. The
provisions of this Section 15.13 shall survive Closing or any termination of
this Agreement.

15.14 Confidentiality and Public Announcements. Except as specifically provided
herein or as required by applicable Laws, no party to this Agreement shall
disclose any of the terms or provisions of this Agreement prior to Closing to
any person or entity not a party to this Agreement, nor shall any party before
or after Closing issue any press releases or make any public statements (print,
broadcast or otherwise) relating to this Agreement or the Transaction, unless
Buyer and Sellers consent to such disclosures in writing. Except as specifically
provided herein or as required by applicable Laws, prior to the Closing, Buyer
shall keep all materials provided or made available to Buyer by Sellers or
Sellers’ agents, and all materials generated by Buyer in the course of
conducting its inspections, review of books and records, and other due diligence
activities relating to the Property (including, without limitation, matters
relating to the environmental condition of the Property), whether obtained
through documents, oral or written communications, or otherwise (collectively,
the “Information”), in the strictest confidence; provided, however, Buyer may
make necessary disclosures to the Buyer’s Representatives as well as potential
lenders, Title Company, Franchisor, investors, potential investors, rating
agencies, partners, attorneys, and consultants required in connection with
Buyer’s evaluation of the Transaction provided that Buyer shall notify each such
party of the confidential nature of the Information and shall use commercially
reasonable efforts to cause any such party to maintain the confidentiality of
such Information or as may be required for any disclosure or filing required by
applicable Laws or to enforce this Agreement. Except as specifically provided
herein or as required by applicable Laws or by any governmental agency, court or
governmental authority, prior to Closing, under no circumstances shall any of
the Information be used for any purpose other than the investigation of the
Property in connection with its purchase by Buyer as contemplated under this
Agreement. This Section 15.14 shall survive the Closing or earlier termination
of this Agreement.

15.15 Time for Performance. If the date for the performance of any obligation,
or the giving of any notice, by Sellers or Buyer hereunder falls upon a day
other than a Business Day, then the time for such performance or the giving of
such notice shall be extended until the next Business Day.

15.16 Further Assurances. Each party agrees to execute and deliver, after the
Closing, such forms of corrective assignments, bills of sale or other
documentation as the other party may reasonably request to carry out the intent
of this Agreement. This Section 15.16 shall survive Closing.

15.17 No Third-Party Beneficiaries. The provisions of this Agreement and of the
documents to be executed and delivered at Closing are and will be for the
benefit of Sellers and Buyer only and are not for the benefit of any third
party, and accordingly, no third party shall have the right to enforce the
provisions of this Agreement or of the documents to be executed and delivered at
Closing.

 

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15.18 Section 1031 Exchanges. Buyer and Sellers agree that, at either Buyer’s or
any Seller’s sole election, this Transaction may be structured as an exchange of
like-kind properties under Section 1031 of the Tax Code, and the regulations and
proposed regulations thereunder. The parties agree that if either wishes to make
such election, it must do so by written notice to the other party at least five
(5) Business Days prior to the Closing Date. If any so elects, the others shall
reasonably cooperate, provided any such exchange is consummated pursuant to an
agreement that is mutually acceptable to Buyer and Sellers and which shall be
executed and delivered on or before the Closing Date. The electing party shall
in all events be responsible for all costs and expenses related to the
Section 1031 exchange and shall fully indemnify, defend and hold the other
harmless from and against any and all Liabilities arising out of, connected with
or in any manner related to such 1031 exchange that would not have been incurred
by the non-electing party if the transaction were a purchase for cash. In no
event shall any party be required to take record title to any property other
than the Property in connection with such transaction.

15.19 Florida-Specific Provisions.

(a) All or part of the Real Property are or may be located either (1) partially
or totally seaward of the Coastal Construction Control Line as defined in
Section 161.053, Florida Statutes (the “CCCL”), or (2) within a coastal building
zone as defined in Section 161.54, Florida Statutes. Therefore, the Real
Property may be subject to coastal erosion and to federal, state or local
regulations that govern coastal property, including the delineation of the CCCL,
rigid coastal protection structures, beach nourishment and the protection of
marine turtles. Additional information can be obtained from the Florida
Department of Environmental Protection, including whether there are significant
erosion conditions associated with the Real Property. Florida law requires
Seller to provide Buyer with an affidavit, or a survey, meeting the requirements
of Chapter 472 of the Florida Statutes, delineating the location of the CCCL on
the Real Property at or prior to Closing, unless Buyer waives this requirement
in writing. Buyer hereby waives the right to receive a CCCL affidavit or survey.

(b) Pursuant to Section 404.056(5), Florida Statutes (2016), the following
notification regarding radon gas is hereby made, and all parties executing this
Agreement acknowledge receipt of this notification:

Radon Gas: “Radon is a naturally occurring radioactive gas that, when it has
accumulated in a building in sufficient quantities, may present health risks to
persons who are exposed to it over time. Levels of radon that exceed federal and
state guidelines have been found in buildings in Florida. Additional information
regarding radon and radon testing may be obtained from your county health
department”.

15.20 Audit Rights. Buyer has advised Sellers that Buyer (or any direct or
indirect owner of Buyer or affiliate thereof) may be required to file, in
compliance with certain laws and regulations (including, without limitation,
Regulation S-X of the Securities and Exchange Commission (the “SEC”)), audited
financial statements, pro forma financial statements and other

 

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financial information related to the Property for up to three (3) fiscal years
prior to Closing and any interim period during the fiscal year in which the
Closing occurs (financial statements for any such interim period being
unaudited) (the “Financial Information”). Following the Closing, Sellers shall
use commercially reasonable efforts to cooperate with Buyer and its
representatives and agents in preparing the Financial Information within fifty
(50) days from the Closing Date. Without limiting the generality of the
foregoing, if requested by Buyer, Sellers shall (i) maintain and allow Buyer
(upon no less than one (1) Business Days’ prior written notice, which notice may
be given via email), reasonable access to, during normal business hours, such
books and records of Sellers reasonably related to the Property (provided
Sellers shall have the right to redact information relating to assets and
liabilities of Sellers other than the Property), (ii) make Mark K. Rafuse
available for interview by Buyer, (iii) deliver a customary representation
letter (the “ Audit Inquiry Letter”) in such form as is reasonably required by
the Buyer’s outside third-party accountants (the “Accountants”), with such facts
and assumptions as reasonably determined by the Accountants in order to make
such certificate accurate, signed by the individual(s) responsible for the
Sellers’ financial reporting, as prescribed by generally accepted auditing
standards promulgated by the Public Company Accounting Oversight Board, which
representation letter may be required to assist the Accountants in rendering an
opinion on such financial statements, provided in no event shall Sellers incur
any liability in connection with such representation letter and same will be
made expressly subject to the terms and limitations set forth below in this
Section 15.20, and (iv) to the extent that the Sellers’ financial statements for
any Individual Property have previously been audited, the Sellers shall use
commercially reasonable efforts to cause the auditor of the Sellers’ financial
statements to provide its consent to the inclusion of its report, without
exception or qualification, with respect to such audited financial statements,
and to provide to the Buyer and/or their Affiliates or the underwriters or
initial Buyer s in any financing with appropriate comfort letters in accordance
with the American Institute of Public Accountants’ professional standards.
Notwithstanding the foregoing, Sellers shall not be required to provide any
information concerning (a) Sellers’ confidential financial analyses or
projections, prepared solely for Sellers’ internal purposes on a fund level
basis or otherwise not directly related to the operation of the Property, or
(b) financial statements of any Affiliate of Sellers (other than Property-level
financial statements). Further, Buyer hereby acknowledges and agrees that
(1) Buyer shall be solely liable to pay and shall reimburse Sellers, within five
(5) business days following Sellers’ written request, for all reasonable costs
and expenses incurred by Sellers in assisting Buyer under this Section 15.20
(such assistance, the “Audit Assistance”), including all out-of-pocket costs
actually incurred to review, research and complete the Audit Inquiry Letter; and
(2) Sellers’ performance of any Audit Assistance shall be solely as an
accommodation to Buyer and Sellers shall have no, and Sellers are hereby fully
released and discharged from, any and all liability or obligation with respect
to the Audit Assistance, any filings (the “SEC Filings”) made by Buyer with the
SEC and the Audit Inquiry Letter; provided, that the forgoing release shall not
apply to Seller’s breach of any of the covenants, representations and warranties
of Sellers set forth in in this Agreement to the extent the same expressly
survives the Closing. Buyer’s right to request any Audit Assistance shall expire
one year after the Closing Date. The provisions of this Section 15.20 shall
survive the Closing.

[SIGNATURE PAGE FOLLOWS]

 

 

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IN WITNESS WHEREOF, Sellers and Buyer have caused this Hotel Purchase and Sale
Agreement to be executed as of the Effective Date indicated above.

 

SELLERS: NF II/CI TAMPA AIRPORT, LLC, a Delaware limited liability company

NF II/CI FORT MEYERS GULF CENTER, LLC, a

Delaware limited liability company

NF II/CI LITTLE ROCK, LLC, a Delaware limited liability company

NF II BEACHWOOD PARK EAST OP CO, LLC, a

Delaware limited liability company

HP BOULDER L.L.C., a Delaware limited liability company NF II/CI TAMPA AVION,
LLC, a Delaware limited liability company NF II/CI KNOXVILLE, LLC, a Delaware
limited liability company

NF II/CI FORT MYERS AIRPORT, LLC, a

Delaware limited liability company

 

By:  

/s/ Mark K. Rafuse

Name: Mark K. Rafuse Title: Vice President

[Signature Page to Hotel Purchase and Sale Agreement – Portfolio B]

--------------------------------------------------------------------------------

BUYER: SCG GLOBAL HOLDINGS, L.L.C., a Delaware limited liability company

By:  

/s/ Akshay Goyal

Name: Akshay Goyal Title: Authorized Signatory

[Signature Page to Hotel Purchase and Sale Agreement – Portfolio B]

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JOINDER

The undersigned (“Joinder Party”) hereby joins in this Agreement for the
purposes of guarantying the obligations of the Sellers hereunder, but only to
the extent that (a) the Closing occurs, and (b) any Seller expressly has
liability to Buyer under this Agreement after Closing (and subject in all events
to the limitations set forth in Article XII of the Agreement). From and after
the Closing during the Survival Period (and during the pendency of any claim
made by Buyer prior to the expiration of the Survival Period), the obligations
of Joinder Party and Sellers under this Agreement shall be joint and several.

Joinder Party further agrees as follows:

 

  1.

Joinder Party hereby: (a) acknowledges that Buyer would not enter into this
Agreement with Sellers but for this joinder; (b) acknowledges that Joinder Party
has reviewed all of the terms and provisions of this Agreement; (c) acknowledges
that there are no conditions precedent to the effectiveness of this joinder, and
(d) represents and warrants to Buyer that Joinder Party is not and will not be,
as a consequence of the execution and delivery of this joinder, impaired or
rendered “insolvent”, as that term is defined in Section 101 of the U.S.
Bankruptcy Code, or otherwise rendered unable to pay Joinder Party’s debts as
the same mature and will not have thereby undertaken liabilities in excess of
the present fair value of Joinder Party’s assets.

 

  2.

The obligations of Joinder Party under this joinder are independent of the
obligations of Sellers under this Agreement and, in the event of any default or
any breach of a representation, warranty or covenant under this joinder, a
separate action or actions may be brought and prosecuted against Joinder Party
whether or not any Seller is joined therein or a separate action or actions are
brought against any Seller.

 

  3.

Joinder Party hereby (a) waives diligence, presentment, demand, protest, or
notice of any kind whatsoever, any defense based on suretyship principles, as
well as any requirement that Buyer exhaust any right or take any action against
any Seller or any other person or entity; and (b) consents to any supplement,
amendment or other modification made to this Agreement in accordance with its
terms without Joinder Party’s consent or approval. Without limiting the
generality of the foregoing or any other provision hereof, Joinder Party further
expressly waives to the extent permitted by Law any and all rights and defenses,
including, without limitation, any rights of subrogation, reimbursement,
indemnification and contribution, which might otherwise be available to Joinder
Party under any applicable Laws; provided, however, nothing in this paragraph
shall negate the availability to Joinder Party of (i) the defense of payment or
performance of the obligations being guaranteed hereunder, and (ii) any separate
claim any Seller may have against Buyer based upon Buyer’s failure to satisfy
its obligations pursuant to this Agreement (but which separate claim shall not
be the subject of an offset by Joinder Party).

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  4.

This joinder is irrevocable, cannot be revoked by Joinder Party. This joinder is
independent of the obligations of Sellers under this Agreement. Buyer may bring
a separate action to enforce the provisions hereof against Joinder Party without
taking action against any Seller or any other party or joining any Seller or any
other party as a party to such action. This joinder is not secured and shall not
be deemed to be secured by any security instrument.

 

  5.

The Joinder Party agrees to maintain an aggregate net worth and liquid assets
(cash or cash equivalent) of at least two percent (2%) of the Purchase Price for
the Survival Period (and after the Survival Period, during the pendency of any
claim made by Buyer prior to the expiration of the Survival Period, not less
than 150% of the value of the outstanding claim(s)).

 

2

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In witness whereof, the undersigned has executed this Joinder as of July 31,
2018.

 

NOBLE HOSPITALITY FUND II, L.P.,

a Delaware limited partnership

By:   NOBLE HOSPITALITY FUND II GP, LLC, a Delaware limited liability company,
its general partner By:  

/s/ Mark K. Rafuse

Name: Mark K. Rafuse

Title: Vice President

[Signature Page to Joinder for Hotel Purchase and Sale Agreement – Portfolio B]

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JOINDER BY OPERATING TENANTS

The undersigned Operating Tenants hereby join in the execution of this Agreement
for the purpose of acknowledging and agreeing to Section 2.7 and Article VII of
the Agreement. In addition, Operating Tenants agree to execute and deliver,
after the Closing, such forms of corrective assignments, bills of sale or other
documentation as Buyer may reasonably request to carry out the intent of the
Agreement.

 

OPERATING TENANTS:

NF II/CI TAMPA AIRPORT OP CO, LLC, a

Delaware limited liability company

NF II/CI FORT MEYERS GULF CENTER OP

CO, LLC, a Delaware limited liability company

NF II/CI LITTLE ROCK OP CO, LLC, a

Delaware limited liability company

NF II BEACHWOOD PARK EAST OP CO, LLC,

a Delaware limited liability company

NF II BOULDER OP CO, LLC, a Delaware limited liability company

NF II/CI TAMPA AVION OP CO, LLC, a

Delaware limited liability company

NF II/CI KNOXVILLE OP CO, LLC, a Delaware limited liability company

NF II/CI FORT MYERS AIRPORT OP CO, LLC,

a Delaware limited liability company

 

By:  

/s/ Mark K. Rafuse

Name: Mark K. Rafuse Title: Vice President

[Signature Page to Joinder for Hotel Purchase and Sale Agreement – Portfolio B]